Where to Start?

sendu

Prism wrote: »

The sweet spot that we are referring to was

Not specified, but I took it to be the sweet spot of the fund that had problems.

With Terry Smith its when he tried to embrace emerging markets. (still unsure about this one)

Which is exactly the point. It's very easy to say what the "obvious" problems were in hindsight, but deciding if they're problematic enough to sell at the time is almost impossible. It seems like most people have decided not to sell Fundsmith. Are they fools? Are the people who do sell and miss out on next year's possibly good performance fools?

You just don't know.

Nonsense yourself!. You certainly cannot pull money out whenever you like unless you don't mind taking some major losses. Just like active investing

You misunderstand my point. With index investing you don't have to guess about the future. You look at the current price, and only when you want some money, and can decide if to sell or not based on that. You don't need magical predictive powers.

Audaxer

sendu wrote: »

You misunderstand my point. With index investing you don't have to guess about the future. You look at the current price, and only when you want some money, and can decide if to sell or not based on that. You don't need magical predictive powers.

I'm also in the passive camp although I do have some active funds. Even with passive indexes or multi asset funds of passive indexes, there is still a decision to make as to when to drawdown and how much to drawdown, when in the deaccumulation phase, just like you have to do with active funds.

sendu

Audaxer wrote: »

I'm also in the passive camp although I do have some active funds. Even with passive indexes or multi asset funds of passive indexes, there is still a decision to make as to when to drawdown and how much to drawdown, when in the deaccumulation phase, just like you have to do with active funds.

Sure, but it's a decision based on the current price. If you're not taking money out systematically (eg. every month or year on the same date), then you're doing what, only taking money out when it's not negative that year? When it's above a certain % gain that year? Trying to time the market?

If you wanted to try and do "when it's above a certain % gain", then the only assumption you need is that of general investing: that the market is going to go up eventually, so you just wait until your % is met.

Again, very different to "when is this fund going to start underperforming and never go above average performance again?". That's not something you can just wait out by doing nothing more than checking the current price.

bostonerimus

First of all do a budget and see how much money you can save and invest each month.

Then save a good emergency fund in your bank account, maybe 6 months worth of spending. If you want to save for a house deposit you’ll probably need to save quite a bit more, and research LISAs

Then look at your company pension and contribute enough to get the max company match. Invest in an equity heavy multi asset fund like VLS80.

Then look at ISAs and also invest in multi asset funds

Thrugelmir

sendu wrote: »

You misunderstand my point. With index investing you don't have to guess about the future. You look at the current price, and only when you want some money, and can decide if to sell or not based on that. You don't need magical predictive powers.

Doesn't sound like investing to me. Just a numbers game. Index is a very generic term.

sendu

Thrugelmir wrote: »

Doesn't sound like investing to me. Just a numbers game. Index is a very generic term.

I'm referring to investing in a fund that tracks a broad stock market index, passively. Why doesn't that sound like investing to you? It is.

Thrugelmir

sendu wrote: »

I'm referring to investing in a fund that tracks a broad stock market index, passively. Why doesn't that sound like investing to you? It is.

Wasn't the "index fund" I was commenting on. More your approach. As Warren Buffet is quoted as saying "if making money were that easy we'd all be librarians". Passive investing isn't new. Just one of a number of tools or approaches available. All of which should have a time and a place during an investors lifetime.

sendu

Thrugelmir wrote: »

Wasn't the "index fund" I was commenting on. More your approach. As Warren Buffet is quoted as saying "if making money were that easy we'd all be librarians". Passive investing isn't new. Just one of a number of tools or approaches available. All of which should have a time and a place during an investors lifetime.

It's not at all clear to me what part of what I said you have issue with or why.

Warren Buffet recommends the exact same approach as I do.

BLB53

I am looking for low cost options that are low risk that will produce good long-term outcomes, as per the advice. But where/how do I find these, and when I do, how do I decide they're the right investment for me?

It can be very confusing for new investors - there are so many funds and so much conflicting 'advice'. One of the most basic things to come to terms with is whether you have the temperament for investing - something you probably won't know until you try it!

For starters, I would recommend a couple of books, one is an easy read "DIY Simple Investing" by Edwards and the other a longer book (quite expensive) on passive investing "Smarter Investing" by Hale.

Prism

sendu wrote: »

Warren Buffet recommends the exact same approach as I do.

He does, but its a little different in the US. He recommended an S&P passive tracker over US hedge funds, which typically have a much higher fee than in the UK. They also pay tax on every active transaction within the fund.

I think its fair to somebody who leaves their options open to global passive funds and ETFs, smart beta stuff, selective active funds and investment trusts is in a good position.