£350K down the swanny

chucknorris

steampowered wrote: »

This is a classic example of loss aversion bias: https://en.wikipedia.org/wiki/Loss_aversion.

What it leads to in terms of investor behaviour is a situation where you are quick to take gains, but slower to realise losses. On average that tends to lead to bigger losses and smaller gains.

I think every investor has that cognitive bias but it is important to realise that it is not rational !

I don't agree with your conclusion, I am not afraid of making losses, depending on the particular circumstances, I usually see downturns as opportunities.

When our property portfolio dropped by about £1m in 2008, we actually bought another house.

You might have had a point if I had moved the money to something like cash, but I didn't, I re-invested in the original etf index, so it was still invested.

EDIT: If I had stayed in the first time (as you infer), I would currently be down about £65k, rather than being £40k up.

Sailtheworld

Malthusian wrote: »

Only a small number of people actually do due diligence and query their assumptions all the way down. Everyone else gets lucky. When someone gets unlucky everyone else says "it's their fault, they shouldn't have been greedy" so they can sleep at night.

It's not so much they want to sleep at night but they want to keep believing, as they keep being told, that they're special; they have an edge because there's a massive industry making a living on this (mainly false) belief.

They're just as greedy and inept as our David - they've just not been called on it yet.

Sailtheworld

chucknorris wrote: »

I didn't think that the risk was that significant, and although it was a substantial amount it was less than 8% of our portfolio. Although of course there is always going to be more risk with a single company share than with an index. But British Land holds substantial properties and although the retail sector in particular is facing headwinds, I considered that to have been priced in at the price that I paid. Ditto to a lesser extent with Brexit possibly affecting London office yields.

My gut instinct was telling me to remain invested, but as it was my all of my ISA and SIPP, I thought it better to play it boringly safe. I did however leave my £40k unwrapped investment there, now worth £46k.

It's a small amount of money (to you), you had a gut feel so took a punt and, a little later, you had another feeling and took another punt. You hadn't really considered beforehand what the returns might be or risk adjusted them to allow comparisons with the alternatives.

If it had gone t**ts up (not that we would have heard about it) people would be saying well what sort of due diligence was that?Who day trades 8% of their portfolio? Etc. Etc.

Not knocking it (and clearly you're not as daft as David) because it's how most people invest and when it does go t**ts up they need the narrative that keeps them doing the same thing whilst expecting a different outcome.

fred246

It's easy to get involved in an investment scam. Just go on unbiased and find an IFA. Have a consultation and agree to pay their fees. Voila. An investment scam.

chucknorris

Sailtheworld wrote: »

It's a small amount of money (to you), you had a gut feel so took a punt and, a little later, you had another feeling and took another punt. You hadn't really considered beforehand what the returns might be or risk adjusted them to allow comparisons with the alternatives.

If it had gone t**ts up (not that we would have heard about it) people would be saying well what sort of due diligence was that?Who day trades 8% of their portfolio? Etc. Etc.

Not knocking it (and clearly you're not as daft as David) because it's how most people invest and when it does go t**ts up they need the narrative that keeps them doing the same thing whilst expecting a different outcome.

Day trade? The first time it was for more than a year, the second time was over 3 months. Of course I knew what the returns would be, I was well on top of that, the yield is very important to me. I even knew what the annual dividend change was going to be (British Land announce in advance what the following year's dividends will be).

Excuse me for saying this, but I know what I was thinking, you are merely (incorrectly) guessing what I was thinking at both the time that I invested and also when I switched back to my original investment. If I was marking your text in a dissertation, I would have commented that you should not present your opinions as facts.

This is what I posted in May 2017 just before investing in British Land for the first time, it is clearly not merely a 'punt':

I see this as an opportunity to make some important much needed changes to my portfolio, and the timing co-incidentally is perfect, because all of my SIPP and ISA (£395k) are currently in cash, so I can kill 5 stones with one bird here (see my signature). They were previously in the ftse 100 (VUKE), you don't have to say it, I know, very daft, due to lack of diversity. Although luckily it worked out well as I invested at somewhere under 6,000 (I don't actually know) and sold at just under 7,400. If I switch to REITs, it will achieve 5 things:

1. Add the much needed diversity of commercial property to my portfolio.
2. Get away from the inferior ftse 100.
3. Improve my dividend income.
4. Get my SIPP and ISA re-invested before the next ex-dividend date (29 June in the case of British Land).
5. Lock in that profit from the ftse 100.

I've just been looking at British Land, it currently yields 4.59%, I really like the look of it, I'm going to look at others. I think I will probably invest the £395k over 2 or 3 REITs.

