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Don't buy index trackers.........for my sake
Comments
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Theoretical question, then... if your granny bought shares (for sake of argument let's say in Unilever or Shell, rather than ICI and Burmah!) in 1957 and has held them for 60 years, quietly collecting the dividends and never even considering the share price or thinking about selling...
Are we saying she is an active investor?
Is granny a looker, or have I missed the gist of this thread.0 -
Theoretical question, then... if your granny bought shares (for sake of argument let's say in Unilever or Shell, rather than ICI and Burmah!) in 1957 and has held them for 60 years, quietly collecting the dividends and never even considering the share price or thinking about selling...
Are we saying she is an active investor?
No, she's a passive investor in particular stocks.........a passive indexer buys the whole market.
Of course, very few people are entirely passive. They will reinvest or decide to take income, rebalance between equities and fixed income (although the benefits of that are debated) and probably adjust their asset allocation with changing circumstances. However, they are low frequency traders and ignore short term market volatility“So we beat on, boats against the current, borne back ceaselessly into the past.”0 -
Why would you want to put 3 times as much money into Tesco than either of Sainsbury's or Morrisons? .
Thats like saying why would you put 3 times as much money into a company with 3 supermarkets than you would a company with only one supermarket.
To get an equal share in each.
“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair0 -
Theoretical question, then... if your granny bought shares (for sake of argument let's say in Unilever or Shell, rather than ICI and Burmah!) in 1957 and has held them for 60 years, quietly collecting the dividends and never even considering the share price or thinking about selling...
Are we saying she is an active investor?
What about the 22 constituents of the index at the time, that are no more. Randomly selecting shares is little more than gambling. The odds of beating the "market" vary considerably. Depending on the region or sector.0 -
bostonerimus wrote: »As a long time investor in index trackers I've benefited from all the active investors and managers setting a market for me to average. But what if everyone was just buying the index, how would the market function....well it wouldn't. So for my sake please go out and spend your money on active investing so that my strategy will continue to work. Of course that's a bit hyperbolic, but if you are indexing it's good to realize without active trading we wouldn't be able to successfully index.
http://www.marketwatch.com/story/john-bogle-has-a-warning-for-index-fund-investors-2017-06-01
http://www.morningstar.com/cover/videocenter.aspx?id=768505
OK, so for all of us fools what have you been tracking and for how long.
No cheating play fair, and what steered you toward the particular trackers you invested in.
If it was the FTSE 100 here is my coin give me my issue.0 -
I live in the USA so my asset allocation wouldn't be right for someone in the UK. 30 years ago my asset allocation was 60% US equity (Russel 3000) and 40% in a US bond index. As I've got older I've added some international equities so now I'm basically 50% US equity, 20% total international tracker (ex USA) and 30% US bonds tracker. I've stopped rebalancing and because I'm retired with sources of guaranteed income I can take on a lot if risk. I've tracked my return over the last 30 years and the average is 8% per year.
I just chose a "lazy portfolio" of broad indexes. A criticism might be my relative lack of small and mid cap funds as I am market cap weighted.....but others would say that's a good thing.
Here are the basic funds
https://personal.vanguard.com/us/funds/snapshot?FundId=0585&FundIntExt=INT
https://personal.vanguard.com/us/funds/snapshot?FundIntExt=INT&FundId=0569
https://personal.vanguard.com/us/funds/snapshot?FundIntExt=INT&FundId=0584“So we beat on, boats against the current, borne back ceaselessly into the past.”0 -
Granny is a lover of white knuckle rides.0
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Thrugelmir wrote: »What about the 22 constituents of the index at the time, that are no more. Randomly selecting shares is little more than gambling. The odds of beating the "market" vary considerably. Depending on the region or sector.
Absolutely...I did mention the Burmah shares!
But Granny had no reason to care about "beating the market", she just needed to preserve long-term capital value and get a regular income from the investments.
I'm just a bit intrigued by how "prudent investment" has become "reckless gambling" in the space of two generations.
Obviously, the FT100 didn't exist in the 50s and it would be mid 70s before the first tracker came along, but has there been any real change in the riskiness of individual company shares? Or are we only talking relative risk between collective investments and self-selection?0 -
Just wait till the next big market crash and all these passive investors, especially the Loyal Vanguard in this forum, will get the shock of their lives. I'm quietly confident my 6 active funds in my portfolio won't drop as much as the passive funds.0
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