i would like to know your downturn risk

ramborai1987

hi guys. i've been on this forum for quite a few months now and ive noticed there is alot of us that take the oppurtunity to invest in funds.

i was just wondering what everyone accepts as there downturn risk when investing in funds for the long term with a diversified portfolio.

me, i would say my downturn risk is 10%. willing to take a small risk to make a good 9 - 12% each year i'm happy with that.


i have created a poll just for research purposes to see how other people tend to play their risk when investing in funds. i would like to see what the general concensus is of people on this forum. Thanks!

Aegis

I have a pretty high-risk portfolio with exposure to China, Latin America, Russia, smaller companies, etc, so I reckon my risk is quite high from those. I also have a reasonable amount in UK equities and some in bonds, which undoubtedly mitigates that risk a little. Then I have my cash savings, which I'm not going to include in this estimate because you asked for downturn risk on fund investments.

All in all, I wouldn't be surprised if my portfolio dropped 30-40% in a bad year, though I would obviously hope the safer investments would ensure that this didn't happen!

robp

20% downturn. having more in emerging, willing to risk

I try to do a basic analysis of what I need, but am happy to admit that I'm an amateur.

Every so often I run my SIPP and ISA portfolios through the Best Invest Portfolio Analyser to see what it recommends.

At the moment my SIPP is short of UK Small Cap and Bonds, so my next investment will likely be Old Mutual Small Companies, then I'll look at Bonds next month.

ISA is fully invested this year and has quite a bit of exposure to natural resources and Asia, so may try to tone it down a bit come April.

The analyser reckons I have a probability of 30% of a decline in my portfolio in one year and a 7% chance of a 20% or more drop in one year.

ramborai1987

10% downturn. playing fairly safe, small risk

bump .

purch

10% downturn. playing fairly safe, small risk

I'd like to answer the Poll Q but there isn't one that fits.

It depends on the Fund or the individual investment.

For some of them 10% is too much downside risk to take, for others 20 or 30% is about right.

I hope I have hedged out much of the downside risk currently, so as a whole if it started to show losses of 10/15% I'd be worried about my strategy and techniques.

P.S. I did option 1 in the end !!!