am I making sense with the investments

justme111

A disclaimer - I am not sure I know what I am doing.
About 3 years ago I started drip feeding ISA at fidelity via cavendish £250 a month split into 5 funds - hsbs american tracker , hsbc pacific tracker , hsbc japan tracker , hsbc ftse all share tracker and aberdeen emerging market one .
In ftse , pacific and japan I have now more or less the amount I placed there with little to no growth , american gauned in value and in aberdeen one I have about 20% less than I deposited.
The purpose of investment is to get retirement income (it will not be the only source if income).
Am I doing anything wrong or is it the way it is supposed to be ?

Al.

The more excitable and risky the markets that you're investing into, the more wild the swings will be.

It seems to be the default to invest 'riskily' when young and throttle back at retirement. Although the evidence is increasingly there to suggest that's not always the pre programmed sequence you should be thinking of, I'm guessing that you wanted to capitalise from big growth when you started? Well, this is the downside! Markets are depressed all across the board, as near as damnit, so if you're happy with it, ride it out.

If the episode leaves you feeling worried, consider low risk investment and asset classes. The issue is, are the funds, within the sectors, still good for your needs, wishes, feelings and timescale? If they are, if you're still the same sort of client who can ride it out, grit your teeth and forge ahead. If not, consider a realignment or derision get of where you'd like to be. Trade off the extra growth you might make with riskier investments, with the sleep you might be losing!

I find the best performance, having taken into account the risk premium of spicier funds which try to shoot the lights out, can't be justified. In my humble experience, the most effective return for your money, taking into risk, seems to be marginally either right of centre, or just left of it. Over twenty years though, no contest. The same evidence seems to be pointing at rethinking retirement investing too - which is the really interesting, unfolding picture.

justme111

Not worried at all that no gain/loss present , just checking whether I am doing it right.
You say -" if those funds were good for your objectives a few years ago they still good now "- that's the point, I have no clue whether they were/ are good for my objectives. My objective is simple - with contributions of £250 a month (mat be more a few years later ) to get a sum that would give me some income in 20 years time in retirement . So that is what I am asking - is it suitable for my aim or not ?

Al.

Try reverse engineering. Allowing for inflation, what would you need as a retirement income (pension) if retiring today.. in other word, just what is your aim? Then, predict what you'll get from what you're currently doing and then, are you in surplus or deficit in relation to your aim. And would using the pension wrapper (with tax relief) help?

justme111

Ah , that's the million dollar question -" predict what you would be getting ". I factored in 5% increase above inflation with investments. If it does not happen - tough luck as I do not have other options of where to put the money anyway. Or better saying other options are either being used already (occupational pension scheme) or I am planning to use them in a few years time (btl). Pear to pear investments considered from next year. What are the options I have not considered yet ?
I do not want to do it in pension wrapper as I would have preferred to have access to it and don't fancy paying tax on drawing it.
Just have read the thread "how panicky have you got ?"- I guess it does reply my question - it is happening across the board and my particular selection is no better or worse than others

bigadaj

I think al meant what might you need to live on in retirement, then work out what you might be getting in state pension, work pension, investments, property etc when you can decide a sum to target.

There's nothing wrong with what you are doing, though my assumption from your post us a that you are putting equal amounts into the funds, which wouldn't chime with many peoples typical portfolio make up, so look at your asset allocation, you can set up portfolios on trustnet or Morningstar.

The other way of doing this, well one of them , would be to use a multi asset fund, such as vanguard life strategy, black rock consensus, l&g multi etc to form the core part of your portfolio. These funds also auto rebalance which takes away some of the hassle. Once started on this route you can then add additional funds either to tweak the region or type of investments, or add in areas that are missing, so this could be more emerging markets, smaller companies, property or even commodities.

No guarantees or better way of doing things just an alternative approach.

eskbanker

justme111 wrote: »

Pear to pear investments considered from next year

Buying an orchard perhaps? Let's hope it doesn't all go peer-shaped....

Al.

Core blimey!

justme111

Cider to beer I meant!

BLB53

A disclaimer - I am not sure I know what I am doing.

Not being sure you know what you are doing is risky.

Low cost globally diversified index trackers are a good start - are you all equities, in which case be prepared for a bumpy ride as these are the most volatile assets.

Equity markets can, and do, fall 20% or 30% at times which can be a bit scary and investors bail out. A big part of getting a good outcome is being able to stay the course for the longer term. This may mean adjusting your asset mix to take on less volatile bonds, possibly property.

Personally, I like the Vanguard Lifestrategy range which combine global equities and bonds all in one simple package - makes everything a lot easier for the diy investor!

If you have not read the book, I can recommend Tim Hale 'Smarter Investing' - review this week on diy investor http://www.diyinvestoruk.blogspot.co.uk/2015/09/smarter-investing-review.html

Also, many good articles on asset allocation etc. on https://www.monevator.com

Good luck!

justme111

I have read the books and articles, thank you.
Can you please point out the benefits of adding bonds for me ? I do not plan to need that money for years and less volatile part of my assets consists of cash.