switch out of your property investment fund

[Deleted User]

The last ones out will lose the most, leave early and buy back in 3-5 years when it hits the bargain basement after teh panic is over IMO

You have to time the economy, get in when the wind is against it but the fundermentals are good, get out when the fundermentals are out of the window and bull insanity takes over.

Ring a ring a roses, a pocket full of loans, a subprime a self-cert it ALL FALLS DOWN!!!

munk

Mmm... so now isn't a good time to be building up a 10% weighting of property funds then in a new cautious to balanced portfolio?

I'm was planning on splitting a 10% property weighting evenly between New Star UK Property (commercial property) and SWIP Property trust and have been drip feeding in for last 3 months and had planned to continue with this over next 3 months also.

New Star is 60:40 (ish) bricks/mortar:property shares whereas SWIP is 100% bricks/mortar. Interestingly the New Star fund has dropped only slightly over 3 months (4-5%) whereas the SWIP fund has dropped more significantly by around 10% - predictable perhaps given the state of the property market right now, I guess the property share part of the new star fund is the only thing buoying it up slightly.

So is it worth continuing to drip feed in money to the property funds or look elsewhere for diversity? If I'd been invested for the last few years in property funds I'd be looking to move money well away from it now to 'cream off' the profits from the booming markets of last few years... but unfortunately I'm only just starting out in last few months. Worth continuing drip feeding or wait until there's more 'value' in them thar hills so to speak

If not drip feeding into property then I'm not sure... more exposure to bond funds perhaps? This is for a cautious to balanced/mid risk portfolio that's already at around 60% equities and around 6% volatility so I want to be bringing equity exposure down by another 10% or so ideally.

Cheers.

edit ... just read your post about gold on teh forum yant1 This portfolio has a 1% weighting of gold and tbh when I introduced that a month or two back it felt like I'd got in too late so not sure about increasing that at all (plus the volatility is nuts for this portfolio to have more than 1-2% weighting of gold). Agree with your other ideas on that thread also about US markets being poor... also overweight in this portfolio with US at around 6% IMO.

[Deleted User]

Property is good in the long term, but can be very bad in the short term.

If you absolutely must have a portfolio with a certain percentage in property then wait at least a year or two until all the bad news and credit problems are out the way. Reassess the situation in the end of October 2008.

dunstonh

Mmm... so now isn't a good time to be building up a 10% weighting of property funds then in a new cautious to balanced portfolio?

Had you invested on 2nd July, you would be 9.17% down on the SWIP Property fund and 9.26% down on New Star. However, they have followed very different lines. I bet you that SWIP will move back up in pricing within 10 days and recover 5% of that.

Now, you have to decide if the drop that has occured in property has now more realistically priced it or is there more drops likely. There is a mixed opinion on that.

It is worth noting that a stockmarket correct/crash can knock around 45% off the value of your holding. You arent likely to see anything like that on a property fund. A lot of the coverage from those saying property has still to drop more are suggesting figures of 10%. So, even if we work on that basis that is still less than a the recent August correction on the markets and a possible longer term correction. So, its good for a bit of defensive protection even if the short term potential isnt great. (reference: L&G index tracker lost 13.09% in the Aug correction)

munk

Had you invested on 2nd July, you would be 9.17% down on the SWIP Property fund and 9.26% down on New Star. However, they have followed very different lines. I bet you that SWIP will move back up in pricing within 10 days and recover 5% of that.

The SWIP fund jumped back up by 6% today - I've seen this constantly on both property funds (noticeable if you look at the charts) and presumed it was to do with sales of physical properties within the portfolios, is this right?

I take yant's comments about staying clear of property for a while (though not sure about 1 whole year though), but I think I'll go ahead and drip feed in this 10% over at least another 6 months or so.

Cheers guys.

dipsomaniac

munk wrote: »

The SWIP fund jumped back up by 6% today - I've seen this constantly on both property funds (noticeable if you look at the charts) and presumed it was to do with sales of physical properties within the portfolios, is this right?

the large daily movement will be due to the pricing basis of the fund moving from a cancellation (more sellers than buyers) to an offer (more buyers than sellers) basis - vica versa.

dunstonh

Damn, there goes my bet. SWIP are quick to drop and quick to rise when needed. Didnt expect it that quick though! Others are slower.

I think the best three at the moment are L&G, M&G and SWIP. NU is interesting as it is undergoing a change of strategy with a new fund manager. There is logic in what he has been saying (dumping properties where gains have been made but may no longer be optimal to hold and look for better options rather than the old buy and hold anything that comes their way). Time will tell one way or the other.

[Deleted User]

munk wrote: »

edit ... just read your post about gold on teh forum yant1 This portfolio has a 1% weighting of gold and tbh when I introduced that a month or two back it felt like I'd got in too late so not sure about increasing that at all (plus the volatility is nuts for this portfolio to have more than 1-2% weighting of gold). Agree with your other ideas on that thread also about US markets being poor... also overweight in this portfolio with US at around 6% IMO.

Ultimately you go with what you believe in, but as i made out on the other thread I believe commodities eg metals, oil and gas will prove a lot stronger then property will over the next 3 years. Finding the right investments is a will prove more of a minefield then the shooting fish in the barrel you could get away with back in 1996. But as the greats always say, there is always a bull market you just need to find it. I expect property in bulgaria, cyprus and lithunania will fair better then spain, uk etc.

Although I said emerging markets are good there are bubbles forming in them, eg petrochina, chinamobile. One good tip is look at the top ten investments of funds and see if you agree with them/appraise the companies. To avoid the minefield and yet stay in the best market ie emerging ones id look for funds that aim to be more value and fundamentals based.

One last thing... Happy hunting. :beer:

rainy_dave

Agree with dunstonh, NU is a very interesting prospect to monitor. I will follow the "bedding-in" of their new fund manager with interest.

Joey122

I ve decided to put my 4k allowance in this fund :

Neptune Global Equity Accumulation - Should be the place to be!