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Mordko wrote: »
A couple of questions to ask your IFA:
1. The bulk of this portfolio is in RLP Global Managed. Why has it underperformed it’s benchmark year in, year out? It’s otherwise tracking the benchmark, just a few percent below each period. Why would I not invest in the benchmark instead?
2. The fund is classified as “balanced”/“moderately cautious”/“moderately adventurous”
Balanced funds typically have at least 40% bonds. This fund has 20% bonds; the rest is in highly volatile assets, such as industrial property, commodities and stocks. What’s the potential for a drawdown and how it corresponds to my risk tolerance?
3. How do you justify recommending an investment with over 50% in a single market (UK).
Thanks, I'll ask these questions of my IFA.
The fund and IFA fees are relatively low, but I'll ask RL whether or not ongoing IFA fees are optional.
The mixed equity 40-85% sector, which used to be known as balanced managed before the term "balanced" was changed to indicate equity weighting, has between 40-85% equities. So, this could be 60% bonds to 15% bonds.
It is at the right end in most areas and ideal for low knowledge consumers as you cannot do much wrong with it and you are putting the investment decisions in the hads of people that do know what they are doing.
Wrong. Balanced funds traditionally have been 60-40 stocks/bonds as recommended by Benjamin Graham in Intelligent Investor.
Everything else is wrong too. You can own REITs, property shares traded on a stockmarket or you can own a commercial property portfolio. Call it what you want, they will perform in a similar manner to each other.
This is REALLY bad. First of all the recommended portfolio is poor and misleading.
Crucially, nobody should “put investment decisions in the hands of people who know what they are doing”.
Just because one person says
To criticise sensible mainstream solutions aimed at those people
Mordko wrote: »
Really? Benjamin Graham is “one person says”?
This is how physical property performed in 2008 (plot in the linked article).
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