MoneyFarm or funny farm?

george4064

On the topic of rebalancing, what I do is direct new money to my holdings that have had the lowest relative performance to the others, same goes for income too.

Its a semi-rebalancing process that doesnt require any selling!

Little_Miss_Moneysaver

Eco_Miser wrote: »

I'm not a financial whizz-kid either, and I've never actually re-balanced, but here goes.
a)Keep a spreadsheet listing the values (and unit prices) of each of your investments, their total value, and the percentage of that total value that each investment is. .....
d) You could sell everything except LifeStrategy, and buy more of that. Problem solved.

Wow Eco Miser - You are infact a math whizz-kid! :T
I do understand what you're saying with Option A for Rebalancing, and am slightly tempted to do it.

However, i lack free time for such fun activities (the well-paying job takes up most of my waking hours in the day ).
And, i'm very wary of doing the mathematical calculations accurately / correctly by myself!
I'd need someone to check my math for me after doing calculations, to ensure i've not made a total hash of it!

So, option D sounds really great at the moment - for the stage i am at, in my investment knowledge. Thank you again for your support and help!

As it's the new tax year, i'm ready to contribute another £20k to my Stocks & Shares ISA - which will make mine £50k after this year's input.
From reading elsewhere on the internet, i am aware that Cavendish Online is no longer as cost-effective, for investments greater than £30k, due to it's percentage charging structure.

I belive i-web is going to be more cost-effective to contribute the £20k from this year + transfer £30k from previous years Vanguard Lifestrategy held with Cavendish Online - due to iweb's £5 per trade fee, NO platform charges, and only £25 account opening fee.

I noticed you had posted on another forum thread on this website, re: your iweb experience.
Last question for you - I hope you can put me right, if i've not understood iweb's latest fee charging structure correctly?

From what i understand, their account opening fee has gone back to being £25, instead of the £200 it was last year. Is this correct?
Any feedback on this would be greatly appreciated!

Out of curiosity, i also looked at opening a Moneyfarm Stocks & Shares ISA (in addition to my General investment account that i already have with them), due to an offer they currently have + my periodic "paralysis by analysis" moments.

However, that works out far more expensive than Cavendish or iweb, so won't pursue that!

So, I will just stick with my GIA account with Moneyfarm, as it gives exposure to ETF's, and a wider range of asset classes (as compared to my Vanguard Lifestrategy's passive tracker funds - which just invest in just bonds & equities).

Just my personal thoughts, in my investing journey - in case it's of any help to anyone else!

Little_Miss_Moneysaver

george4064 wrote: »

On the topic of rebalancing, what I do is direct new money to my holdings that have had the lowest relative performance to the others, same goes for income too.
Its a semi-rebalancing process that doesnt require any selling!

Interesting take on rebalancing. I assume the numbers would work out all the same in the end?

I think if i was better at math / had more faith in my math skills in doing the job correctly, i'd be tempted to try this!

I think i'm going to stick with my holdings in Vanguard Lifestrategy & Moneyfarm because of it's automated rebalancing abilities + less chance of me making a mess of the numbers!

Rollinghome

Looks like a similar offering to Moneyfarm from evestor https://www.evestor.co.uk/fees , set up by the bod behind moneysupermarket.com, owners of the MSE site - 0.5% pa.

Little_Miss_Moneysaver

Looks like a similar offering to Moneyfarm from evestor https://www.evestor.co.uk/fees , set up by the bod behind moneysupermarket.com, owners of the MSE site - 0.5% pa.

Thankyou Rollinghome for bringing my attention to Evestor.

You're right - their fees are lower than Moneyfarm.

But their website looks like they're not open for business just yet... so their business offering is still under construction.

I have bookmarked their website, and will look at in a few weeks, to see if they've started trading yet.

There are no exit fees to move your portfolio away from Moneyfarm, so will consider Evestor if they appear to be a serious contender, when they open for business.

I have to say, i do like this race to the bottom for Fees, for Robo-investment portals, as finally consumers are getting value from the financial services world (after spending many years being ripped off)!

JohnRo

These robo investment portals as you call them are a rip off.

I can't help but wonder how they afford to be so cheap if they're offering independent financial advice. The answer must be that they're not offering independent financial advice.

All they're really offering is a packaged product selection that provides access to an already existing fund marketed as something else, which can already be bought and held cheaper elsewhere.

