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Woodford to leave Invesco
Comments
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gadgetmind wrote: »The experts make money from investors without taking any risk themselves. I wouldn't call this getting it wrong, at least not from their POV.
So the conclusion must be that they are corrupt if they believe that index funds are really better than their efforts or stupid if they dont. Like I said a theory that the experts are all corrupt or stupid. Such ideas go down well with the internet conspiracy theorists.
gadgetmind wrote: »If Mr Hale didn't reference, at some length, all of the research showing the advantages of long-term drip-feeding into a rebalanced portfolio of (as much as possible) uncorrelated asset classes, and ensuring that fees are kept low to prevent their drag on returns, then you'd have a point.
I am referring to equity sectors not totally different asset classes. Mr Hale believes the FTSE AllShare is a broad index ideally suited to the UK investor. The figures I have found (trustnet is down) from 2011 show extractive industry as 30%, industrials at 7.5%, and technology at 1.75%. Is the FTSE AllShare a good broad index? Does it represent the UK?
gadgetmind wrote: »As a scientist, I like coherent theories based on a large body of backing evidence.
As a physical scientist you believe in simple all embracing theories that can be backed by clear evidence independent of time, place, or who is conducting the experiments. Theories which can be applied to give predictable results. Same as me.
But I believe that social science isnt like that. There are no true simple all embracing theories. The evidence is dependent on who, when and where and must be carefully assessed. And when you get your theory its successful and useful application is problematic.
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redbuzzard wrote: »And yet...
Compare an investment 5 years ago in IPI with IUKD.
IPI total return is now 103% vs 118% from IUKD. And that is comparing with an outstanding fund. Hardly a damning indictment.
IPI is of course less volatile.
Try 6 or 7 years. IPI dropped by around 45% in the credit crunch, IUKD dropped by 66%, OK say 60% allowing for dividends.
IUKD does well in calm rising markets which the last 5 years have largely been. IPI with its human guidance can handle the bad times much better.0 -
So the conclusion must be that they are corrupt if they believe that index funds are really better than their efforts or stupid if they dont.
I have no way of knowing what they believe or don't believe only what they do and don't deliver. That they personally do very well is beyond question, but what value they deliver to their investors is on far less solid ground.Is the FTSE AllShare a good broad index? Does it represent the UK?
Does it matter? The reasons for home bias (often psychological ones) are explained as are the alternatives. Personally, I use far more of a global approach because I don't tend exhibit the same emotional responses as other people, if indeed I exhibit them at all.But I believe that social science isnt like that. There are no true simple all embracing theories.
I don't regard investing as a social science as it's capable of being understood using mathematics, or at least it is if done correctly.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
redbuzzard wrote: »IPI total return is now 103% vs 118% from IUKD
If I could only choose between IPI and IUKD, then I really don't know which way I'd go. Both use approaches that are flawed, one because of high fees and its reliance on IMH being bogus, and one because it uses a mechanical strategy that suffers from both a lack of diversity and concentrating this onto shares with high yields while ignoring everything else.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
gadgetmind wrote: »I don't regard investing as a social science as it's capable of being understood using mathematics, or at least it is if done correctly.
Analysed mathematically after the event - certainly. Does the maths provide understanding? Well I would have thought that understanding can best be demonstrated by the ability to predict. Do you think it passes that test?0 -
Analysed mathematically after the event - certainly. Does the maths provide understanding?
Yes, why would you think otherwise?Well I would have thought that understanding can best be demonstrated by the ability to predict. Do you think it passes that test?
Yes, but these are stochastic "predictions" as I'm sure you understand.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
gadgetmind wrote: »If I could only choose between IPI and IUKD, then I really don't know which way I'd go. Both use approaches that are flawed, one because of high fees and its reliance on IMH being bogus, and one because it uses a mechanical strategy that suffers from both a lack of diversity and concentrating this onto shares with high yields while ignoring everything else.
Yup, that in a nutshell is what we are presented with when choosing funds. There is no perfect one, and if there were we wouldnt know it until after the event. So you either shrug your shoulders and buy the cheapest or you take a deeper look and see which best matches your objectives for that fund as a part of your overall portfolio.0 -
gadgetmind wrote: »
I don't regard investing as a social science as it's capable of being understood using mathematics, or at least it is if done correctly.
I tend to agree that it should be a mathematical process. There is no accounting for sentiment, Deep Water Horizon events, Libor/market manipulation or alleged bribery though."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
So you either shrug your shoulders and buy the cheapest or you take a deeper look and see which best matches your objectives for that fund as a part of your overall portfolio.
Whilst compounding is acknowledged over the longer team does a relatively small cost differential make that much difference if the return is good. Between evenly placed or poorly performing funds I can see it being a bigger concern."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
When I considered the cheap tracker section of my portfolio I thought IUKD was a good solution for income but I looked deeper than that and chose MIDD.
The reasons (possibly rubbish in the eyes of the experienced ones here)
1. It covers a very broad range of equities and includes investment trusts that offer diversity in other markets. It is quite heavily weighted in financials at 36.5% but in that Investment Trusts are called financials.
2. It pays a modest dividend which one can draw an income from or reinvest.
I think it offers a fair diversity.
My own view on the FTSE 100 is it covers a a multitude of sectors within a narrow index. For exposure to the FTSE100 I would choose managed Equity Income because I do not want exposure to the entire FTSE100 index. My choice for this ideally would be EDIN because MIDD is very lightweight on Healthcare, telecoms and consumer goods.
For USA Exposure I have chosen VUSA a Vanguard tracker that tracks the S&P 500.0
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