You were asking why don't I already have something in the REIT sector, I've also been asking that myself, it seems bloody obvious that I should have, especially as I am slowly selling my BTLs, it is a perfect fit for me.

iglad

colsten wrote: »

Here's a sad tale about someone who thought they should DIY their investment, even though they had no prior investment knowledge.



https://inews.co.uk/inews-lifestyle/money/scam-money-back-clone-fraud-350000-lost-remedy-637910

The same company cropped up on here in April

https://forums.moneysavingexpert.com/discussion/5986348/bruckner-ferdinand

iglad

talexuser wrote: »

It is sad beyond the usual ripostes.

Very sad indeed with that amount of money he should have gone to see a financial advisor, instead he or she looks things up on the internet.

iglad

englishmas wrote: »

What is the time span here,Can you still trace the company? if so fallow trough the police action, The most important here will be if the company still there.

here the time is more important, few days make a big difference.

The company is question was talked about on here in April. that money is long gone and will never be recovered.

https://forums.moneysavingexpert.com/discussion/5986348/bruckner-ferdinand

Sailtheworld

chucknorris wrote: »

Day trade? The first time it was for more than a year, the second time was over 3 months. Of course I knew what the returns would be, I was well on top of that, the yield is very important to me. I even knew what the annual dividend change was going to be (British Land announce in advance what the following year's dividends will be).

Excuse me for saying this, but I know what I was thinking, you are merely (incorrectly) guessing what I was thinking at both the time that I invested and also when I switched back to my original investment. If I was marking your text in a dissertation, I would have commented that you should not present your opinions as facts.

This is what I posted in May 2017 just before investing in British Land for the first time, it is clearly not merely a 'punt':

I see this as an opportunity to make some important much needed changes to my portfolio, and the timing co-incidentally is perfect, because all of my SIPP and ISA (£395k) are currently in cash, so I can kill 5 stones with one bird here (see my signature). They were previously in the ftse 100 (VUKE), you don't have to say it, I know, very daft, due to lack of diversity. Although luckily it worked out well as I invested at somewhere under 6,000 (I don't actually know) and sold at just under 7,400. If I switch to REITs, it will achieve 5 things:

1. Add the much needed diversity of commercial property to my portfolio.
2. Get away from the inferior ftse 100.
3. Improve my dividend income.
4. Get my SIPP and ISA re-invested before the next ex-dividend date (29 June in the case of British Land).
5. Lock in that profit from the ftse 100.

I've just been looking at British Land, it currently yields 4.59%, I really like the look of it, I'm going to look at others. I think I will probably invest the £395k over 2 or 3 REITs.

You were asking why don't I already have something in the REIT sector, I've also been asking that myself, it seems bloody obvious that I should have, especially as I am slowly selling my BTLs, it is a perfect fit for me.

There is a bias at play here. Investments that work are easy to justify. If this had gone t**ts up you (a) wouldn't have mentioned it and (b) could just as easily explain why it didn't work.

There's no need to take it so personally. For all I know you really have an edge - my comments are generic.

People don't want to ask the big questions like 'do I really know what I'm doing?' so when someone loses money they try and find a reason to find 'blame' - anything to avoid that question.

In your example if your trade had gone badly wrong most of the forumites would have just said 'he had x% of net worth in property and thought commercial property was a diversifier - I'd never do that'. Then walked away reassured their own strategy was sound.

chucknorris

Sailtheworld wrote: »

There is a bias at play here. Investments that work are easy to justify. If this had gone t**ts up you (a) wouldn't have mentioned it and (b) could just as easily explain why it didn't work.

There's no need to take it so personally. For all I know you really have an edge - my comments are generic.

People don't want to ask the big questions like 'do I really know what I'm doing?' so when someone loses money they try and find a reason to find 'blame' - anything to avoid that question.

In your example if your trade had gone badly wrong most of the forumites would have just said 'he had x% of net worth in property and thought commercial property was a diversifier - I'd never do that'. Then walked away reassured their own strategy was sound.

I'm wasn't taking it personally, I was just telling you that you were incorrect, it wasn't a punt.

I am more comfortable in indexes than single company shares, but a major REIT is of interest to me, for portfolio diversity. But that said, at the end of the day it is still a singe company share, so if I can take a reasonable profit and re-divert to an index I will, and I did.

There is no one to blame but yourself, when/if things go wrong, I know that.

Sometimes though it isn't just about the money, I am meeting with some estate agents today to discuss selling another property (I exchanged on one last week). The price that I anticipate achieving, means that I would have to earn 7.3% on the equity released to be in the same position financially. That obviously isn't going to happen, but nevertheless I will consider selling for lifestyle reasons.