It's unlikely the 'advice' will be worth the paper it's written on imho. Their sales pitch is designed to fleece those who can't be bothered jumping a couple of very low DIY hurdles by themselves.

username12345678

Tbf, i'm pretty underwhelmed by the fund selections of the discretionary manager chosen by my IFA. After adding up the managers fee, IFA fee and average fund ocf's it's comfortably north of 2% pa.

I checked the WMA website so I can see how they were guided on asset allocation but after using the morningstar xray I was pretty disappointed to see the same shares sat in 4 and sometimes 5 of the funds.

I could set-up an MSCI World ETF+Vanguard Global Bond and add in a Blackrock property tracker plus maybe an EM tracker and the costs would be less than 1/10th pa.

And that saving is more than my families discretionary spending each year.

dunstonh

Tbf, i'm pretty underwhelmed by the fund selections of the discretionary manager chosen by my IFA. After adding up the managers fee, IFA fee and average fund ocf's it's comfortably north of 2% pa.

You shouldnt need to go over 2% nowadays. I am no fan of DFMs. They just add an extra layer of charges, allow the adviser to pass the buck (but not the liability) and typically result in lower returns.

I could set-up an MSCI World ETF+Vanguard Global Bond and add in a Blackrock property tracker plus maybe an EM tracker and the costs would be less than 1/10th pa.

Costs may be cheaper but I wouldnt want my money invested that way. Finding something in the middle may be better.

username12345678

dunstonh,

What are your thoughts on covering as much of the investable universe (equity, fixed income, property) as a strategy?

I'm trying to think what the 'middle ground' may be that isn't taking a punt on a fund manager taking punts. The evidence is pretty damning now about actively managed funds trying to beat their benchmarks over an extended period.

I'll post a comments collection that refers to the simple 'Three Fund Portfolio' which is, of course, US slanted but can easily be adapted for UK investors.

I'd be interested in yours views on the potential flaws.

Three Fund Portfolio

https://www.bogleheads.org/forum/viewtopic.php?p=1263681#p1263681

username12345678

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Christine Benz, Morningstar Director of Personal Finance: "By buying total-market index funds--one for U.S. stocks, one for foreign stocks, and one for bonds--investors can gain exposure to a huge swath of securities in three highly economical packages."

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Rick Ferri, Forbes columnist and author of six investment books: "The older I get, the more I believe the 3-fund portfolio is an excellent choice for most people. It's simple, cheap, easy to maintain, and has no tracking error that would cause emotional abandonment to the strategy."

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Prof. Burton Malkiel, author of Random Walk Down Wall Street: "I recommend a total-maket index fund--one that follows the entire U.S. stock market. And I recommend the same approach for the U.S. bond market and international stocks."

Harry Markowitz, Nobel Laureate: "A foolish attempt to beat the market and get rich quickly will make one's broker rich and oneself much less so."

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Jane Bryant Quinn, syndicated columnist and author of Making the Most of Your Money: "The dependable great investment returns come from index funds which invest in the stock market as a whole."

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Paul Samuelson, Nobel Laureate: "The most efficient way to diversify a stock portfolio is with a low-fee index fund. Statistically, a broadly based stock index fund will outperform most actively managed equity portfolios."

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Bill Schultheis, author of The Coffee House Investor: The simplest approach to diversifying your stock market investments is to invest in one index fund that represents the entire stock market."

Charles Schwab: "Only about one out of every four equity funds outperforms the stock market. That's why I'm a firm believer in the power of indexing."

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William Sharpe, Nobel Laureate: "You may think your opinion is superior, but it pays to be humble, investing in the market rather than trying to beat it."

Robert Shiller, Nobel Laureate: "A portfolio approximating the market may be the most important portfolio."

Prof. Jeremy Siegel, author of Stocks For The Long Run: "For most of us, trying to beat the market leads to disastrous results."

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Larry Swedroe, author of 17 financial books: "Over the last 75-years, investors who simply invested passively in the total U.S. stock Market would have doubled their investment approximately every seven years."

Peter D. Teresa, Morningstar Sr. Analyst: My recommendation: "A fund that indexes the entire market, such as Vanguard Total Stock Market Index."

Wilshire Research: "The market portfolio offers the best ratio of return to risk."

John Woerth, Vanguard director of public relations: "We would agree that this three-fund approach offers most investors a prudent, well-balanced, diversified portfolio at a low cost."

Jason Zweig, Wall Street Journal columnist and author of Your Money and Your Brain: "I think a total stock market index fund is not only the simplest, but the very best core investment for most people."

Warren Buffett, famed investor: "There seems to be some perverse human characteristic that likes to make easy things difficult."