Damien Fahy's 80-20 Investor - thoughts?

AnotherJoe

Davidooo said:

I was surprised to see all the adverse comments about Damien Fahy's 80-20 Investor. Three years ago I decided to move money from my cash ISA into a Stocks and shares ISA and after some investigation chose Charles Stanley as my platform. But I then got stuck with how to go about choosing funds to invest in. I have no interest in regularly spending time researching investments so I was pleased to discover the 80-20 Investor that I thought looked good and I decided it was worth trying the free trial. At the end of the free trial, I was happy then to go on and subscribe and have been doing so for the last three years or so.

During that time, I have followed Damien's lead in what funds to invest in and it has been very profitable. And I believe Damien is a genuine person who is certainly not a "Prince Monolulu" as mentioned in a previous post!

Damien gives regular updates on what funds he is buying or selling with a full and detailed explanation as to his reasoning and I just mirror his portfolio.

I should mention that I have also been very pleased with Charles Stanley. There are no charges for switching funds, they are cheaper than Hargreaves Lansdown and they are very helpful whenever I have needed to phone them.

Nothing personal, but you put me in mind of a typical SJP client, happy with your performance because you arent aware how poorly you've done comparatively, and paid for the privilege  as well !

moneyfoolish

I have never held any investments since the technology crash in 2000 which told me I didn't have the temperament for losses. Since then all my savings have been in cash isas, national savings bonds, regular savers and interest paying current accounts. However, the rates for most of these things are now so poor that I am contemplating moving a portion of my funds into a not too adventurous fund. I've been following this board for a good few years and the type of funds previously suggested that would interest me are the VLS, HSBC or L&G funds which have been mentioned many times. However, I've looked at Trustnet with reference to the VLS funds and have noticed that the funds which have consistently been the best performers over 1, 3 and 5 year periods have been the Royal London Sustainable Funds. In the categories which I am looking at (Mixed Investment 0-33% shares and 20-60% shares), The Royal London Sustainable Managed Growth Trust Acc and  Diversified Trust C Inc have outperformed the VLS 20 and 40 in almost every period with albeit with higher risk levels. I have noticed that the Royal London equity portion funds have individual company shares instead of the index funds in the VSL funds. Are the reason these funds don't seem to be mentioned very often because they are higher risk or because the cost of holding them is much higher?

Malthusian

@moneyfoolish You may want to ask the Board Guides to move this to a new thread as it has nothing to do with Damien Fahy.

Investing in the Royal London Sustainable Managed Growth Trust for your entire portfolio would be very high risk. It invests mainly in Sterling-denominated bonds so you would be vulnerable to a fall in Sterling and vulnerable to future interest rate rises. The current yield is 2% so without increases in bond values (not something to rely on given low interest rates) you will be losing money in real terms.

The Diversified Trust has a better balance (57% in equities, 40% in bonds) but is not as diversified as the funds you mention - no exposure to the Pacific, Japan or emerging markets.

Both funds cost nearly three times as much as Vanguard funds and there is no evidence that any fund manager can consistently beat the market.

moneyfoolish

Malthusian said:

@moneyfoolish You may want to ask the Board Guides to move this to a new thread as it has nothing to do with Damien Fahy.

Investing in the Royal London Sustainable Managed Growth Trust for your entire portfolio would be very high risk. It invests mainly in Sterling-denominated bonds so you would be vulnerable to a fall in Sterling and vulnerable to future interest rate rises. The current yield is 2% so without increases in bond values (not something to rely on given low interest rates) you will be losing money in real terms.

The Diversified Trust has a better balance (57% in equities, 40% in bonds) but is not as diversified as the funds you mention - no exposure to the Pacific, Japan or emerging markets.

Both funds cost nearly three times as much as Vanguard funds and there is no evidence that any fund manager can consistently beat the market.

Many thanks for the reply. The fact that it isn't as diversified and the costs are much higher than the VLS funds tells me all I need to know.

Davidooo

Following my post supporting Damien Fahy, I took the responses on board and genuinely wondered if I would be better off using Vanguard Lifestrategy. So, I crunched a few numbers and came up with some actual facts. I looked at the three year period from January 2017 to January 2020, so excluding the Brexit vote (during which I did very well) and also before COVID-19 hit.

I compared my increase in portfolio value, minus Damien fees, with Vanguard Lifestrategy 60% Equity Fund. I think this gives a little bit of benefit to Vanguard because the Damien portfolio generally hovers around 60% but it has been as low as 28%.

