How much have you made/lost in Investments since you started (Roughly)

economic

interesting commnents. i alsways hear stocks are best for the long run etc etc. i think timing is much more important. you could buy stocks now and they are lower or underperformed cash on 20 years time. we just do not know what the future brings. therefore its best to be diversified. my asset class split is as follows which i will keep maintain more or less:

property - 50% (just the equity)
cash (includes P2P) - 25%
equities (includes pensions) - 25%

masonic

economic wrote: »

interesting commnents. i alsways hear stocks are best for the long run etc etc. i think timing is much more important. you could buy stocks now and they are lower or underperformed cash on 20 years time. we just do not know what the future brings. therefore its best to be diversified.

Of course, for the purposes of this discussion, we are comparing the performance of a lump sum invested and held over the stated time period. That's the best way to compare returns for different investments on a like for like basis, but it isn't the way most people invest.

Most will drip feed their investments gradually from their income. That has quite a significant risk-spreading effect and guards against those black swan events where equities come crashing down. Drip-feeders are only really going to suffer cash-like returns over long investment horizons if one of these events comes right at the end. In fact, if it comes towards the beginning, drip-feeders benefit greatly from lower valuations.

It is those who are nearing the end of their accumulation period that are at significant risk, and for those people preservation of capital becomes much more of a priority. So, the extent to which an individual might wish to reduce equities exposure and diversify into other asset classes depends very much upon what stage they are at on their investment journey.

Moneycoach

Pincher wrote: »

This is exactly the opposite to the diversification principle.

One BTL house, bought at £170k, sold at £960k.
~£120k in capital gains tax.
The rental income went from £20k to £25k in 19 years.

In 2003, re-mortgaged to £170k, so effectively the original investment was totally taken out.

From 2009, the interest only BOE tracker mortgage only needed £4,000 a year to service, versus the £24k rental income. Roughly, it was generating £15k income for no money down, because of various expenses. The £4,000 was deductible against the rental income.

If you believe Zoopla, the price went up by ~£100k in 2014, which was hilarious, considering no money was invested.

Insightful.

Moneycoach

masonic wrote: »

My posting history is available for anyone to browse. I invite you to take a look. I think I make an adequate contribution to this forum and will probably continue to do so long after you have moved on.

You may think a post designed to put others on their guard is unhelpful. However, I've seen dozens of new posters register an account and then go on to pepper various threads with posts in order to lose their 'newbie' status and get their post count up and as quickly as possible, so that they are then able to move on to the second phase of their plan, which might involve self-promotion or posting referral links or soliciting PMs from unsuspecting newbies.

It is not uncommon for quite extraordinary claims to be made during this part...


But past performance is no guide to the future. Oh, wait...


I stand corrected! :rotfl:

Very clever, however I stand by my original post about you for which I was thanked by another forum member.


We are still waiting for you to contribute something of value regarding the question posted by the OP...

Moneycoach

racing_blue wrote: »

Au contraire! The FTSE100 on 19th June 2006 stood at 5626. Ten years later it stands at 6021, an annual return of 0.86% when compounded.

Had it increased by 5% each year it would now be over 9000

RB, I stand by my original point, 5% average return is mediocre. The top performing funds achieve more than that,. I am purely talking about growth funds. If you invest in a tracker fund you will get results as you mentioned above, however the top performing companies and funds will have grown by more.


Also, if you look at the 1996-2016 period the growth trajectory changes. As they say its not timing the market but time in the market.

Moneycoach

racing_blue wrote: »

Sure. But I'd be wary of extending this argument to suggest that returns of 5% for a private investor are "crap", or even average.

I'm only an armchair enthusiast, but the material I have read* suggest that private investors as a group return around -2% to 0% on average. So I think 5% is good. One of the reasons I'm interested in this thread!

*Edit: for example this for data and views on historic and expected market returns, and this for a list of reasons why individually we are likely to fare worse.

I understand and don't mean to cause any offence, but you are quoting "average" private investors.
I am saying let's not be happy with being average, we should aim to be in the top 20% as per the 80:20 rule.
I bet the wealthy fund managers and their clients in London are averaging more than 5% growth and would be disappointed with that growth.

