How would you invest in my situation

racing_blue

There was a thread where people talked about their investment strategies and returns over 2015. I was interested so kept a note:

George4064 Acorn Income Fund. Edinburgh IT. European Assets Trust. Biotech Growth Trust. Woodford Patient Capital Trust. CF Woodford Equity Income 21.26%
ColdIron Woodford Equity Income 17.50%
Bazofts Revenge Provident Financial, Segro, Dominos, KCOM,Woodford EquityIncome, Centrica, Tungsten Corporation, Morrison, others 16%
Wooder Fundsmith 15.74%
chesterdog Legg Mason Japan,MFM Slater Growth, Woodford Equity, Fundsmith Equity, Small Companies Div Trust, Capital Partners IT, Scottish MOrtgage IT, Worldwide Healthcare IT, Baillie Gifford Global Discovery, Fundsmith Emerging Markets, India Capital Grwoth, VWRL, others 11.80%
Sacrpacci shares, large portion US listed 8.60%
RedPete undisclosed 5.20%
pip895 managed funds avoiding miners 5%
MattyGroves2 divesified selection of Uk Shares and managed funds 4.57%
Linton large diversified portfolio of managed funds 4.24%
TonyMMM "a number of funds" 4.12%
JimJames funds and ITs 3.50%
Doshwaster fund and shares 3.10%
TheTracker undisclosed but content 2.50%
Kangoora Various "SL branded funds" 0.015
JohnRo Regional/global index tracking 80%, managed specialist fund 20% 0.04%
ffacoffipawb Investment Trusts -0.90%
AlanP tracker funds -1.09%
broken biscuits undisclosed -1.10%
Ruperts Vanguard 80/20 74%,other trackers -1.55%
enthusiastic saver "stocks and shares" -4.09%
racing blue global tracker, shares, commodities -6.80%
InvestinPoker emerging markets, Woodford -9%

As you can see, I was near the bottom, so no hubris here! According to this article the average return of the market over the past 70 years was 10.7%. But the average return of the individual investor was 1.9%

Interestingly I'd like to self build in the future too, probably during a career sabbatical which may even end up being an early retirement. I have two possible strategies in mind 1) use investment portfolio; 2) sell my current house and build with the equity released. If I keep generating returns of -7% on my investments, it will be option 2 for sure!

lawriejones1

I e recently worked with a Cambridge research team for a large finance firm and the average return from a selection of the most popular UK funds has been at 5.1% over the past 15 years.

We then created an average portfolio with a spread of assets and funds, and modelled the behaviour choices of the average investor, and the average returns were around 3.0% as a result of high costs and attempts to time the market. Study was limited to UK investments, so those investing abroad (which makes perfect sense) may have seen much higher gains.

Basically 5% is pretty good.

redpete

racing_blue wrote: »

There was a thread where people talked about their investment strategies and returns over 2015. I was interested so kept a note:

With the reported returns in the range +21.3 to -9% this shows how meaningless it is to ask "What returns have you achieved on your investments?". The wide range of variances of how much,, when and where are too complex to give a meaningful simple response.

racing_blue

but Pete, it may be meaningful to the OP, who asked:

"I've tried to look into stocks and share isas etc but I can't seem to find any details of profits anybody has ever made. I know it's random and depends on market but I'd expect to be able to see people saying that they made a 10% return this year or something along those lines but I've found nothing."

sean9461

Do premium bonds return similar amounts to shares in the long run?

RichyRich

sean9461 wrote: »

Do premium bonds return similar amounts to shares in the long run?

They do better than Enron shares did.
They tend to do worse than a well balanced portfolio and indeed the highest paying cash accounts.

sean9461

I still seem at a loss as these methods don't seem to even compare to property!

If I can get gaurenteed rent from a family member that will be 1.6x the mortgage and have the mortgage paid off on a second property in 10 years aswell as my own property would that not be my best option first and foremost?

racing_blue

Well it sounds like a good option, but only time will tell whether it was the best option. For example, property as an asset class could drop 30% over the next 10 years while stock markets rise 100%. I'm not saying that's what will happen, just that's one of all possible future outcomes. That's the reason why many people favour a diversified investment portfolio which might include shares, fixed income, property and maybe other stuff too

masonic

sean9461 wrote: »

If I can get gaurenteed rent from a family member that will be 1.6x the mortgage and have the mortgage paid off on a second property in 10 years aswell as my own property would that not be my best option first and foremost?

Maybe, maybe not. You need to work out what the real return from your second property is likely to be. Add up the rent over the year, subtract the average mortgage interest, any tax you'll pay on the income, maintenance/insurance costs etc. Then subtract 1-3% or more for inflation (whatever you think it will be over the next few years). Add on an estimate for house price growth. Fortunately for you, you would probably not need to make any deduction for void periods in the tenancy. What percentage do you end up with? We've already discussed 5% being a reasonable long term figure for equities.

When you borrow to invest in property, the leverage means that your returns are magnified, but so is your risk. Putting all your eggs in one basket can lead to either the best or the worst possible outcome, or more often somewhere in between.

Chickereeeee

racing_blue wrote: »

According to this article the average return.....

Um...I think you mean Completely Random Advertisng Promotion.

C