Investing for income?

Mistermeaner

Aged: my advice would be to be to read lots of threads on here, read monevator and read lots of other stuff (newspapers etc) until you feel comfortable with making informed decisions. If you dont feel comfortable seek independent financial advice.

I am new to this investing game and am learning, this site is just part of that learning for me - some excellent direct advice and info on here and also some passionate debate that tends to deviate from the original question and always lead to same blind alleys. I find this both enjoyable and in its own way informative as reading and attempting to follow contrarian positions is useful in itself. Time will tell who is 'right' but doesn't really help you for now.

I am young and earning so have time to make mistakes and learn and recover from them - I'm presuming your lump sum is to see you through so you can't afford any glitches.

If you want my 2 pennies I think the previous advice about splitting your pot into sub-pots , each with a different time frame and therefore risk and liquidity attached is the most sensible. Quite how to divide it up and what vehicles to put each pot into is the tricky bit and possibly where in your circumstance professional advice may be best

Ryan_Futuristics

TheTracker wrote: »

But you said this 6 weeks ago...



Has your opinion changed in the last few weeks, or do you have different thoughts on what might be safe for your money versus safe for the OPs £300,000?

Then, after the OP asked for options ...



You said

Glad you pointed this out ... A bond ladder is the safest bet ... Warren Buffett has his fixed income (everything that's not in his equities fund) in a bond ladder, as do the vast majority of wealthy investors

When I make statements like this, it's me attempting to speak in the 'objective' voice ... And you can tell because I don't prefix sentences with "personally" or "in my opinion"

An opinion is a subjective statement, which I might use to provide a counterpoint ... In this case, I'm not buying bonds because I feel the risk/reward doesn't fit my investment criteria - but this is much more of a judgement call (based on numbers we don't have) and financial advisors would probably disagree with me ... Important not to get the two muddled up


Re: Woodford

I'm a contrarian - I prefer value, volatility, emerging markets ... It took a lot for me to be swung round to Woodford ... As far as I can speak objectively, Woodford is the best way to invest in the UK ... Every box it ticks puts it in a category more likely to outperform and protect capital ... Chaos can always throw a curve ball, but I know enough to know that the FTSE All Share's allocation to banks and energy firms makes it a higher risk proposition, and its cap-weighting doesn't bode well for sustainable growth

colsten

Ryan_Futuristics wrote: »

As far as I can speak objectively, Woodford is the best way to invest in the UK

Leaving aside whether it is or isn't, surely nobody would recommend, let alone advise, a low risk investor should pile their entire £300K into a fund that is 80%+ UK and has less than 5% allocated to the world's largest economy. This is anything but a low risk approach to investing (and I believe not one that you are taking yourself).

Singling out the Woodford fund poses a lot of question marks over your motives and/or skills when a much more appropriate portfolio for a low-risk investor would consist of a number of funds and bonds as well as cash.

Ryan_Futuristics

colsten wrote: »

Leaving aside whether it is or isn't, surely nobody would recommend, let alone advise, a low risk investor should pile their entire £300K into a fund that is 80%+ UK and has less than 5% allocated to the world's largest economy. This is anything but a low risk approach to investing (and I believe not one that you are taking yourself).

Singling out the Woodford fund poses a lot of question marks over your motives and/or skills when a much more appropriate portfolio for a low-risk investor would consist of a number of funds and bonds as well as cash.

Certainly not all!

On the need to be invested in the US and bond funds (both in bubble territory with poor yields and significant risk to capital) I'd say 5% was about right ... But reliable income (and even preserving capital) may prove tricky in today's economy ...

Years of QE have inflated global equity valuations and property prices, and any rise in inflation (and subsequent rise in rates) threatens significant loss to bond capital ... US hedge fund managers are embracing P2P lending right now ... I fear over here we're being a little more selective with our hearing

richyg

colsten wrote: »

Singling out the Woodford fund poses a lot of question marks over your motives and/or skills when a much more appropriate portfolio for a low-risk investor would consist of a number of funds and bonds as well as cash.