My results show that I have done slightly better than if I had put my money into the Vanguard Lifestrategy 60% Equity Fund. But note also that for more than a year of that three year period, I had personal issues that meant spending time switching funds was not high on my list of priorities. So I had hung on to some funds that Damien had ditched and I lost quite a lot of money on those funds through not following Damien's recommendations.

So, I have to conclude that I have done OK by subscribing to the 80-20 Investor but I could have done better if I had followed Damien's recommendations more closely. I must also conclude that Vanguard Lifestrategy would not have given me larger returns.

RyanHello

You're being hustled OP. These investment "gurus" are nothing more than conmen. Stay away from them. 
Be patient, use common sense and invest in long term low risk funds. 

doe808

Davidooo said:

Following my post supporting Damien Fahy, I took the responses on board and genuinely wondered if I would be better off using Vanguard Lifestrategy. So, I crunched a few numbers and came up with some actual facts. I looked at the three year period from January 2017 to January 2020, so excluding the Brexit vote (during which I did very well) and also before COVID-19 hit.

I compared my increase in portfolio value, minus Damien fees, with Vanguard Lifestrategy 60% Equity Fund. I think this gives a little bit of benefit to Vanguard because the Damien portfolio generally hovers around 60% but it has been as low as 28%.

My results show that I have done slightly better than if I had put my money into the Vanguard Lifestrategy 60% Equity Fund. But note also that for more than a year of that three year period, I had personal issues that meant spending time switching funds was not high on my list of priorities. So I had hung on to some funds that Damien had ditched and I lost quite a lot of money on those funds through not following Damien's recommendations.

So, I have to conclude that I have done OK by subscribing to the 80-20 Investor but I could have done better if I had followed Damien's recommendations more closely. I must also conclude that Vanguard Lifestrategy would not have given me larger returns.

HI Damien. Hope you are keeping well.

Kind regards. d.

Davidooo

Looks like some people have prejudices that can't be overcome with facts. And just for the record, I have no allegiance to Damien and if I thought I could do better elsewhere I wouldn't hesitate to switch. It's clearly pointless trying to have a sensible discussion on a forum such as this. I should have known better!

Prism

Davidooo said:

Looks like some people have prejudices that can't be overcome with facts. And just for the record, I have no allegiance to Damien and if I thought I could do better elsewhere I wouldn't hesitate to switch. It's clearly pointless trying to have a sensible discussion on a forum such as this. I should have known better!

None of us are subscribed to 80-20 Investor so we can't say what returns we would have got by using his methods. What we can see are the published example returns over 1, 3 and 5 years which are 1.18%, 8.47% and 32.54% as of today. So on paper at least these returns don't look all that special and as a comparison under perform both VLS 60 and VLS 40 by a few % across all those time periods. For something that is supposed to look for the best funds to invest in I would expect it do do a little better than that. I certainly believe its not a pointless task to try and get index beating returns by choosing good funds but surely its got to then actually beat the index, especially over longer time frames, or else what is the point.

I would say a good return over the last 3 years would be 60% (not 8.47%) and 5 years around 100%.

Davidooo

Prism said:

Davidooo said:

Looks like some people have prejudices that can't be overcome with facts. And just for the record, I have no allegiance to Damien and if I thought I could do better elsewhere I wouldn't hesitate to switch. It's clearly pointless trying to have a sensible discussion on a forum such as this. I should have known better!

None of us are subscribed to 80-20 Investor so we can't say what returns we would have got by using his methods. What we can see are the published example returns over 1, 3 and 5 years which are 1.18%, 8.47% and 32.54% as of today. So on paper at least these returns don't look all that special and as a comparison under perform both VLS 60 and VLS 40 by a few % across all those time periods. For something that is supposed to look for the best funds to invest in I would expect it do do a little better than that. I certainly believe its not a pointless task to try and get index beating returns by choosing good funds but surely its got to then actually beat the index, especially over longer time frames, or else what is the point.

I would say a good return over the last 3 years would be 60% (not 8.47%) and 5 years around 100%.

Thank you Prism for a sensible response. Can I clarify, though: in your last sentence I assume you are saying 60% return over 3 years (i.e. 20% p.a.) while the 8.47% is per annum. In which case, are you saying I should be able to get 20% p.a.? If my calcs are correct for the period I looked at, I would have got a return of 7.0% p.a. with VLS 60%. Have I got that wrong?

Also, surely the only way I could have got a return of 20% p.a. would have been by investing in much higher risk funds. Is that correct?

I genuinely want to get to the bottom of this so that I can decide if I should stay with Damien or not.