Collective Investment Account - cut my losses now?

bostonerimus

When people step outside the cozy and guaranteed world of bank saving accounts I think they are seldom psychologically prepared to live with risk or equipped to assess it rationally. Whether it's a BTL or an investment fund they both come with risk. The OP has certainly taken on some risk with her portfolio, but the property investment alternative she mentions also has risk as her capital is locked up and will lose money if house prices fall and there could be unanticipated costs of ownership and lapses in the rental income.

I think the OP probably needs to reduce the number of funds she owns and come up with a simpler portfolio, if she doesn't like the volatility in she might think about more high quality fixed income. But one thing is certain, if she sells now she will lock in her losses which is a classic investment mistake. If she has an immediate need for the money then there is an argument for doing that and, of course she might lose more if she does nothing, then again the probability is that over a 10 year period she will make some money.

I think the bottom line is "don't panic" and learn to live with risk and volatility. If you can't manage that then BTL isn't really the solution as that has risk too so you might be better with more traditional saving type accounts and National Savings.

short_butt_sweet

i wouldn't worry about the number of funds. it makes it more complicated, but so long as picking the funds is the IFA's job, that's their problem. if you wanted to pick funds yourself, then you could go for something much simpler (e.g. all in a single multi-asset fund).

the main issue is the value going down. as others have said, this is normal, and you need to get used to it.

or you could go back to savings accounts instead. they won't go down (well, not in pounds - but they may, when you allow for inflation). but then you have to accept lower returns.

Thrugelmir

20 months into a 10 year (minimum ) time horizon you are concerned about a fall in your investments value. You need to ask yourself whether this is the right place to be invested. Volatility is perfectly normal. Though not helpfull if you wish to make a timed/phased exit from same.

One aim of QE was to encourage savers/investors into putting their money into riskier assets. QE itself becalming the markets and making it appear as if making money was easy. Now the gloves are coming off. Normal service is resumed. Markets will respond to the news of the day. Not that much of the news is particularly new. As has been discussed at length for some time.

Alexland

Agree too many funds but that's not having a negative impact on your performance.

The fundamental issue is markets go up and down and you feel uncomfortable.

Have you tried talking about your thoughts with your advisor?

Alex

Always_the_realist

Thanks all. I have made an appointment with him. I am not in a mad panic about it, and I do accept losses as well as gains, it just would have been nice to have seen one small gain in the last 20 months. As a first time investor it's a little unnerving to see your investment just fall from the outset. With all the uncertainty of Brexit, which is a unique situation, I just wanted some views of experienced investors. My money was drip fed into the funds over a period of 10 months or so but I still think that I may have bought at a time when prices were high. Will that not make it longer to recover? Clearly now would be the time to buy but, although I have my 30k back, I'm a little reluctant to reinvest (although they would do this with no fee). Unless I get absolutely desperate I am going to sit tight.

oldwally

Make sure you ask him why the hell he put you in circa 2 dozen funds for 40-50K aprox.

I'd be inclined to think its so he can get circa 2 dozen lots of commission !!

Its a pity its not a couple of hundred years back,I.m sure the "Spanish Inquisition" would have had something say about this chap.............................anybody got any thumb screws ?

short_butt_sweet

oldwally wrote: »

Make sure you ask him why the hell he put you in circa 2 dozen funds for 40-50K aprox.

I'd be inclined to think its so he can get circa 2 dozen lots of commission !!

then you'd be 100% wrong. because

1) commission for financial advice has been banned since 2013. advice can only be paid for with fees which are agreed with the client.

2) that's not the arithmetic of how commission worked anyway. it was a percentage of the amount invested. and x% of £50,000 (if it all went in 1 fund) comes to the same amount as 10 times x% of £5,000 (if it's split equally among 10 funds).

oldwally

short_butt_sweet wrote: »

then you'd be 100% wrong. because

1) commission for financial advice has been banned since 2013. advice can only be paid for with fees which are agreed with the client.

2) that's not the arithmetic of how commission worked anyway. it was a percentage of the amount invested. and x% of £50,000 (if it all went in 1 fund) comes to the same amount as 10 times x% of £5,000 (if it's split equally among 10 funds).

Ok,but its still stupid to have 25 funds which spread the risk but times 25 is just plain daft and the paper work over the years would be a hell of an unnecessary burden too.

dunstonh

I'd be inclined to think its so he can get circa 2 dozen lots of commission !!

How would that work?

Commission hasnt existed since the end of 2012. However, multiple funds would not increase commission when it did exist. £10k in 10 funds or £100k into 1 fund would still generate the same.

Its a pity its not a couple of hundred years back,I.m sure the "Spanish Inquisition" would have had something say about this chap.............................anybody got any thumb screws ?

I wonder if they would have anything to say about people posting rubbish on the internet.

My money was drip fed into the funds over a period of 10 months or so but I still think that I may have bought at a time when prices were high

If you had invested on day one, you would have a higher value. Statistically, that is the method likely to result in the highest returns. Phasing is a method of reducing risk of short term drops. However, it is reliant on timing being in your favour. In your case it wasnt. it worked against you.

oldwally

dunstonh wrote: »

How would that work?

Commission hasnt existed since the end of 2012. However, multiple funds would not increase commission when it did exist. £10k in 10 funds or £100k into 1 fund would still generate the same.



I wonder if they would have anything to say about people posting rubbish on the internet.

.

Its whats known as having a sense of humor or something ,oh I see you are a I F A..........................ummmmm