I was reading this thread last night and got halfway through a post questioning the motives and any possible bias / alternative agenda involved both here and also in other posts before putting it down to too much beer. Again I am not so sure. Elegant posting, very knowledgable and always singing the praises of Woodford Equity Income ?

Ryan_Futuristics

richyg wrote: »

I was reading this thread last night and got halfway through a post questioning the motives and any possible bias / alternative agenda involved both here and also in other posts before putting it down to too much beer. Again I am not so sure. Elegant posting, very knowledgable and always singing the praises of Woodford Equity Income ?

Better to ask me directly - you don't want to come across like a pair of gossiping old ladies

The fund's got £3.7bn invested in it ... How much am I going to increase that figure recommending it to a handful of weekend savers?

If it wasn't for me, the only fund anyone would be recommending around here would be Vanguard Lifestrategy (which could very well prove to be an extremely competitively priced toilet to flush money down)

Eco_Miser

Aged wrote: »

I beg your pardon?

There's a 'discussion' ongoing across multiple threads, which has now landed in yours.

Please realise most of it has nothing to do with your question, and do your own research or check with an IFA before acting on any investment suggestions on the internet.

colsten

Ryan_Futuristics wrote: »

Better to ask me directly - you don't want to come across like a pair of gossiping old ladies

The fund's got £3.7bn invested in it ... How much am I going to increase that figure recommending it to a handful of weekend savers?

If it wasn't for me, the only fund anyone would be recommending around here would be Vanguard Lifestrategy (which could very well prove to be an extremely competitively priced toilet to flush money down)

LOL. So you object to people repeatedly mentioning a single fund by promoting....another single fund. Highly logical (not), even without going into the fundamental differences between the two funds in question ( that you are well aware of but many of the MSE readers are not, and it is unfair, bordering on misleading, to suggest these two funds can be compared like for like). And particularly illogical as you have, I think, previously mentioned that you only have a small part of your own investment in what you keep promoting as the best fund. Though you don't say this every time you pluck for your pet fund.

Can you not just tone your Woodford promotion down a few levels.

Ryan_Futuristics

colsten wrote: »

LOL. So you object to people repeatedly mentioning a single fund by promoting....another single fund. Highly logical (not), even without going into the fundamental differences between the two funds in question ( that you are well aware of but many of the MSE readers are not, and it is unfair, bordering on misleading, to suggest these two funds can be compared like for like). And particularly illogical as you have, I think, previously mentioned that you only have a small part of your own investment in what you keep promoting as the best fund. Though you don't say this every time you pluck for your pet fund.

Can you not just tone your Woodford promotion down a few levels.

Rather than "The Woodford Fund", I'll just say "a defensively positioned UK equity income fund with an outstanding manager track record", and let them do the homework

But rather than saying Vanguard Lifestrategy, everyone else has to say "an Armitage Shanks Easyflush"

I jest ... But I actually don't think they're drastically different funds ... Fixed income aside, much of Woodford's portfolio is large international corporations doing most of their business in the US, Europe and Emerging Markets ... The difference is you pay twice as much for the luxury of these businesses if they're located in the US

richyg

I do like the idea of equity income but it seems to me that most of the money ends up coming too late to the party - and there is historic precedence for this.

Us defensive , well known names seem very expensive, and household fund managers seems to eventually revert to the mean or fade away.

Bill Miller at Legg Mason - outperform for 15 years - then lose it to underperfromane .

Anthony Bolton - outperfrom for years and then China Special Situations.

Remember Jayesh Manek - Winner of the Sunday Times fantasy Fund manager of the year 2 years in a row - wow - how could that be. Well look at the pitiful peformance of his fund now.

Terry Smith - fundsmith up 100% in less than 3 years (again defensive equity income I guess) - currently on a roll and along with Woodford attracting 50% of new UK money and now at £3 billion.


I just wonder whether these conviction fund managers attract most money just at the point when they revert to mean performance by either running out of luck or the sector that gave the perfomance then under performing itself.

I will stick with my lifestrategy fund - it seems logical to me. And if it turns out to be Armitage Shanks - well at least it wont be an individual fund managers selection of 20 companies that does it but rather the wider worldwide economies underperformance.

YMMV.

R.