active vs passive?

Thrugelmir

TheTracker wrote: »

That may well be true. I'll sit at the head of the peloton, herd if you prefer.

Hard work at the front of the peleton. Easier to sit in the pack and bide ones time.

TheTracker

Yes that's a better analogy. These is a Goldilocks zone between the innovators and the laggers. But glad that there are innovators. I just can't pick which one is imminently successful. Good luck and best wishes to those who can.

Ryan_Futuristics

Well thanks to Vanguard's recent marketing drive, it's a lot easier to find amateur investor blogs touting Malkiel like smug teenagers returning to their C-of-E schools having just discovered Nietzsche

Simple ideas can be seductive, but if you want to get anywhere with investing, you've got to respect the numbers

Kendall80

Ryan_Futuristics wrote: »

Simple ideas can be seductive, but if you want to get anywhere with investing, you've got to respect the numbers

... and not be forced into choosing one side or the other in what is being set up as an either/or scenario.


Actives and passives can compliment each other in a portfolio.

Ryan_Futuristics

Kendall80 wrote: »

... and not be forced into choosing one side or the other in what is being set up as an either/or scenario.


Actives and passives can compliment each other in a portfolio.

Absolutely - it's what I mean Re: the religiosity that's sprung up with the revival of this debate

I'm fairly management agnostic ... Even with good funds, we're only talking on average 2-3% outperformance ... I'm more interested in whether I can find a fund that fits my investment strategy, and that ensures I'm buying cheaply (because that is your only consistent measure of returns)


Good article here:

Active vs Passive is the Wrong Question

Rather than pit active funds against passive funds, investors should distinguish between funds that deserve a place in their portfolio and those that do not

http://www.morningstar.co.uk/uk/news/128343/active-vs-passive-is-the-wrong-question.aspx

Jaguar_Skills

Guys Th ks for all your excellent responses, I will reply when my tablet isn't on meltdown from the sun that's currently burning 42 degrees!

KNJ_2

Thrugelmir wrote: »

Hard work at the front of the peleton. Easier to sit in the pack and bide ones time.

Nice analogy, bear in mind that the winner of "Le Tour" is fully supported by "domestiques" and on winning give the entire money to them, retaining nothing, say a great reputation and future wealth

Rollinghome

Ryan_Futuristics wrote: »

Things change ... My question would be: when you find a top investment trust (a complete portfolio) that's doubled market returns for decades, with very low volatility, and a team of researchers steering it on track, why deviate from that?

If you can find such an IT then it's likely to be on a huge [STRIKE]discount[/STRIKE] premium, and one possible reason to at least consider "deviating" is to contemplate what would happen to that [STRIKE]discount[/STRIKE] premium should the market conditions that benefited any particular trust change. I've been investing in ITs for around 40 years and can't remember a time when discounts have narrowed so far across the board. That's largely the result of an unprecedented bull-run coinciding with the ending of commission on unit trusts to IFAs following RDR - and therefore unlikely to be repeated. Looking back, there have been many investments that appeared to be the obvious choice for widows and maiden aunts to hold forever that didn't turn out that way.

For someone like yourself who has only only been investing for the last year or so during a bull-run that might need the kind on melt-down we saw in 2008/9 to be repeated, investing may appear to be simpler than it really is and certainties more certain than they actually are.

bowlhead99

Rollinghome wrote: »

If you can find such an IT then it's likely to be on a huge discount, and one possible reason to at least consider "deviating" is to contemplate what would happen to that discount should the market conditions that benefited any particular trust change

To avoid confusion, you mean "...it's likely to be on a huge premium, and one possible reason to at least consider "deviating" is to contemplate what would happen to that premium should the market conditions that benefited any particular trust change"

Ryan_Futuristics

It's a fair point ... Murray International (a core holding of mine) is currently on a 5-6% premium

While I don't like buying at a premium, it's one of the few exceptions I make, and as a long-term defensive holding, any realistic change in premium/discount is likely to be absorbed (it would probably be paying a 5-6% dividend, after all, if it lost the kind of capital to make investors flee en masse)

Also I value funds as if they're individual shares - premium/discount is only a small contributor to what I consider to be the underlying value of a fund ... On PEG ratio, I buy funds that I consider are likely at 30-130% discounts (as a high income fund, Murray's obviously not one of them)