Woodford Concerns

littlecub

I'm feeling so damn rotten and worthless I really dont know where to turn.

I have been watching this from a distance almost burying my head in the sand, I always do what I could to maximise my money yet making sure it was always safe. Always switching banks when the intro offer ended, subscribing to help to buy, etc I thought I was so cash savvy. The news today confirming my payout has undone all my efforts from the last 15 years 10 times over.

I know its only money and I hope I can recover, but I just feel so so guilty for being stupid, I dont know why I thought this couldn't have happened I feel like I should have foreseen it.

In the past few hours I have listed so of my prize possessions for sale (from my hobbies etc), I feel like I owe it to myself to fill the void what I have lost i'm almost crying.

I really feel for any fellow investors who are feeling like me, I hope this makes us stronger.

Do you think any of the future sales from the funds will amount to much?

bowlhead99

sg1000 wrote: »

I'm looking at an overall loss of around 50% since inception, going by the H and L figues today:
LF Equity Income Class Z Income 48.4932

LF Equity Income Class Z Accumulation 58.9936


Above is what they are saying will be the initial payouts.

If inception was 100p and the Acc class is going to make a series of capital payments during the liquidation with the first of those payments being 58.99p, it doesn't seem like you are looking at an overall loss of 50% from inception.

Likewise the income class which has already paid several pence of dividend per year and will now be paying 48.5p

I'm not disputing that the fund has done badly, nor that some investors who bought in at values in excess of the launch price may eventually lose half their money. It's yet to be seen how much more will be realised.

But on the facts, you haven't made an overall loss of 50% from inception if you invested at the price at inception and will have already received over half your money back after this capital payment and there are further capital payments to come.

SonOf

I really feel for any fellow investors who are feeling like me, I hope this makes us stronger.

On the plus side, it should only have formed a relatively small part of your portfolio. After all, it was a single sector fund designed to be held as one of many other single sector funds. It would have made up some or all of your UK equity holding. So, your US, European, Asia, Japan, Bonds, property etc allocations would be so much greater overall. So, the loss relative to your total investment shouldn't be that hard to swallow.

littlecub

SonOf wrote: »

On the plus side, it should only have formed a relatively small part of your portfolio. After all, it was a single sector fund designed to be held as one of many other single sector funds. It would have made up some or all of your UK equity holding. So, your US, European, Asia, Japan, Bonds, property etc allocations would be so much greater overall. So, the loss relative to your total investment shouldn't be that hard to swallow.

Oh yes, its all just swell thank you for reminding me.

bowlhead99

littlecub wrote: »

I have been watching this from a distance almost burying my head in the sand

littlecub wrote: »

. The news today confirming my payout has undone all my efforts from the last 15 years 10 times over.

The indicative NAV of the fund has been published every day and it was known for quite a long time that some of the assets within the NAV will take longer to be turned into cash, if at all. So, to be blunt, you shouldn't have put your head in the sand and expected to get all your initial investment back because that was never going to happen.

They are saying they will immediately pay out 74% of the most recent published value. They will make more payments over the coming years. So you have some money now and you'll likely have some more (a smaller amount) to come in the future.

In the past few hours I have listed so of my prize possessions for sale (from my hobbies etc), I feel like I owe it to myself to fill the void what I have lost i'm almost crying.

While it's not at all pleasant to realise that you've lost a bunch of money, gathering up your possessions and trying to flog them off (probably for less than they are worth to you) just seems self destructive. Don't punish yourself - it's not healthy.

Maybe your losses mean that you will have to cut back on some things you would have been buying in the future if you had eventually sold your shares in the fund in a decade's time at a nice profit instead of a loss. But investments are for the long term - presumably you had not initially bought your shares in the fund expecting to cash out your investment in the fund and use it to pay for your barest living expenses in 2020.

There is a lesson to be learned, certainly, but it seems it might be better to take a deep breath and relax, rather than rush to sell things to 'replace' the fund profits that you eventually hoped to make.

Do you think any of the future sales from the funds will amount to much?

On the face of it, the value of assets that they are not distributing as cash right now is about a third of the amount they are distributing.

So take the figure you'll be getting paid now and divide by 3, and that's probably the very most you could reasonably expect, and would be optimistic You might eventually get between 5 and 50% of that. Or you might get lucky and get more than 50% of it.

littlecub

bowlhead99 wrote: »

The indicative NAV of the fund has been published every day and it was known for quite a long time that some of the assets within the NAV will take longer to be turned into cash, if at all. So, to be blunt, you shouldn't have put your head in the sand and expected to get all your initial investment back because that was never going to happen.

They are saying they will immediately pay out 74% of the most recent published value. They will make more payments over the coming years. So you have some money now and you'll likely have some more (a smaller amount) to come in the future.


