What to progress too after passive trackers?

pip895

Somewhat in support of the original question.

Many investors start out with a single passive multi asset fund and this is fine as far as it goes but as the amount of money invested and their confidence builds, many start to look to cover areas not included or not well covered by the single fund. This could be property, emerging markets or small companies. Some of these areas can be covered by adding another passive fund but others e.g. smaller companies may well be better covered using an active fund.

The smart thing to do in the great active/passive debate is to have a foot squarely in each camp!

Thrugelmir

Alexland wrote: »

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

In the US passive trackers (3 largest fund managers) control around 25% Facebook. When you do become the market, matters will become interesting. Not least who do you sell too? When the share price tanks. Liquidity will become a major issue.

justme111

OP , by the looks of it you were meant to ask " where else does it make sense to invest apart from trackers
I am not sure why you feel annoyed with the public here - all responses are trying to address the question ( apart from acrive/passive debts but that one is not offensive either(.
If you feel silly about not knowing much about the topic it is not the fault of those who respond.
In the thread which I started asking where to put the money I was advised to buy magic beans - you at least got some more useful info but I understand why I got the response I got - information is here like in every second thread and it is not much fun for other to digest it for me.. It is hard to help someone with info if it is unknown what one needs to know hence the questioning. and no mse forums did not use to be any different at least in the last 1O years.

Alexland

justme111 wrote: »

I was advised to buy magic beans

Magic beans may have a role in building a diversified portfolio as they are likely to have a low correlation to global equities - when markets are down, and we are all a bit depressed, a bit of magic providing a route to a regular supply of gold eggs could be attractive.

As a niche asset class I would keep my holdings under 5% but given the low unit cost their storage could become a problem. It would be easier if there was an ETF giving passive market exposure. There are some active magic bean traders that believe a concentrated portfolio of large green ones will hold their value better but this hasn't been proven yet in all market conditions. As they become more popular the liquidity problem should ease.

Alex

grey_gym_sock

Alexland wrote: »

Magic beans may have a role in building a diversified portfolio as they are likely to have a low correlation to global equities - when markets are down, and we are all a bit depressed, a bit of magic providing a route to a regular supply of gold eggs could be attractive.

As a niche asset class I would keep my holdings under 5% but given the low unit cost their storage could become a problem. It would be easier if there was an ETF giving passive market exposure. There are some active magic bean traders that believe a concentrated portfolio of large green ones will hold their value better but this hasn't been proven yet in all market conditions. As they become more popular the liquidity problem should ease.

you can increase liquidity by using your magic beans to make magic bean soup.

the bigger problem is that if you invest like this, you're a "has bean".

............. i'm here all week ..................