Anyone else making a loss on all their S&S investments?

Linton

EdGasket wrote: »

Well I've got about 90 holdings in the pension; would be boring to list them all but about half by value are individual shares and the other funds. The shares are the sectors I already mentioned and the funds are gold mining, many far-eastern focused ones (was supposed to be a growth area), Europe and World.

The problem is I have been in the wrong areas at the wrong time. e.g. I had a lot of oilies when the chancellor sprung the extra tax on the N. Sea a few years back. I have gold on the back of QE but its just carried on falling. Resources and oil because we keep being told the US and UK are out of recession but resources are way, way down, I have supermarkets as a 'safe' bet; well they aren't any more. I had a lot of asia focused funds that have gone Pete Tong since China's slowdown. I have commercial property shares that are doing OK but not making up for losses elsewhere.

After a number of individual shares went bust (some recommended by the Investor's Chronicle) I started moving away from individual shares and into funds but they have done even worse; all are down apart from a Vanguard global income fund and that only because I bought it recently when it was 'cheap'.

So do I sell all my heavily loss-making funds and shares, take a big hit and try something else (even just stick whats left back in the bank) or just let it ride and see if it recovers? Looks like its all going down more on Monday due to terror attacks in Paris.

From what you say, I see three major mistakes:

1) Trying to pick individual sectors/funds/shares.

You tell us you have various sectors for specific reasons, I think this is a mistake. You should in my view be invested in almost everything, almost everywhere. It is the % allocations which you can play with. No-one knows the future, trying to pick tomorrows winners has a very good chance of failing. I was bemused by you saying "many far eastern funds". Why not just 1, or possibly 2? Say a general Far East exc Japan and perhaps a Smaller Companies Far East. Ok add another one or to to cover Japan. And that's the Far East done.

I suggest you put a higher % in funds - it makes sector coverage much easier. The only reason I see for holding individual shares is for dividends in a specialist high yield portfolio. For the general investor funds are the way to go.

Dont act on "tips". The tipsters dont know.

2) Trying to time the mearket

"The problem is I have been in the wrong areas at the wrong time. "

That's not a problem, that's life. Dont bother about it. By trying to hold almost everything always things will balance out. Eventually the long term trends will win.

3) Investing beyond your risk acceptance

Here you are worrying about what the markets will do following the French attacks. From an investment point of view it shouldnt matter to you. You are concerned because Far East fnds have fallen a bir. Do you believe the Far East is going away for good? Seems a little unlikely so presumably it will recover at some time.

Just shrug your shoulders and accept markets will go up and down over time, though on balance up. If you cant do this you need to de-risk your portfolio by investing a significant part in cash, bonds, possibly absolute return funds so that your % falls and rises are much reduced.

What to do now.

The most important thing is to diversify and ensure that you have every major sector covered. The easiest way to do that is to buy a multi-asset fund, perhaps steadily selling off your existing holdings starting from the smallest. You can get data on sector allocation of individual funds from Trustnet.

If you want to continue with some focussed holdings that's fine. But each should be a small % of your portfolio, say 5% or so.

EdGasket

Ref. "You tell us you have various sectors for specific reasons, I think this is a mistake." So would you consider avoiding bonds because interest rates are likely to go up also a mistake? The capital value of any fixed-rate instrument will drop as interest rates rise hence I have avoided them.

I hear what you say about collective investments but whenever I buy funds, they promptly lose 20% or more and quite frankly have been a nightmare. I do much better with the individual shares which at least aren't incurring ongoing management charges albeit small on ETF's

I suppose if I were 'rebalancing' I should be buying more resources right now as most of my resources shares have tanked and aren't worth much. However selling property to buy resources right now seems the wrong thing to do?

le_loup

EdGasket wrote: »

erm; ever heard of a spreadsheet?

It's not the list keeping, it's the research needed.

Linton

EdGasket wrote: »

I hear what you say about collective investments but whenever I buy funds, they promptly lose 20% or more and quite frankly have been a nightmare. I do much better with the individual shares which at least aren't incurring ongoing management charges albeit small on ETF's

I suppose if I were 'rebalancing' I should be buying more resources right now as most of my resources shares have tanked and aren't worth much. However selling property to buy resources right now seems the wrong thing to do?

Funds invest often in 100's of individual shares. It is somewhat unlikely that these will all fail. At some time any equity fund will drop by 20%, the riskier ones may well drop by signicantly more. However assuming they are mainstream funds they are very unlikely to never rise again.

If you wanted to invest in Resoures as a distinct sector you should preallocate a small % of your portfolio, say 5%, for the purpose. Then buy more as the actual % drops. So yes you should be buying more, but not a vast amount more, and selling some, but not a lot, of the funds which are showing a good profit. Yes it does seem the wrong thing to do but you need to control your gut instincts.

Have your fund losses occurred because you have continually bought into niche areas that have recently done well and have received rave recommendations in the press and the net? What Dunstonh refers to as "fashion investing"? It guarantees you will buy too much well after the boom has started and come unstuck with the bust.

EdGasket

Linton wrote: »

and selling some, but not a lot, of the funds which are showing a good profit..

Unfortunately I don't have any of those! All bar Vanguard Global Income ETF are down and the Vanguard one is only up a few percent. The ones that are down are down by 10 to 30% or more; hopeless. They are emerging markets, asia pacific, latin america, Bric, Korea, Europe, gold, resources, and agriculture. All down hence my post!

I tried to buy funds off their peak but unfortunately all they do is carry on going down.

jimjames

EdGasket wrote: »

Unfortunately I don't have any of those! All bar Vanguard Global Income ETF are down and the Vanguard one is only up a few percent. The ones that are down are down by 10 to 30% or more; hopeless. They are emerging markets, asia pacific, latin america, Bric, Korea, Europe, gold, resources, and agriculture. All down hence my post!

I tried to buy funds off their peak but unfortunately all they do is carry on going down.

You do realise that funds are available for low risk areas too? Invest in funds that are high risk and it's likely you will experience very large increases and drops. None of those areas could be considered low risk.

I think you need to fundamentally review your strategy but probably start with learning more about options and different investments as well as risk.

gadgetmind

The easiest way to lose money quickly is to try to make money quickly! Your portfolio has responded the way a very unbalanced portfolio often responds, and it's nothing to do with "the stockmarket" in general.

EdGasket

Well they do cover most of the globe bar the US which looks expensive so I avoided there! Most 'reduced risk' funds have varying proportions of bonds and as explained above I don't want to be in any sort of fixed-rate investment with interest rates likely to rise.

EdGasket

gadgetmind wrote: »

The easiest way to lose money quickly is to try to make money quickly! Your portfolio has responded the way a very unbalanced portfolio often responds, and it's nothing to do with "the stockmarket" in general.

Really? But FTSE was at 6800 in year 2000 and is at 6151 as I write. So in 15 years it too is down around 15%. Hence my post and question - is anyone else making an overall loss in S&S investments?

gadgetmind

You're ignoring dividends.

Dec30 1999, FTSE 100=6930, FTSE 100 TR=3141 * (Dot com crash high. Reached 6950.6 during day.)
Mar12 2003, FTSE 100=3287, FTSE 100 TR=1624 * (Dot com crash low)
Jan30 2006, FTSE 100=5780, FTSE 100 TR=3141
Aug28 2015, FTSE 100=6248, FTSE 100 TR=4855

See how total return shows a different picture with dividends reinvested? Also contemplate how much better return you've have seen if drip feeding each month?

So to answer your question, yes, over the decades I've done *very* well from investments. The dot com crash and credit crunch both *helped* as will the current wobbles.