New to investing - Robbins Money - Master The Game - How to apply in the UK?

Louise199

Ok, wow, where do I begin? I am not going to keep saying it but a huge thanks!

So the gist I am getting is this portfolio split is no good, particularly in the UK Stock market - scrap it!

I am relived to learn that these trackers aren't mutual funds, I know that may sound stupid but you never know how things are disguised.

Mutual funds underperforming - again I am quoting the book, but it was explained in the way that Froggit explained with regards to high fees and ultimately underperforming.

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My investing is wrapped in an ISA I opened with HL.

So as you know I already track the FTSE 100 with L&G tracker - shall I continue to do so and invest in the 250 or 350 as well, or just invest in the 250 / 350?

Golbal indexes too, International investment trusts - are their any recommendations?

I've looked with interest at the Vanguard Lifestratergy funds too and believe they're definitely for me - the unseasoned investor. I am intrigued by the 80:20 split, I am exactly 30 and so will be in the game longer / can shoulder more risk - and also I do have a certain romance to the Pareto principle - you could argue that principle alone has gotten me to a place where I have the money to invest!

One last thing on the Vanguard fund - INC or ACC - I assume ACC as it reinvests the dividends and I am not looking for an income from this?

With regards to saving / investing - again showing my naivety here but I am looking at £500 a month to squirrel away, I was thinking of a 50:50 split between straight saving and investing? What do you think, invest more, save more?

@ Radiantsoul - the clearing debts etc I like that thanks!

Thank you!

dunstonh

I am relived to learn that these trackers aren't mutual funds, I know that may sound stupid but you never know how things are disguised.

Mutual funds is an american term. it has drifted over here but in the UK sense, mutual funds cover unit trusts/OEICs and some other types. The investment strategy of the fund does not dictate whether it is a mutual fund or not. So, a tracker or managed can be a mutual fund.

Mutual funds underperforming - again I am quoting the book, but it was explained in the way that Froggit explained with regards to high fees and ultimately underperforming.

As mentioned, the book is wrong for the UK market. It is more accurate for the US.

So as you know I already track the FTSE 100 with L&G tracker - shall I continue to do so and invest in the 250 or 350 as well, or just invest in the 250 / 350?

Your investment amount is small. So, building a portfolio of single sector funds (which will take around 10 funds depending on what strategy you use) is largely a waste of time and energy until you get a much higher value.

You are much better off investing in a multi-asset solution at this time. Then learn about it until you have around 30k plus and then look at having a play on the single sector side.

One last thing on the Vanguard fund - INC or ACC - I assume ACC as it reinvests the dividends and I am not looking for an income from this?

Depends on what platform you are using and if a cash account exists. Having the income paid into the cash account to pay charges is often more favourable then having to sell units to pay charges.

ith regards to saving / investing - again showing my naivety here but I am looking at £500 a month to squirrel away, I was thinking of a 50:50 split between straight saving and investing? What do you think, invest more, save more?

Depends on your objectives, your current savings and your risk profile. There is little point putting money into cash that is going to be there 30 years. However, you need cash for short term needs. We dont know what your needs are. So, you need to work those out.

TheTracker

Linton wrote: »

The average European Small Companies Sector Index returns exceed all european ETFs including any that focus on smaller companies Please feel free to check it. Trustnet has a section on passive funds. Again the same thing applies. No passive fund, including those that follow the MSCI EMU Small Cap Index, exceeds the Europen Small Companies managed fund average for 1, 3 and 5 years. Over 5 years the IA Index shows a 45% return, the MSCI Index shows 32%. I cant find any 10 year data.

I suspect we are talking different things. We are both intelligent beings with communication skills who think seriously about investing and draw different conclusions, there is nothing unusual or terribly concerning about that.

I'm not really sure what to say, except we've done this before. By the way, the trustnet site is horrendous and clearly they've done no user needs analysis. A lot of UI head scratching after digging up my password. On trustnet I think I could kinda after a couple of filters discern that a European Small Cap tracker returned 8.1% and 33.0% over 1 and 3 years whereas the 13 funds that the trustnet filter showed returned 10.5% and 33.7% respectively.

That means absolutely nothing because I couldn't care less what the average fund did. Those funds may have anywhere from say £1m to £500 AUM (I didn't check) and an average by fund is useless as a result. And I've no idea whether or not trustnet is showing all funds or just those it chooses to be shown or that meet some other criteria.

So anyway I went to check what SPIVA found for European Small Companies 2015. You can find a mid year report online with a popular search engine. I like how The Evidence Investor described it "The latest scorecard also exposes the myth, repeatedly pedalled by the industry, that active managers perform better in less well-researched (and supposedly less efficient) markets. Even over 12 months, for example, ... 85% of UK small-cap funds have failed to beat the index." He wasn't alone, the press release from SPIVA themselves said "UK Small Cap-Equity funds did not perform well over any time period. Over one, three, five and 10 years, they were outperformed by their benchmarks for each period", the FT said "Fewer than one in five UK small-cap and sterling-denominated emerging market fund managers beat their benchmarks over 10 years.", Swedroe said "in the “less efficient” category of small-cap stocks, the failure rate was 85 percent." and there are many more reports freely available.

Sorry, I'm afraid some kooky trustnet filters don't rank well on my scientific BS test.