Don't buy index trackers.........for my sake

Pincher

You can always go half passive, and half active, of course.

Or, half in property, and half not in property, etc.

I should probably be bi-sexual as well, just to double my chances of getting laid, but I really don't want to. :eek:

Hmm, what would be the equivalent of a threesome be? Passive equity, Active equity, with a slice of Bonds sandwiched in between? Let's call that a Pincher Sandwich.

bostonerimus

Pincher wrote: »

You can always go half passive, and half active, of course.

This isn't far from lots of Bogleheads in the US......they own the active Wellesley Income or Wellington fund.s I have about 10% of my portfolio in Wellesley. It was a default balanced fund option in my retirement account. I've kept it for 20 years out of inertia, sentiment and because it does throw off nice dividends.

badger09

bostonerimus wrote: »

This isn't far from lots of Bogleheads in the US......they own the active Wellesley Income or Wellington fund.s I have about 10% of my portfolio in Wellesley. It was a default balanced fund option in my retirement account. I've kept it for 20 years out of inertia, sentiment and because it does throw off nice dividends.

Now that is passive investing;)

darkidoe

MPN wrote: »

username12345678 wrote: »

Why then wouldn't you want to spread your money across the whole investment 'universe' in equities/bonds/property etc?
Any other method of investing is akin to claiming you have some insight that tens of millions of other financial experts and amateur investors don't have - can you really claim that?/QUOTE]

I myself prefer to keep a very good cash reserve in case of a downturn/crash which is spread over the best savings accounts and regular savers instead of investing in bonds and property. Therefore my investment portfolio is now 100% equity which I realise will not be suitable for most people.

I have a similar notion as well. However my cash reserve in portion to my entire portfolio is relatively huge 1/3 i estimate. I suppose the way I think about it is that I ring-fence the equity portion and disregard the cash from the portfolio altogether. Over time with drip feeding over the years and the cash reserve amount staying relatively the same in view of my expenditure, the equity portion will rise in proportion. Takes ages tho.

bostonerimus

1/3rd in cash is a lot of the portfolio to allow inflation to erode. Of course the absolute figure is more important than the proportion of the portfolio. I've keep around a years spending in cash regardless of the size of my portfolio. I went up to two years while I was bridging the gap between early retirement and my pension starting. I'm around 1% cash now.

username12345678

Pincher wrote: »

You can always go half passive, and half active, of course.

Or, half in property, and half not in property, etc.

This is where i'm headed and seems like a pragmatic approach to investing.

Where active does not add value (US large-cap for example) then i'll use a tracker. In more niche areas where there is long term active out performance of funds/IT's then i'll use those.

The effort at the moment is the research in to historical returns of different asset allocations appropriate to my risk tolerance, then the appropriate geographical spread then the right funds/IT's/trackers to get the exposure.

fun4everyone

username12345678 wrote: »

Where active does not add value (US large-cap for example) then i'll use a tracker. In more niche areas where there is long term active out performance of funds/IT's then i'll use those.

Is the correct answer for UK investors. Yet it seems so hard for people to realise. I think the amount of biased webpages, books and research is to blame for such entrenched views.

You also have to keep an eye on active funds in case of management changes etc so for those unwilling to do that using more passive funds might be suitable.

I blame the vast amount of terrible active funds which are really closet trackers with high fees that exploit those who do not research investments for the current state of things when it comes to these arguments. I also blame advisors who sold these funds due to commission and kickbacks.

Everyone should be willing to learn from people who know more than them and are willing to share it on forums like these. There is always someone who has greater understanding and It's a bad trait to assume you know more than anyone else about anything. Personal situations come into play in all sorts of way with investing also, and its impossible to know about someone elses situation.

bostonerimus

fun4everyone wrote: »

Everyone should be willing to learn from people who know more than them and are willing to share it on forums like these. There is always someone who has greater understanding and It's a bad trait to assume you know more than anyone else about anything. Personal situations come into play in all sorts of way with investing also, and its impossible to know about someone elses situation.

I decided I could never know enough about individual stocks or an active funds to pick them with any degree of confidence. Personal circumstances and preferences are the foundation of a portfolio and it's good to share experiences. I'm glad when I hear that people succeed in active investing, but it would be more informative to hear from those that fail and understand why they failed.

Malthusian

fun4everyone wrote: »

I blame the vast amount of terrible active funds which are really closet trackers with high fees that exploit those who do not research investments for the current state of things when it comes to these arguments.

Closet trackers aren't terrible, they're just slightly below average - you get the same return as an out-and-proud tracker minus 0.5% per annum. It's the funds that lose you money through some extremely clever alpha-tastic strategy that are terrible.

I also blame advisors who sold these funds due to commission and kickbacks.

Closet trackers paid the same commission as the gold-rated five-crown AAA supergenius star manager funds. So why did advisers recommend the closet trackers instead of the supergenius funds? Either laziness or just bad luck.

Linton

fun4everyone wrote: »

.....

I blame the vast amount of terrible active funds which are really closet trackers with high fees that exploit those who do not research investments for the current state of things when it comes to these arguments. I also blame advisors who sold these funds due to commission and kickbacks.

.....

If it's true that all active funds underperform trackers then a closet tracker can hardly be a "terrible active fund". Surely with a performance of perhaps only a fraction of a % below the index a closet tracker must be one of the best active funds. The advisors who sold them should be praised for their insight.