Comments on my current Portfolio?

iglad

EdSwippet wrote: »

So would everybody. However, this presents a false dichotomy. More realistically, you have a 50% chance of growth above market (5% or whatever) at 0.75%, a 50% chance of growth below market at 0.75% fees, or a 100% chance of growth at market at 0.25% fees.

tracker funds cannot and will not ever beat the market benchmark so I pay the extra to get that fund manager to beat the market quite handsomely.

Low fees = low growth

Prism

iglad wrote: »

tracker funds cannot and will not ever beat the market benchmark so I pay the extra to get that fund manager to beat the market quite handsomely.

Low fees = low growth

I am all for a bit of selective active investment but that statement is daft. Some of the best performining funds of recent years are low cost passives.

to_jackie_too

iglad wrote: »

tracker funds cannot and will not ever beat the market benchmark

Oh yes they can ... see forums.moneysavingexpert.com/showthread.php?t=6014887

But really, that is beside the point. Beating the benchmark is just willy waving. What matters is whether your investments allow you to achieve your aims, e.g. a comfortable or early retirement, or buying a yacht, or whatever.

EdSwippet

iglad wrote: »

Tracker funds cannot and will not ever beat the market benchmark so I pay the extra to get that fund manager to beat the market quite handsomely.

No. You pay the extra for a 50% chance that the fund manager will beat the index by some margin -- statistically far more likely to be a tiny margin than a 'handsome' one -- and a 50% chance that they will not.

masonic

In essence...

When you buy a tracker, you buy an investment that very slightly underperforms its benchmark with a very low margin of error (tracking error). So a tracker can sometimes beat the market slightly, but will always be very close to the market return.

When you buy an active fund, you buy an investment that will more substantially underperform its benchmark but with a high margin of error. An active fund can substantially beat the market, and can do so for several years, but it can also underperform, which statistically is far more likely (because costs set the bar higher). The problem is that these outcomes can occur purely by chance, so past performance is no guide to the future and you can never tell whether a fund or manager is exercising true skill or whether they have been lucky. An example of a fund manager long heralded to be one of the few who is truly skilled enough to perform consistently is Neil Woodford. Until the last couple of years, that is...

Linton

What is THE market? My growth portfolio asset allocation is very different to any tracker. Can soneone tell me what market I am in? Perhaps the only market one can talk about is global all cap as anything else is a mere subset. But it has been easy to beat this over the past 20 years simply by investing in UK Small Companies, or any other developed market Small Companies. The theory is reversion to mean, but over what time frame? 20 years is clearly too short.



However as "To Jackie too" says, its completely beside the point. Good investing means meeting ones objectives at an acceptable risk rather than focusing on maximum returns.

iglad

My main objective is ensuring maximum returns after all what else is there? I'd rather get my specific amount of money in 1 year rather than 3 years. Either I'm reading the wrong articles but there are some strange investing views.

MaxiRobriguez

iglad wrote: »

My main objective is ensuring maximum returns after all what else is there? I'd rather get my specific amount of money in 1 year rather than 3 years. Either I'm reading the wrong articles but there are some strange investing views.

There's also a thing called protecting what you've made.

You said you've been in investing for over 20 years, which makes you at the very youngest early 40's, but probably nearer 50s if not in them already.

At some point you're going to want to dial down your risk and not just go for "maximum" returns because at some point you're going to want to convert the asset into cash, and you don't want to be doing that when your assets have just lost 50% in value.

It's fine going for an all out 100% aggressive equity portfolio when you're young, that's exactly what I'm doing, but my investment horizon is still thirty years away. How long is yours?

iglad

yes after 20 years I split my money in half when I cashed out in October 2018 and put half in cash, it's safe but oh so boring. I'm on a mission to try and double my current money within 10 years (based on 10% growth p.a. attainable in 7 years apparently).

Why does everyone talk about losing 50% of your assets on here?

Warren Buffett who's a lot older than me doesn't seem to be dialing down his investments so why should I? I also trying to make up for the 20 years of my fund inactivity as I just used to put the statements in a folder twice a year. The funds did quite well but I could have done oh so much better had I paid an interest.

iglad

All the funds I've invested seem to be beating the benchmark by more than a tiny margin (at least 10 points higher on average) however BG America has faltered slightly.