What to progress too after passive trackers?

AnotherJoe

stphnstevey wrote: »

Those that mention no upper limit but have "core" trackers and then some active, was there not a point then that you made the decision you had reached a limit for one or the other and wanted to investigate something else?

Not for me. I started with shares and close to day trading, with anywhere from 2-10x gains to 100% wipeouts, then moved towards active funds and then a realisation that for some areas that passive is either definitely or at least arguably better, plus its simpler to manage. So for example instead of say 30 funds and keeping an eye on all those, move to 15 of which 5 are "core" trackers and the rest niche or vice versa. Whatever feels right to you.

But no concept of a "limit" at all. I could easily imagine being 100% active funds or 100% passive funds or 100% shares or a mixture, the latter which is where I am

A_T

I'm mostly in global index trackers as I don't consider myself to have an edge over the average investor on this planet.

But I do have a bit of a naughty side to me (a life without regrets is a life not lived!) and, dazzled by the recent returns from certain sectors, I have a bit of a punt in smaller companies in UK and Japan. Here I look for fund managers who have done well and are likely to know a lot more about it than I do.

ColdIron

I think all the responses have been fair, if you are looking for 'a type of product to progress too after trackers' then the suggestions you have received are pretty much what I would expect

stphnstevey wrote: »

Those that mention no upper limit but have "core" trackers and then some active, was there not a point then that you made the decision you had reached a limit for one or the other and wanted to investigate something else?

Whilst I can think of no upper monetary limit with index trackers there are some other natural limits such as gaining access to the other sectors that I mention above, that would be one reason to look elsewhere. Another might be a different objective than simple growth such as income, wealth preservation or a even reduction in volatility to a growth portfolio. A common reason to use a core and satellite strategy would be to employ active funds to outperform the markets that indexes do track, especially where it's felt that a fund manager can add value by careful stock selection in under-researched sectors such as EM, smaller companies and what about smaller EM companies?

I am not looking specifically for higher gains or into active investing. I was merely wondering whats else is there other than trackers?

However if you are not looking for higher gains and rule out actively managed funds there isn't really a lot left. You could look at smart beta or algorithm driven ETFs but this is quite a niche area and not, I suspect, what you are looking for

Quite a few assumptions made by everyone here, rightly or wrongly

Quite likely, for myself I'm unsure what you are asking or trying to pursue. Perhaps you could outline the thresholds or limitations that you think you have encountered to give everyone else a bit more to go on

bostonerimus

stphnstevey wrote: »

Wow!

Quite a few assumptions made by everyone here, rightly or wrongly.....

I am not looking specifically for higher gains or into active investing. I was merely wondering whats else is there other than trackers?

Note to self, be prepared for a backlash when you ask a question on MSE...

Those that mention no upper limit but have "core" trackers and then some active, was there not a point then that you made the decision you had reached a limit for one or the other and wanted to investigate something else?

I have mid seven figures in trackers and a little bit in one active fund that I bought years ago and keep mostly out of inertia. You can invest perfectly well just using trackers as they are incredibly diverse. If you want something else there's always property and of course you should always have some cash.

stphnstevey

ValiantSon wrote: »

Well we can only comment based on the limited information that you provided, so you should expect for assumptions to be made.



This makes no sense. You said that you had, "reached [your] limit" with passive investing, therefore, by definition, you were looking to get involved in active investing.

If you aren't looking for higher gains, then why aren't passive trackers suitable any longer? Again, your comments don't make sense.

You still haven't answered my question about how you have reached your limit with trackers.



Don't be so precious; there has been no backlash! People have questioned the assumptions that you appear to have made. I suspect that a lot of our assumptions are right, but you aren't prepared to admit the wooliness of your thinking on the subject, and have chosen indignation as a mask for your response.



Why would there be an "upper limit"? Several of us have questioned this assumption, but you still haven't given any reasons why you think there is. If you want good advice then you'll need to be much more explicit about your thinking; if we already have the extent of your thinking, then you already have your answer.

Putting aside again with the assumptions, again wrongly, again with the having a dig for no reason (MSE used to be a much nicer place. Fine)

I obviously didn't word this in a way that led to the information desired (dyslexia aside)

I have invested "what I would consider" a large amount in trackers.

I am used to diversifying and placing large amounts in a few trackers seemed against the grain to me.

Hence the "is this really the way to go?", "is there something else I am missing?", "is there something to progress too after making a core of trackers"

No, I hadn't grasped that trackers were probably the most well diversified products so a limit to investing in them is probably not needed, excuse me if I haven't reached that stage yet

Apologies if I seem to have hit on the active vs passive argument, that was not my intention. I wasn't assuming there was just passive or active, I thought there might be something else I hadn't considered, so sorry for asking the question

I am not advocating either passive or active - I was interested in what others do when they reach what they would consider a large sum in trackers, do you just continue with trackers (it seems) or d you consider anything else?

