Investment advice for person panicking about Brexit

Terry_Towelling

Some posts (some of the more abusive ones have gone missing) seem to be saying @ruthcain1's investments are wrong. Can we really say a person's investment decisions are actually 'wrong', or should we say they appear to be ill-advised due to the level of perceived risk (given the investors needs) or that they lack diversity when different commodities/areas/regions of the market can be affected differently as a result of other things that are happening in the world?

@ruthcain1's chosen investments have given a decent return thus far. Yes, there may be other investments that have done even better and I'm sure there are plenty that have done far worse, but to suggest she was wrong and needs to learn not to make the same mistake again isn't entirely true.

She came to the Forum having realised that the path chosen may not be ideal for her and admitting that she wasn't really sure what to do. @dunstonh pointed out her investments are probably quite good given the prospect of a hard Brexit but that there are other things she should consider given her level of experience and the amount of risk she perhaps should be taking.

All she needs to do is consider her future (now looking uncertain) and decide how best to protect that, given the position she now finds herself in, and to fully understand the risks of following one path rather than another.

At the end of the day, we none of us know quite how our investments will perform (with or without Brexit in the mix) and hindsight is usually the only way of measuring whether we made an appropriate decision or not.

I hope she is still reading.

Prism

All I will add is that the performance over the last 4 years is pretty poor, especially given the risk. I know there are fees to consider but I reckons it's about 20% down on a simple tracker and also below most active global funds. Time for some more balance

Terry_Towelling

Prism wrote: »

All I will add is that the performance over the last 4 years is pretty poor, especially given the risk. I know there are fees to consider but I reckons it's about 20% down on a simple tracker and also below most active global funds. Time for some more balance

Hindsight is a wonderful thing. Can you hazard a guess at the performance of those funds over the next 4 years and say they will produce a similarly 'poor' result?

Is 38% growth particularly poor? - and we don't know what level of income she received during that time (which makes a difference).

As a matter of interest, which tracker(s) are you referring to?

brasso

dunstonh wrote: »

Every now and then we get these bizarre threads. It is a shame because the OP has not only completely misread the style of delivery but also misread the content.

.......

to @dunstonh and the other IFAs here: you are undoubtedly knowledgeable but equally, you can, I believe, be blinkered by the inbuilt cautiousness of your profession. I also suspect there's a touch of unconscious resentment that people are seeking advice on an internet forum rather than paying you for advice. And I have to tell you, just in case no one else has mentioned this over the years (;)) that your prose is unbelievably snooty at times. I know you apparently speak from a position high above the rest of us, but there's no need to be so supercilious.

The OP has asked some reasonable questions and admitted not being an expert. Her investment choices are similar to those made by many people in recent years, me included, and have done well. The IFA recommendations would, I'm sure, have been relatively conservative and returned far less. I'm not going to give detailed advice beyond that which has already been posted, principally that diversification across international markets is a decent hedge against the risks of Brexit. A drop in the value of the £ is actually not the bad news that people assume.

Regarding risk, I fully agree that share values can plummet but this is much more likely to affect individual shares. The worst experience I had as an investor was losing almost the entire value of my 2 bank stocks -- fortunately less than 5% in total of my investments -- back in 2008. Since then, I've stuck with diversified funds. My experience over about 20 years in total is that reputable funds/trackers/ETFs that cover many stocks and/or many markets are very unlikely indeed to plunge by 70% overnight. I'm sure people will produce examples of this happening, but on the rare occasions that I've started to see a decline based on fundamental market factors, I've been able to sell up and cement my gains. Interestingly, had I not sold up, and instead ridden it out or even increased my investment (advice often given but ignored by me), I would have done even better. But there you are, at my age I don't want to risk having to wait too long for fund values to recover.

I hope everyone has a pleasant evening.

aroominyork

brasso wrote: »

to @dunstonh and the other IFAs here: you are undoubtedly knowledgeable but equally, you can, I believe, be blinkered by the inbuilt cautiousness of your profession. I also suspect there's a touch of unconscious resentment that people are seeking advice on an internet forum rather than paying you for advice.

brasso, if the IFAs resented people asking for free advice on the forum, why on earth would they spend hours of their time every week giving their advice/views? Do you think the unconscious element to their resentment makes them blind to what they are doing?

dunstonh

you are undoubtedly knowledgeable but equally, you can, I believe, be blinkered by the inbuilt cautiousness of your profession.

