Woodford Concerns

fun4everyone

Uxb1 wrote: »

Not in Japan it doesn't.
The Nikkei index has never yet (by a long way) regained its peak of 37000 reached in the asset price bubble of 1990.

That's true, but it is an example of single sector investing which is bordering on gambling coupled with choosing a time to suit the argument. If you had put everything into Japan in January 90 and held till now you would still be down. Nobody with a brain would have done that. It also will no doubt (eventually) recover.

AnotherJoe

Jonah01 wrote: »

I am happy to lock the money away but could do with some way of seeing a risk analysis of the various asset types.

For example 100% equities versus 60%. While I know the first is riskier but how much riskier?
40% more

A very vague question sorry

I know this is a very simplistic way of looking at it but I just need to invest in something that will show a positive return short term just for my mental well being ha ha
Two issues there. You shouldn't be investing until you understand there will be times you will be lower than what you put in. You could drip feed in but still not guaranteed . Second, if you are regularly investing you need to understand that low and falling prices at the start are good as long as you are widely invested. I've underscored understand to emphasise you really have to take on board that investments can go down and that buying cheap is good subject to provisos about over concentration .

Another question - If you take the fundsmith or Lindsell Train global funds. Are there people that just lump their entire pot into these?
Probably. That doesn't mean it's a good idea. It isn't.

For the last 5 years the gains have been amazing. Obviously I understand the risks involved with doing this now but does it go on?

Again you need to understand no one knows what the future holds

steampowered

Jonah01 wrote: »

I know this is a very simplistic way of looking at it but I just need to invest in something that will show a positive return short term just for my mental well being ha ha

This is not possible.

You are investing for the long term.

With stocks some years they go up, some years they go down, there will be dividends do. You have to accept that. The long term trend is up - about 8% on average each year is the historic return on the major stock markets.

Prism

Jonah01 wrote: »

Another question - If you take the fundsmith or Lindsell Train global funds. Are there people that just lump their entire pot into these?

For the last 5 years the gains have been amazing. Obviously I understand the risks involved with doing this now but does it go on?

I don't put my entire pot in but of my equities Fundsmith is around 50%. I use it as my core global allocation. I then have a few other funds to cover emerging markets, small/mid cap companies and specific sectors when appropriate (tech, health, AI etc)

I do not believe that Fundsmith or Lindsell Train are anything like Woodford in their approach - at least not the current Woodford. None of this messing around with unquoted startups, house builders and biotech. Woodford focuses on share price (value). The other two don't pay it too much attention.

Audaxer

fun4everyone wrote: »

By Woodford scenario I mean an active manager losing the plot and having terrible performance. The value of your holding could still plummet if we have a correction or crash. That is why I say pick an appropriate risk level and make sure it is for 5 years+. If/When it crashes and you hold on, history shows it always eventually recovers.

I would say pick an appropriate risk level and be prepared to have it invested for at least 10 years.

seacaitch

There are a range of trackers available and I suppose the global ones do protect you from crashes in specific regions.

Not really, no.

By far the largest risk asset constituents of any global fund will be developed market ones, which will all crash together. And, in the globalised world we (still!) inhabit, correlations between most regions are high.

I know this is a very simplistic way of looking at it but I just need to invest in something that will show a positive return short term just for my mental well being

Your current demeanour/mindset is not compatible with sensible long term investing.

If you invest money with this mindset, then in the face of the next significant market sell off I would say you are pretty much guaranteed to sell out, crystallising losses.

Another question - If you take the fundsmith or Lindsell Train global funds. Are there people that just lump their entire pot into these?

For the last 5 years the gains have been amazing. Obviously I understand the risks involved with doing this now but does it go on?

You've alighted on those two funds solely because they're the top of historic performance charts. You state that "Obviously I understand the risks involved with doing this now", presumably referring to buying these funds now, but I really don't think you understand the risks at all, and in the face of a steep market sell-off you would bale out of these funds just as you would any other funds, crystallising losses and permanently losing capital.

At the moment you are bruised from your investment experiences to date, which are largely due to you (a) not knowing what you're doing and partly (b) you bumping into some "bad luck".

(b) happens from time to time, just as "good luck" happens from time to time when investing [it's why we diversify] but (a) has compounded your "bad luck".

I would reiterate that you don't currently know what you're doing, and my suggestion is that before you embark on further decision making regarding your next investment that you first take steps to very significantly improve your level of knowledge and establish a sensible investment plan (either yourself or with professional input).

At the moment, you're a danger to yourself, and will very likely lose more money in the future.

People who have bad experiences investing very early on can as a result be put off for life, with very damaging long term effects on their lifetime wealth. If you're not careful here, this will be you. It's time to get a grip.

MaxiRobriguez

A short term positive return is possible.

It's called a Marcus account.

OldMusicGuy

Try reading these books before you do anything else:
"Investing Demystified" by Lars Kroijer
"DIY Simple Investing: A Guide to Simple but Effective Low Cost Investing" by John Edwards

Jonah01

steampowered wrote: »

This is not possible.

You are investing for the long term.

With stocks some years they go up, some years they go down, there will be dividends do. You have to accept that. The long term trend is up - about 8% on average each year is the historic return on the major stock markets.

Sorry it was a bit tongue in cheek as was just explaining my mindset of being bruised. I understand it is a long term investment.

Jonah01

seacaitch wrote: »

Not really, no.

By far the largest risk asset constituents of any global fund will be developed market ones, which will all crash together. And, in the globalised world we (still!) inhabit, correlations between most regions are high.



Your current demeanour/mindset is not compatible with sensible long term investing.

If you invest money with this mindset, then in the face of the next significant market sell off I would say you are pretty much guaranteed to sell out, crystallising losses.




You've alighted on those two funds solely because they're the top of historic performance charts. You state that "Obviously I understand the risks involved with doing this now", presumably referring to buying these funds now, but I really don't think you understand the risks at all, and in the face of a steep market sell-off you would bale out of these funds just as you would any other funds, crystallising losses and permanently losing capital.

At the moment you are bruised from your investment experiences to date, which are largely due to you (a) not knowing what you're doing and partly (b) you bumping into some "bad luck".

(b) happens from time to time, just as "good luck" happens from time to time when investing [it's why we diversify] but (a) has compounded your "bad luck".

I would reiterate that you don't currently know what you're doing, and my suggestion is that before you embark on further decision making regarding your next investment that you first take steps to very significantly improve your level of knowledge and establish a sensible investment plan (either yourself or with professional input).

At the moment, you're a danger to yourself, and will very likely lose more money in the future.

People who have bad experiences investing very early on can as a result be put off for life, with very damaging long term effects on their lifetime wealth. If you're not careful here, this will be you. It's time to get a grip.

Thanks for your honest assessment.

As mentioned in my previous reply this was slightly tongue in cheek. I fully understand it is long term. I am only investing money that I don't mind locking in for the long term. Short term losses wouldn't panic me in a well diversified portfolio because i know long term the result will be positive.

I am not about to jump into an investment without the knowledge required so I do not believe I am a danger to myself at all but I appreciate what you are saying. (obviously ignoring my Woodford experience as I jumped in two footed there!)

I also know I am not going to leave my money as cash and miss out on the oppoutunity of investing and the rewards that can come with it.