AlanP_2

I find it easier to start from the ground up:

1) Select Asset Allocation& define the timescale / objective for the "pot"

2) Choose investments that achieve (1)


They might be equity or bond trackers, they might be active funds for a sector / geography, they might be defensive or they might be more aggressive in outlook.

I have no inherent limit on what %'age should be in trackers or actives - horses for courses.

The majority is in trackers as it happens.

What are you trying to achieve, what "risk" are you trying to mitigate?

AnotherJoe

stphnstevey wrote: »

I am not advocating either passive or active - I was interested in what others do when they reach what they would consider a large sum in trackers, do you just continue with trackers (it seems) or do you consider anything else?

It wouldn't even occur to me that i had a sum that was too large "to be in trackers".

I might decide i had too large a % in (say) global or biotech or high tech and then decide where to allocate new funds or split one of those, but for each of those I'd pick a strategy such as passive for global, active for biotech, and either direct shares or a high tech fund for high tech, but I'd never think "hmm I have too much in active/passive". Not even a consideration.

Alexland

AnotherJoe wrote: »

It wouldn't even occur to me that i had a sum that was too large "to be in trackers".

Maybe if you lived for many hundreds of years and your reinvested dividends caused you to eventually own all the stock units in the entire index being passive would become a problem and in the absence of trading activity the share prices would be stuck at the price you paid for them - or the price that the most recent person who was attempting to join you in the market offered? Would you let them in at any price?

Alex

AnotherJoe

Alex,i will aspire to match your target !

DairyQueen

stphnstevey wrote: »

Putting aside again with the assumptions, again wrongly, again with the having a dig for no reason (MSE used to be a much nicer place. Fine)

I obviously didn't word this in a way that led to the information desired (dyslexia aside)

I have invested "what I would consider" a large amount in trackers.

I am used to diversifying and placing large amounts in a few trackers seemed against the grain to me.

Hence the "is this really the way to go?", "is there something else I am missing?", "is there something to progress too after making a core of trackers"

No, I hadn't grasped that trackers were probably the most well diversified products so a limit to investing in them is probably not needed, excuse me if I haven't reached that stage yet

Apologies if I seem to have hit on the active vs passive argument, that was not my intention. I wasn't assuming there was just passive or active, I thought there might be something else I hadn't considered, so sorry for asking the question

I am not advocating either passive or active - I was interested in what others do when they reach what they would consider a large sum in trackers, do you just continue with trackers (it seems) or d you consider anything else?

The forum members aren't haven't a dig at you. The experts have taken time out of their busy days in order to help you. The process of gaining knowledge includes challenging your assumptions and testing your objectives and strategy. They are putting you on-the-spot in order to catalyse you into thinking and learning. What are you investing for? Over what timescale? What is your attitude to risk? To what extent do you wish to self-manage? That kind of thing.

As has previously been mentioned this is the kind of information that is fundamental to your investment strategy, and there are many ways to implement a strategy. Plenty of experienced investors are 100% passives (hi Boston :hello:) as that is the way they have chosen to implement a strategy that meets their objectives, and it works for them. Others prefer actives, or a mix of the two. Most have refined their approach over time and with the benefit of experience and hindsight.

I have just about graduated from 'Investing 100' but have a long way to go. However, I have learned more from this forum than from any other source, and the advice you will receive here is worth its weight in gold. But if you really wish to benefit then it's best to take the forum members' challenges on the chin. Think about what questions are being asked and why. If you don't know the answers then it's a signal that there's a gap in your knowledge that needs to be addressed before you change the status quo.

To ensure you receive the best advice you first need to provide some context as nobody here currently understands why you would seek to move away from passives.

Have you researched the passives into which you currently invest? Which regions/asset types/sectors are held, and in what percentages? What are the major holdings? Why did you choose them? Are there any gaps? Do the gaps affect your strategy? Have your aims changed? Have your timescales? What are your views of where various markets are heading? Do you wish to increase/decrease risk and/or volatility? Do you just want to spice-up your portfolio a little? Do you want exposure to, say, gold or property? Do you want to increase your exposure to a specific region/sector?

The answers to these kinds of questions will help you to establish whether diversifying from 100% passives is necessary and/or advisable. You may discover that a tracker-shuffle does the job, or that actively managed funds are a better fit, or that adding this-and-that would compliment the passives in some way. Or, of course, you may discover that your current trackers are doing a great job and, if it ain't broke, don't fix it.