Maximising investment portfolio performance

Oggers

That's like picking a football team consisting only of strikers because you want it to score the most goals. Meanwhile, no one is in goal at your end...

Not at all - its is like picking a football team with the best possible players in all positions.

MyOnlyPost

Oggers wrote: »

That's like picking a football team consisting only of strikers because you want it to score the most goals. Meanwhile, no one is in goal at your end...

Not at all - its is like picking a football team with the best possible players in all positions.

No it's not because that's not what you are doing.

Assuming you have picked the best 7 "players" for your squad and they all play different positions, you are not transferring them for better players in the same positions, just deciding which of your players to give the ball to based on last weeks performance.

bowlhead99

Oggers wrote: »

That's like picking a football team consisting only of strikers because you want it to score the most goals. Meanwhile, no one is in goal at your end...

Not at all - its is like picking a football team with the best possible players in all positions.

Well if that's your strategy you haven't implemented it very well in the portfolio described in your first few posts.

You have bought seven funds that all predominantly invest in UK equity. So, you have got seven left wing midfielders. And your team briefing is for them to all go out and be the best possible player in their position. But you didn't buy any other asset classes (forwards or defenders) and you didn't buy any coverage for the other parts of the pitch like right wing midfield, defensive midfield, central midfield, attacking midfield, or a roaming set piece specialist (Japan, Asia Pacific ex Japan, continental Europe, North America, emerging markets, etc).

You can tell all those left wing midfielders in your squad that their job is to fight for their position by proving that they are the best of the seven at crossing and dribbling and tackling and running off the ball and throwins and free kicks, oh and shooting - and then play a 7-aside game against some organised team. You would probably get beaten by the team that has a proper specialists filling each position. Or a team with 7 genuine all rounders.

However much your squad outperforms a "benchmark" team constructed entirely of left wingers, if it doesn't experience optimum playing conditions for its specialities, it could be a very long time before it reaches the champions league.

bigadaj

Always need a good holding midfielder.

ChesterDog

Yep, you have effectively watched a few recent top-flight matches, picked out a Man of the Match from each, regardless of what position they play, and created yourself a 'team' consisting only of those players.

That's not really a team at all.

And it never will be, especially if you repeat the exercise.

Get yourself a good, solid team (global tracker) first.

seacaitch

I wonder why the OP is here asking questions when, as someone with most of the answers, they should probably be hosting their own investment Q&A forum. That'd give those amongst us with only a few decades experience somewhere to go to learn a few new things.

Oggers

To the last post, I cannot see anywhere where I have given answers to my own questions. Arguing around analogies perhaps - but no answers.

My response to the football analogy was in defence of my statement of maximizing fund performance. Surely possessing the best possible funds (players) will enable me to do this? Additionally, my initial post's intent was to ask for advice. Not entirely sure why folk have thus assumed that is what I have subsequently done.

The only thing I have done is to enact the advice to diversify, as per a previous post of mine, for which I am grateful for.

BananaRepublic

AnotherJoe wrote: »

Agree with that Oggers, a lot of people here throw up arms on the theory that you chose all your allocations perfectly first time round and so why change them, just rebalance.

I take the position my choices arent likely to be perfect at the time, let alone later, and it could even be, you did choose them perfectly but now the manager of such fund has decamped to run another one and the new person isn't as good.

Maybe my experience is not typical, but the very first fund I bought was Schroders UK, which after a year was clearly underperforming, so I sold and bought Jupiter European. The initial £6000 increased many fold. The mistake I made was to buy based on marketing, and not research. Since then I have done far better, although I did some years back get taken in by the tracker hype, much to my regret now. I have bought no dogs since that initial mistake with Schroders, and I have moved most of my trackers to active, which is perhaps the only real change in 20 years of investing. So if you do swap funds a lot, you might ask yourself why you bought them in the first place, and whether or not you did enough research beforehand. Some people will buy a new fund based on the strength of the fund manager's past performance. I am not in that camp, having seen several cases of subsequent underperformance. Of course rebalancing is something else, being a recognised method to avoid overweighting in one fund or sector, but it's not a technique I use.

Oggers

Banana

How did you know the initial Schroders UK fund was (truly) underperforming and not taking a temporary dip?

I don't have anywhere near the skill, experience (or luck?) as your goodself to be able to confidently say i have bought no dogs. At present, I simply don't know, hence the question. Once I have understood how to truly identify a poorly performing fund, as per yourself, I cannot see much fault with flogging it for something else - although what that something else may be is a different question.

Having digested all these useful posts I think my approach may now be summarized as follows

Rebalance - Far too UK biased initially. Now much improved as regards country and sector spread.
Allow far more time for data to accumulate before deciding what to do - if anything - with existing funds, and even then be cautious.
Understand how to identify a truly underperfoming fund - see above
Don't think about swapping funds/investment amounts on a monthly basis

ChesterDog

Those imponderables are the reason I would suggest a global index tracker should be a large part of the equity portion of a DIY investment.

In my case, it makes up roughly 20% of that part of my investments (but only 10% of my total investments - it is just a 'core').