The level of risk taken by the OP was gung ho. It is very unlikely they wanted to take that level of risk. The so-called inbuilt cautiousness exists for good reason. Inexperienced DIY investors are more likely to invest above their risk profile and capacity for loss than advised investors (or experienced DIY investors). Especially, those starting after a relatively long growth period.

Making people aware of issues and negatives does not make you cautious. That is just common sense.

I also suspect there's a touch of unconscious resentment that people are seeking advice on an internet forum rather than paying you for advice. And I have to tell you, just in case no one else has mentioned this over the years () that your prose is unbelievably snooty at times. I know you apparently speak from a position high above the rest of us, but there's no need to be so supercilious.

See what I mean about attaching fake emotion and assumptions to text.

Her investment choices are similar to those made by many people in recent years, me included, and have done well.

Just because multiple people make the same mistake does not mean it should be ignored. How do you learn anything if you prefer to remain in ignorance? Pointing out the issues allows them to learn from the mistakes and avoid them again in the future.

And it hasn't done well. The level of risk taken, it has underperformed lower risks invested more sensibly.

My experience over about 20 years in total is that reputable funds/trackers/ETFs that cover many stocks and/or many markets are very unlikely indeed to plunge by 70% overnight.

But what the OP has can "plunge" by 70%. It may be that what you have is what the OP should have been looking at. Although I doubt it as the responses given indicate that any single sector funds should be avoided and only multi-asset used.

Prism

Terry_Towelling wrote: »

Hindsight is a wonderful thing. Can you hazard a guess at the performance of those funds over the next 4 years and say they will produce a similarly 'poor' result?

Is 38% growth particularly poor? - and we don't know what level of income she received during that time (which makes a difference).

As a matter of interest, which tracker(s) are you referring to?

I think it's a good example of how an unbalanced portfolio can give poor results over any period. Compared to a balanced world tracker like fidelity world which is up 88% over 4 years or Lindsell Train GE which is one of the OPs holdings at 140%

It is interesting that the OP thinks that their results are good too

DairyQueen

brasso wrote: »

tI'm not going to give detailed advice beyond that which has already been posted,

I don't think you need to proclaim that you are 'not an IFA'. Why state the obvious?

brasso wrote: »

I've been able to sell up and cement my gains. Interestingly, had I not sold up, and instead ridden it out or even increased my investment (advice often given but ignored by me), I would have done even better.

So, you have discovered the investment holy grail? i.e. How to time the market? Perhaps you would care to share with us poor chumps when your crystal ball next signals that we should all convert to cash? I would be an avid subscriber to such a thread.

Bottom line....

I wouldn't pay an IFA (Dunston) or a solicitor (the OP) to mop my fevered brow. There's a reason Mr D is so highly regarded by this forum. Dunstan is direct and his advice is sound. That's exactly the style I like in professional advisors. Emphasis on professional.

Terry_Towelling

All good stuff that helps me to learn - I am the first to admit I'm an investing duffer, but there does appear to be a bit of a double standard in some posts. How many times do people tell us investments need to be viewed as a long-term thing - 10 years being a typical example of what is suggested. Yet here we have a thread where some posts are being openly critical after only 4 years.

Consider also a portfolio showing 38% growth in 4 years has no points of reference other than start and finish. Yes, coupled with income, that is the point of investing, but it ignores trends within the investment timescale and any long-term plan - not that OP had a clear long-term plan when buying in.

That 38% growth could be made up of 2 years of significant losses followed by 2 years of even more significant growth. What the next 6 years might bring is up for grabs but all we could really tell from that hypothetical example is that the entry timing was unfortunate. Yes, it might be reasonable to criticise entering a market after a long period of growth (as @dunstonh alluded in his most recent post) but then we get other posters quipping (in other threads) about 'time in the market vs timing the market'.

I'm not necessarily defending OP's investment decisions but I am surprised by the criticisms of some given the short timescale so far.

And finally, looking at the two examples mentioned by @prism (Fidelity world - up 88% over 4 years and Lindsell Train GE - up by 140%). If they are regarded as beacons of good growth, should any of us be buying into them now or not?

Audaxer

Terry_Towelling wrote: »

Hindsight is a wonderful thing. Can you hazard a guess at the performance of those funds over the next 4 years and say they will produce a similarly 'poor' result?

Is 38% growth particularly poor? - and we don't know what level of income she received during that time (which makes a difference).

As a matter of interest, which tracker(s) are you referring to?

A multi asset fund that is much less risky than the OP's portfolio, like for instance Vanguard LifeStrategy 80 gained 42% over the last 3 years and 64.5% over the last 5 years.