passive investing

bowlhead99

Crashy_Time wrote: »

Your information is interesting, but I believe right now a lot of money is pouring out of stocks/ETF`s/other funds?

If you cut the markets down into small enough pieces and time periods, money is always pouring out of something, generally to be put to work in something else.

Institutional money that an entity such as a pension fund or insurance company or bank or endowment fund takes out of some sort of fund or investment market, is not being removed from the market so it can be locked in a safety deposit box under the bed, or thrown in the bin. It's being removed from the market to be put into some other market.

For example if you look at net negative flows out of some European investment funds, you may see them matched by net positive flows into US investment funds, or the outflows from funds that invested actively in public markets might be replaced by inflows into funds being invested passively into public markets, or actively into private markets, commodities markets etc etc.

Crashy_Time wrote: »

Are there differing perspectives on the Japanese market/property collapse?

There are always differing perspectives on everything. It's what makes the world interesting.

Crashy_Time wrote:

I meant the Great Depression era, how many could afford to hold on when there wasn`t the same social/economic safety net that we take for granted today

If you're going to look to history for cues on potential outcomes of events, perhaps you need to correct for all the massive known differences. It is a bit flawed to say, don't look at recent major events like dot com bubble or credit crunch, look instead at what happened in the US great depression when the US was an emerging market with no real time telecommunications, no socioeconomic safety nets for the general public etc etc.

You might as well say look how dangerous the black death was before we understood what germs were or had a health service, I hope I never catch a bug or I'm going to be screwed. Or imagine if there was another great fire of London and we still made buildings out of sticks and hadn't invented the fire engine, I dare not buy property.

Crashy_Time

Nobody is saying don`t look at dot.com or 2008, well at least I`m not, I am just mentioning two examples of long term stock market declines that probably disrupted many people`s financial planning depending on how and where they were invested and how diversified they were. For everyone that still collected a pension after a certain bust there will be other people who were financially ruined?

bostonerimus

Crashy_Time wrote: »

Nobody is saying don`t look at dot.com or 2008, well at least I`m not, I am just mentioning two examples of long term stock market declines that probably disrupted many people`s financial planning depending on how and where they were invested and how diversified they were. For everyone that still collected a pension after a certain bust there will be other people who were financially ruined?

Bear markets and crashes and not good for most people's portfolios; although there will always be a few folks who guess right and make a few bucks. So the prudent investor should have and asset allocation and management strategy that will help to mitigate losses and produce a reasonable long term return. A diverse passive portfolio which is periodically rebalanced has worked for me and I bet it will work for other people too.

stphnstevey

Alexland wrote: »

If you get a S&S LISA from a DIY platform such as AJ Bell YouInvest or Hargreaves Lansdown you can buy into mixed asset funds including VLS80.

I suggest you carefully study their fee structures before opening your LISA account. For funds the AJB percentage platform fee is lower but they charge £1.50 per trade. HL have a higher percentage platform fee but no charge for fund trades.

As such AJB is more suited to investors who will make large infrequent trades and HL is more suited to small amounts, regular trades and/or holding multiple funds (not that you need to).

To make it more complicated HL have negotiated a discount which reduces the Blackrock Consensus 85 fund fee to 0.09% which makes it significantly more attractive than VLS80 at 0.22%.

You might notice that LISA platform fees are higher than the cheapest S&S ISA fees which slightly errodes the benefit of the 25% bonus.

Alex

RS fees level the playing field between AJB and H&L trading costs, as long as the equities you want are on their RS list, which I find AJB list a lot longer

Crashy_Time

bostonerimus wrote: »

Bear markets and crashes and not good for most people's portfolios; although there will always be a few folks who guess right and make a few bucks. So the prudent investor should have and asset allocation and management strategy that will help to mitigate losses and produce a reasonable long term return. A diverse passive portfolio which is periodically rebalanced has worked for me and I bet it will work for other people too.

Yes, I agree.

Fruganomics

Alexland wrote: »

1/ best way to start is to invest long term for retirement using a tax advantaged Pension and/or Lifetime ISA wrapper.
2/. . are you on target to generate sufficient retirement income . . ?
3/ . . financial objectives ?
Alex

1/ . . Pensions have bad rep for all the fees associated with them . . What are tax advantages & differences between holding a pension fund versus a 'global 100% equity fund' ? assume i only have full state pension

2/. . . I'll make do with whatever i've saved . I want to make ONE smart move now

3/ . . to save as much as possible until 64 ish, then draw down small amount annually

bostonerimus

Fruganomics wrote: »

1/ . . Pensions have bad rep for all the fees associated with them . . What are tax advantages & differences between holding a pension fund versus a 'global 100% equity fund' ? assume i only have full state pension

2/. . . I'll make do with whatever i've saved . I want to make ONE smart move now

3/ . . to save as much as possible until 64 ish, then draw down small amount annually

1)You must try to keep fees asa low as possible, but the tax deferral, tax free growth and the employer contribution are hard to beat

2) Don't try to make smart moves, just be sensible and try to avoid dumb moves.

3) Your goals are very qualitative. Try to put some numbers in your plan and come up with a saving rate. You should be using pensions, SIPPS and ISAs etc as they give tax advantages.

dunstonh

1/ . . Pensions have bad rep for all the fees associated with them

Not for many years they havent.

What are tax advantages & differences between holding a pension fund versus a 'global 100% equity fund' ? assume i only have full state pension

That is a bit like saying what are the differences between buying petrol or a car. A pension is a tax wrapper that costs no more than ISAs or unwrapped. It can hold the same investments too at the same cost.

Thrugelmir

Crashy_Time wrote: »

Are there differing perspectives on the Japanese market/property collapse?

Banks were being encouraged to lend by the BOJ to stimulate economic growth. The loose fiscal policy resulted in a credit bubble of inflated asset prices. When the bubble burst. The security and investments the banks held, i.e. company stocks , fell in value. Resulting in an exacerbated downward spiral. The banks themselves being forced to offload stock in a declining market.

QE was an attempt to avoid Japan's malaise which has continued for decades. Whether the outcome will be better we'll know in the coming years ahead. Though China now has a huge influence on world trade, commodity prices etc than was the case 30 years ago.

EdGasketTheSecond

Is passive investing leaving your money in a low-interest paying account for years or buying shares like Carillion and tucking away in a bottom drawer to find years later they have gone bust or buying a Nikkei Index tracker in 1990 and finding out 30 years later that you lost half your money? If so, it doesn't seem a very good idea.