Risk averse but ....

waveydavey48

Fair comments - by "frozen" I just meant no further contributions are being added since I left that employer, sorry I don't know the correct term.


My (probably incorrect) memory of what motley fool said was that most fund managers failed to do better than the market and charged for the privilege. MF thought you could get the benefit of increases in share prices in the long term by just buying an index tracker. I certainly wouldn't have bought a particular product they promoted but the idea of a tracker did sound interesting.


I take your point about taking a punt. I didn't explain properly. I wouldn't risk the bulk of my cash but if there was a relatively safe option I would invest a smallish percentage of my savings in it.


Thanks for your replies

Eco_Miser

waveydavey48 wrote: »

My (probably incorrect) memory of what motley fool said was that most fund managers failed to do better than the market and charged for the privilege. MF thought you could get the benefit of increases in share prices in the long term by just buying an index tracker. I certainly wouldn't have bought a particular product they promoted but the idea of a tracker did sound interesting.

It's not just Motley Fool who think that, though a single index tracker is likely to miss a lot of the world market.

Monevator are also fans of passive investing, and have lots of articles, and links to others.

dunstonh

My (probably incorrect) memory of what motley fool said was that most fund managers failed to do better than the market and charged for the privilege. MF thought you could get the benefit of increases in share prices in the long term by just buying an index tracker. I certainly wouldn't have bought a particular product they promoted but the idea of a tracker did sound interesting.

They were agents of legal and general selling index tracking funds. They got paid to say that.

There is nothing wrong with the right index trackers or the right managed. It is how you use them that matters. For example, single sector funds are designed to be used in a wider portfolio of other single sector funds. So, having one index tracker (or managed) covering one sector means you have 9 sectors or so not covered.

The best solution for novice/small investors is multi-asset funds.

Malthusian

Quite possibly the index tracker fund suggested by Motley Fool was reasonable. But most of what they write is garbage. They write articles that score very highly for search engine optimisation, which constantly appear on the top of Google Finance pages and Google News results, and very low for useful information. These articles start by talking about the "hook" that got them onto Google's radar, then go on to say "but enough about this share, we're going to tell you about the superhot fire stock that will engorge your portfolio with hot sticky market-beating returns" only you have to sign up to their newsletter to find out what it is. (They always talk about shares in the same gushing purple prose my wine dealer uses to talk about wine.)

Once you've signed up to their newsletter it's then one more upsell to sign you up to their share trading sites, so they can take a fat commission every time you follow their daily exhortations to churn your portfolio.

So yes, it's generally a bad idea to read Motley Fool's SEO garbage if you are an inexperienced investor, as it encourages a very high risk and very expensive "investment" strategy.