While it's not at all pleasant to realise that you've lost a bunch of money, gathering up your possessions and trying to flog them off (probably for less than they are worth to you) just seems self destructive. Don't punish yourself - it's not healthy.

Maybe your losses mean that you will have to cut back on some things you would have been buying in the future if you had eventually sold your shares in the fund in a decade's time at a nice profit instead of a loss. But investments are for the long term - presumably you had not initially bought your shares in the fund expecting to cash out your investment in the fund and use it to pay for your barest living expenses in 2020.

There is a lesson to be learned, certainly, but it seems it might be better to take a deep breath and relax, rather than rush to sell things to 'replace' the fund profits that you eventually hoped to make.


On the face of it, the value of assets that they are not distributing as cash right now is about a third of the amount they are distributing.

So take the figure you'll be getting paid now and divide by 3, and that's probably the very most you could reasonably expect, and would be optimistic You might eventually get between 5 and 50% of that. Or you might get lucky and get more than 50% of it.

Do you think any of the future sales from the funds will amount to much?

[/QUOTE]

Well I was aware I could follow the latest news since the fund was halted but really it just made me sick with worry, and please dont suggest I was expecting it all back, I never claimed that.

I feel like the gravity of it perhaps cant be understood by some people on here who are talking about multiple funds, various assets etc, this has reset me years and years.

Thank you for your kind words though, I do feel like I'm at risk of a knee jerk reaction that I will regret.

SonOf

I feel like the gravity of it perhaps cant be understood by some people on here who are talking about multiple funds, various assets etc, this has reset me years and years.

We don't know your portfolio. If you built your portfolio correctly then it shouldn't really be any more than 20-25% of your overall portfolio. So, the loss relative to your portfolio shouldn't be much more than a minor setback. Indeed, the rest of your portfolio could well have more than made up for it. It's a setback but it shouldn't be a large one costing you years.

If you built your portfolio badly. Such as investing 100% into a fund not designed for that purpose, then it would hurt. However, a large stock market crash (of the level since twice in the last 20 years) would have given a similar outcome. So, the level of loss was always possible with this fund, even though how it managed it was unexpected.

Nobody likes an event like this. However, some of the stories you read in the media do not have the full context and focus just on this fund and not the rest of the portfolio held. There was one i recall where he was saying he has lost £20k. However, it quickly brushed by the bit where it was something like 10% of his overall portfolio and the rest of it would have grown by more than his loss.

masonic

littlecub wrote: »

I feel like the gravity of it perhaps cant be understood by some people on here who are talking about multiple funds, various assets etc, this has reset me years and years.

Even those of us who are investing in multiple funds and various assets have to accept that at times we will experience significant setbacks. I've seen my investments fall in value by over 30% and that's not the worst that could happen.

Thank you for your kind words though, I do feel like I'm at risk of a knee jerk reaction that I will regret.

The other knee jerk reaction you might regret is to allow this experience to make you believe that investing is a mugs game and never take any risk with your money again. That's a common reaction of those who have invested in something they didn't fully understand, not appreciating the potential for loss. While these circumstances are very unusual, the outcome is not. This is a good opportunity to re-evaluate and make a better plan for the future.

newatc

QUOTE from Littlecub.

Well I was aware I could follow the latest news since the fund was halted but really it just made me sick with worry, and please dont suggest I was expecting it all back, I never claimed that.

I feel like the gravity of it perhaps cant be understood by some people on here who are talking about multiple funds, various assets etc, this has reset me years and years.

Thank you for your kind words though, I do feel like I'm at risk of a knee jerk reaction that I will regret.

---

Sorry for your loss. I made a significant loss back in early 2000s after following IFA's advice and it hurt greatly (though eventually won some back in compensation). I know how your feel.

The great thing about this board is there a lot of knowledgeable people on here, and I've certainly feel I've learnt a lot from the board, but don't let their expertise make you fall in to the trap of thinking you are alone in being DIY investor without a balanced portfolio (by the way my professionally advised investments referred to above, I now know were miles away from being balanced). I would guess there are many out there who have badly affected by the Woodford fiasco.

There are many threads on this board about building a portfolio which are worth reading in going forward from here. Hopefully in 10 years time the loss will be seen as a minor hiccup on your investment path.

jimjames

littlecub wrote: »

I know its only money and I hope I can recover, but I just feel so so guilty for being stupid, I dont know why I thought this couldn't have happened I feel like I should have foreseen it.

I don't think a lot of people could foresee it. I invested, I've been investing for over 25 years and still got caught out. It's only a very small part of my portfolio but it still hurts to have any loss like this but essentially you can invest the money in something else to grow. It would be little different to funds dropping in value and waiting for them to rise. The only difference this time is that the loss has been crystallised for you.