Moneycoach

SimonBlake wrote: »

Check fund factsheets and Google Finance for specific shares. Or check Neil Woodford's equity income fund for some short-term return proof.

Exactly!!..

Moneycoach

masonic wrote: »

I think it is absolutely reasonable to consider returns of 5% for a private investor over this most recent 10 year period to be towards the bottom end of what could be regarded as acceptable.

The absolute minimum investment return any investor should be willing to tolerate is the return that is delivered by an appropriate passive investment. This might be a FTSE All share index tracker, or a combination of trackers that include other markets and/or bonds. If you had your investment in (or spread between) US, European, UK markets in any combination together with some optional percentage in UK gilts, appropriate index trackers would have delivered in the region of 5% (the worst case scenario would be someone investing in just the expensive retail unit class of the popular HSBC FTSE All share index in 2006 and not switching into cheaper trackers when they came along a few years later - this would have only delivered 4.5% - but in reality, the switch to the cheaper Vanguard tracker would have been a no brainer).


This seems rather reminiscent of a discussion we had a few months ago here. Not wanting to repeat too much, the discussion could be summarised as: The average investor who does their own stockpicking absolutely does do much worst than the market return and that can be explained by a systematic transfer of wealth from private investors to institutional investors. That is no reason to set the bar so low, since there are known instruments that will deliver returns that are very close to the market return. Anyone whose own performance is tending towards the average private investor should really consider using those instruments instead.

Good contribution, you are actually supporting what I have been saying and making me eat my words at the same time sir...


Much respect to you.

bowlhead99

Moneycoach wrote: »

Also, if you look at the 1996-2016 period the growth trajectory changes. As they say its not timing the market but time in the market.

Yes, the trajectory changes. Is the trajectory now showing the 10-20% upwards which your adviser tells you to aim for?

I'm not doubting that the top performing fund in a particular year or two may give a 10-20% annual return across that couple of years. But next year it will be a different sector. And then a different one, and so on. The top growth sectors will change and the top funds within a particular sector will change. Some managers are successful over very long time periods but it is difficult to identify them in advance.

With hindsight, you could probably put together a portfolio of 5-10 long term top performers that have done 10-20% consistently year in year out, staying 'in the zone' - but to identify that specific mix ahead of it delivering, is like a needle in a haystack, given there were literally millions of permutations that could have been selected from the thousands of funds available.

Moneycoach wrote: »

I have been advised to aim for between 10% -20% and that is what my current investments are doing.

One of them is held with a fund manager who has a good 28 year reputation and started his own fund about a year ago and it achieved 16% gross.

I won't say who, but Google could help... This tip is for all...

I'm going to go out on a limb and guess you are talking about Neil Woodford as the celebrity star manager that has 28 years of reputation having moved to Invesco in 1988 and launching his own firm recently.

He launched his first fund under his own brand on 2 June 2014 and by a year later, 4 June it had grown by 20%. Great. But in the last year to 17 June 2016 it's not up another 10-20%... it is down 0.5% instead.

In April 2015 he launched another investment vehicle, an investment trust with a different strategy. The latest NAV of that one from Thursday night was a little under 92p (started at 100p before launch costs). So that has been going over a year but hasn't succeeded in delivering the 10-20% a year target either, yet.

Your long term target of 10-20% annualised is far fetched. If you were thinking of someone other than Woodford for your selective data points, do let us know rather than being cryptic and telling us to use Google to find some proof of your assertions. Those of us experienced in investments do not need to Google to tell us we shouldn't get 20% compound from our investments over the long term.

Actually, Google itself is an example of an equity investment that has delivered 20% compound, but that is only one single company, rather than a collective investment scheme - and if you had invested in a balanced portfolio of Google-wannabees back in 2004, you would not have got anywhere near that, because most faded into obscurity.

Thrugelmir

Moneycoach wrote: »

I bet the wealthy fund managers and their clients in London are averaging more than 5% growth and would be disappointed with that growth.

From the FT 14th February 2016.

"Some of the largest and well known US hedge funds have suffered further sharp losses from this year’s rout in equities and commodities, raising the prospect that investors pull more money from the industry."

I bet you'll be disappointed.