So how was that (financial) year for you?

Wassa123

Absolutely terrible!

bundly

I've got all my savings in Hargreaves Lansdowne, in stocks and shares ISA and a fund and share account for money left over after I used up my ISA limit.

The funds in the stocks and shares ISA were all chosen for me by my ex. He has decades of experience as an investor and is obsessed with making his millions make money, so he spends many hours every month "studying form" before carefully selecting which funds to invest in.

After I dumped his sorry !!! (for horrendous cheating) a year ago I was left alone and utterly clueless about investments. So for my fund and share account I just picked random funds from the Wealth 150 list.

At the end of the year, the funds my money-expert ex chose brought me 13% overall and the ones ignorant little me chose at random have made 17%.

So yeah, not only a good year financially but learned that I don't need him and his expertise, after all!

bowlhead99

bundly wrote: »

At the end of the year, the funds my money-expert ex chose brought me 13% overall and the ones ignorant little me chose at random have made 17%.

So yeah, not only a good year financially but learned that I don't need him and his expertise, after all!

Much as though I would like to be supportive and cheer, "Yeah! You go girl!!... you know the collection of funds you selected could crash in value by 50% over the course of a year or two, right?

If he has been investing for decades, you can be sure he does.

I hope you aren't surprised when they do, as if so, that could be quite a dis-empowering moment.

bundly

bowlhead99 wrote: »

Much as though I would like to be supportive and cheer, "Yeah! You go girl!!... you know the collection of funds you selected could crash in value by 50% over the course of a year or two, right?

If he has been investing for decades, you can be sure he does.

I hope you aren't surprised when they do, as if so, that could be quite a dis-empowering moment.

So what do you suggest I do, then?

[Deleted User]

bowlhead99 wrote: »

Much as though I would like to be supportive and cheer, "Yeah! You go girl!!... you know the collection of funds you selected could crash in value by 50% over the course of a year or two, right?

If he has been investing for decades, you can be sure he does.

I hope you aren't surprised when they do, as if so, that could be quite a dis-empowering moment.

I'm sure Bundly is well aware of this. But thanks for pointing out the bleeding obvious in your mean-spirited little post

TBC15

bundly wrote: »

I've got all my savings in Hargreaves Lansdowne, in stocks and shares ISA and a fund and share account for money left over after I used up my ISA limit.

The funds in the stocks and shares ISA were all chosen for me by my ex. He has decades of experience as an investor and is obsessed with making his millions make money, so he spends many hours every month "studying form" before carefully selecting which funds to invest in.

After I dumped his sorry !!! (for horrendous cheating) a year ago I was left alone and utterly clueless about investments. So for my fund and share account I just picked random funds from the Wealth 150 list.

At the end of the year, the funds my money-expert ex chose brought me 13% overall and the ones ignorant little me chose at random have made 17%.

So yeah, not only a good year financially but learned that I don't need him and his expertise, after all!

Outstanding. Keep up the good work.

Prism

bundly wrote: »

So what do you suggest I do, then?

Most people with a balanced set of funds didn't make anywhere near that last year. So I would assume your allocation is a little risky. There is no harm in that, however you may find that your funds are very volatile. If you can live with that and you feel your funds are pretty balanced then do nothing.

As a reference, only 91 out of about 3300 OEIC funds made 17% or more in the last year

Lungboy

Deleted_User wrote: »

I'm sure Bundly is well aware of this. But thanks for pointing out the bleeding obvious in your mean-spirited little post

It wasn't mean spirited and an awful lot of people aren't well aware of how quickly things can change.

eskbanker

bundly wrote: »

I've got all my savings in Hargreaves Lansdowne, in stocks and shares ISA and a fund and share account for money left over after I used up my ISA limit.

Do you mean that literally, i.e. that you don't have any cash savings?

bowlhead99

Deleted_User wrote: »

I'm sure Bundly is well aware of this. But thanks for pointing out the bleeding obvious in your mean-spirited little post

Bundly was on here before this financial year began, posting about whether it might make sense to pay someone for professional advice. She had a modest income and £100k to last the rest of her days, and felt "like I have just done random things without knowing what the hell I am doing".

There were some useful posts about how she could get some advice from an IFA. One pertinent comment was to the effect of, you could buy advice to protect you from making mistakes, or you could learn to DIY, but if you were wanting to learn to eventually DIY well, then working with an IFA for a couple of years could take years off that learning curve, and you probably wouldn't be wanting to try to figure it all out by yourself with £100k at risk.

However, in the end she didn't get advice, still didn't know what she was doing, kept the shares or funds picked by her ex without knowing much about them, and added to them by picking random funds off the marketing list of a company she had an ISA with. Fortunately, the high risk funds she selected happened to give her a good result in this particular year.

Her conclusion (though perhaps she smiled as she wrote it, tongue in cheek), is that she has learned that she doesn't need anyone's advice, especially after her picks 'beat' (over the very short term of just one year) the selections of someone who claimed to know what they were doing.

I have a few observations, as I always do.

Firstly the outperformance does not mean you have stumbled on some holy grail and don't need anyone's guidance. We know that really it is just luck.

Indeed, most here do not have 13% return for the tax year just ended unless they have deliberately gone for higher risk funds. So to get 17% by happy accident is a combination of relatively high risk and luck. The person getting the 13% knows that the funds they used to get there, were of the higher risk, equity-heavy or speculative type, that could produce substantial losses in a downturn, at least on paper. Whereas the person who picked names out of a hat - perhaps biased to whether the funds had gone up in value a lot recently - may not have an appreciation that those funds may now lose 50% over the next couple of years instead.

And perhaps the funds that delivered the 17% were even higher risk than the ones that delivered the 13%, such that the 13% ones might end up being more suitable over the long term for an investor who is relatively less experienced with the mechanics and the pitfalls of investment generally.

To jump on board with words of encouragement, saying well done, keep doing what you're doing, you really showed them, etc, is a friendly and well meaning thing to do. It's nice to be emotionally supportive. To do otherwise, may appear mean spirited.

However, the killer observation is that if you wanted to be REALLY mean spirited, then by congratulating someone and telling them that they clearly know what they are doing based on their short term performance, and will be fine if they just keep picking high risk funds out of a hat, giving them that false sense of security, is a move that may leave them absolutely distraught when it all unravels and the emperor is wearing no clothes. You can really screw someone over by telling them they deserved the result they got, they don't need help, and by failing to point out the pitfalls which are obvious to you but may not have been recognised by them.

bundly wrote: »

So what do you suggest I do, then?

Do some more research on the funds you purchased and what sort of losses they could produce when markets are less favourable. Do some reading up on Investments generally through books and blogs. Enquire here when you have questions. Consult with an independent professional (IFA) who can assist you in understanding the investments you hold and putting together a more suitable portfolio for your needs.

Be realistic, and don't make the mistake of thinking that because you have a portfolio that delivered 17% in a good year (which would be more than suitable for your needs if it were to happen every year), it is likely to give you that in a normal long term average year or in a mildly bad or very bad year.