Woodford Concerns

Alexland

Jonah01 wrote: »

I have come to the conclusion active funds are no good for me and that I should be investing in passive cheaper index trackers.

Good conclusion - keeping costs low you should do better than the average investor. Just get invested at an asset allocation risk level you feel comfortable with, based on current fundamentals and your long term objectives, and you can always turn up the dial on risk if better opportunities to buy present themselves in future.

Alex

Jonah01

OldMusicGuy wrote: »

Well, I hold a small number of low cost multi-asset funds and I can tell you that you've already lost out by prevaricating. I checked them the other day and performance so far this year has been far better than I anticipated.

When will you know when the "right" time is? You've got it wrong so far this year, why will you get it right at some point in the future.....;)

It's time in the market.

Prevaricating? When was that? I'm not rushing in for the sake of missing out on a few months


My timing wasn't completely wrong as I'm not stuck in his fund.

AnotherJoe

Jonah01 wrote: »

Prevaricating? When was that? I'm not rushing in for the sake of missing out on a few months
My timing wasn't completely wrong as I'm not stuck in his fund.

So you are going to try market timing by using your knowledge of when the U.K. and US markets have peaked to decide when to buy (and currency markets obviously ) ?
Or if not your knowledge, the knowledge of investors here? Despite stating that you "understand" that market timing doesn't work ?
Did I understand that correctly?

Jonah01

AnotherJoe wrote: »

So you are going to try market timing by using your knowledge of when the U.K. and US markets have peaked to decide when to buy (and currency markets obviously ) ?
Or if not your knowledge, the knowledge of investors here? Despite stating that you "understand" that market timing doesn't work ?
Did I understand that correctly?

The question was phrased poorly but it was simply can events like Brexit be used to at least predict the start of an upturn in the markets.

Every forum has anotherjoe haha

masonic

Jonah01 wrote: »

The question was phrased poorly but it was simply can events like Brexit be used to at least predict the start of an upturn in the markets.

In a word, no. Markets move in anticipation of events. To do this successfully, you need to be the first to know what is going to happen, and make the right call as to how what is going to happen will affect markets. This is impossible to do consistently and if you can't do it consistently you'll generally do worse than someone who doesn't try to time the markets.

Johnnyboy11

Another Telegraph article suggesting 40% illiquid content in the Woodford Equity Income Fund...
https://www.telegraph.co.uk/investing/funds/fca-fire-true-extent-woodfords-liquidity-crisis-exposed/

OldMusicGuy

Jonah01 wrote: »

Prevaricating? When was that? I'm not rushing in for the sake of missing out on a few months


My timing wasn't completely wrong as I'm not stuck in his fund.

That's my point - if you had invested in low cost, multi-asset funds over the past few months, you would have been making money. Instead, you've done nothing and are now dithering about "the right time". Sorry if that sounds critical, but it's typical of the sort of paralysis that inexperienced investors get into. I know because I suffered a lot from it myself.

Your choice was nothing to do with "timing" - you chose the wrong fund in the first place. If you had been in low cost, multi-asset funds you would be happy with how they have performed recently.

itwasntme001

OldMusicGuy wrote: »

That's my point - if you had invested in low cost, multi-asset funds over the past few months, you would have been making money. Instead, you've done nothing and are now dithering about "the right time". Sorry if that sounds critical, but it's typical of the sort of paralysis that inexperienced investors get into. I know because I suffered a lot from it myself.

Your choice was nothing to do with "timing" - you chose the wrong fund in the first place. If you had been in low cost, multi-asset funds you would be happy with how they have performed recently.

All of this in hindsight of course. We are all fooled by randomness, especially us here on MSE. How about accept that we have no idea what strategy will work out best and that people should do what they feel is best for them. Personally i think investing in the stock market is a mugs game - i prefer to invest in businesses.

bowlhead99

itwasntme001 wrote: »

Personally i think investing in the stock market is a mugs game - i prefer to invest in businesses.

It would be fair to say that investing in equities on the stock market to become a part owner of a business always either involves 'investing in businesses', or acquiring other people's investment in the businesses, from them.

If you use a fund to spread your exposure over lots of different businesses, you are reliant on someone else selecting the businesses for you, but you save yourself the trouble (research, cost of access and administrative hassle) of selecting the businesses yourself. This can generally diversify away some of the high risks (and potential rewards) of only being able to access a limited pool of businesses. That very limited pool of opportunities would be the default position for most people in the UK, who aren't serial entrepreneurs or high net worth individuals.

Pretty much all people with a workplace pension build funds for retirement using investments that participate in the stock market. Rather than being a mug's game, it's generally the way to put away a small portion of your annual salary for 40 years and be able to grow it enough to retire on a larger portion of your salary for the 40 after that.

Yes there will be a select few entrepreneurs who have always only run their own business or invested in those run by their friends. You can make very large returns by owning and growing a business in which you work, if lucky/ successful in doing it. So as you suggest, people should do what they think is best, but investing in collective investment schemes exposed to the stock market (whether actively managed or more passively managed) is the popular and lower risk way to do it (versus investing in/ backing one or two businesses and hoping they don't fail)

JohnRo

itwasntme001 wrote: »

Personally i think investing in the stock market is a mugs game - i prefer to invest in businesses.

Intruiged.. care to elaborate?