New years investing resolution

tatties

Thanks all, easy to understand invaluable information from you guys

richyg

Stick with one fund tatties for a year or two else the following is a real risk.

When one of your funds turns negative and shows up as a downwards arrow and red :mad: as opposed to the other one heading upwards and blue, :j
then you may suffer misery thinking you made a bad choice and decide to sell the nasty fund that has gone down and buy something completely different to erase the red from your balance sheet.

Here will lie a miserable investing future but its an easy pitfall to fall into, and a bad habit to start off with.

Invest for the long term through all the ups and downs and you should do alright.

Dird

Any reason you've gone with VSL other than the name? Last 2 years it's done worse than you'd get from bank accounts & last 3 years comparable to accounts. 4-5 years ago seems all funds did well

JohnRo

Dird wrote: »

Any reason you've gone with VSL other than the name? Last 2 years it's done worse than you'd get from bank accounts & last 3 years comparable to accounts. 4-5 years ago seems all funds did well

Isn't hindsight a truly wonderful thing.

Dird

JohnRo wrote: »

Isn't hindsight a truly wonderful thing.

Other than choosing a brand name or going on past performance how else are you going to judge? Especially a fund not even with 5 years of figures. Can't imagine many people choosing to invest in a fund if it lost about 20% in each of the last 5 years for example

tg99

Dird wrote: »

Can't imagine many people choosing to invest in a fund if it lost about 20% in each of the last 5 years for example

That's exactly why it might actually be a great time to buy such a fund.

JohnRo

Especially a fund not even with 5 years of figures.

You were talking about bank accounts versus VLS, I'm not sure your assertion is correct anyway.

A quick look on HL's website shows VLS100 as follows

31/12/11 to 31/12/12 - 11.82%
31/12/12 to 31/12/13 - 20.81%
31/12/13 to 31/12/14 - 8.97%
31/12/14 to 31/12/15 - 3.68%

The individual index components also have longer histories than the VLS "wrapper".

Dird

tg99 wrote: »

That's exactly why it might actually be a great time to buy such a fund.

In like 0.1% of times perhaps. Some will have cut their losses and replaced bad stocks with more bad stocks over that time. A small percentage might be holding on to good stocks that have somehow done crap for 5 years running if that's even possible. The rest are holding on to their shares in blackberry praying for a miracle

Linton

Dird wrote: »

In like 0.1% of times perhaps. Some will have cut their losses and replaced bad stocks with more bad stocks over that time. A small percentage might be holding on to good stocks that have somehow done crap for 5 years running if that's even possible. The rest are holding on to their shares in blackberry praying for a miracle

That isnt how most funds work. Mostly funds will invest in a wide range of shares generally or in a particular niche sector. So they will largely rise and fall with world markets rather than rising and falling according to success or failure with specific stock picks. It's probably a good idea to avoid small funds which appear to do the latter (look at Manek Growth).

So, unless you believe that a specific country or industry is in permanent decline you can be fairly sure that a downturn will be followed at some stage by an upturn. For example raw material funds have dropped by over 50%. Do you think that the world will no longer need drillers and miners? Or do you think that when global growth returns the sector will recover? That is why it is often a very lucrative idea to buy sectors that are currently showing major falls.

Fund investing is very different to investing in individual shares.

Dird

Linton wrote: »

For example raw material funds have dropped by over 50%. Do you think that the world will no longer need drillers and miners? Or do you think that when global growth returns the sector will recover? That is why it is often a very lucrative idea to buy sectors that are currently showing major falls.
Fund investing is very different to investing in individual shares.

Only when it's towards the bottom. I wouldn't want to invest in steel/oil now when 2016 is probably more losses. Similarly, Africa might be a semi-decent place to live in 50-100 years but doesn't mean now is the time to invest with their weird ethnic & religious issues on-going.

Yes the funds invest in multiple companies but the same principle applies. Since they all take a management fee I'd hope that they're reviewing each investment every quarter with sales results at least.

FTSE 100 has ended the year lower than it started, does that mean now is a good time to invest in a tracker? Not when I think it's more likely to hit 4k than 8k in the next 5 years