SIPP Advice

MaxiRobriguez

ZingPowZing wrote: »

I mentioned two tech companies from a handful of the best known names following splodge's lead. Consensus is that investing in a handful of stocks is terribly risky, so I thought I'd share the potential upside. To me, the possibility of a Woodford style gating makes funds the riskier proposition.

The concept that individual stocks is "risky" is just another way of saying your performance will be more volatile than an index tracker, both upwards as well as downwards.

Apple and Microsoft have posted many years of strong performance, but they cannot continue in that fashion as at some point you run out of growth potential. Apple for example have created the Apple Watch in the ten years since Steve Jobs died. If they're as 'innovative' in the next decade do you think a sky-high stock price is going to continue growing if they're still reliant on shifting the iPhone? If you've missed the boat on these, you've missed the boat. Nothing to be ashamed of but don't chase the gains just because 'gains'.

Single stocks for all but the most expert and well capitalised should be a small fragment of a portfolio dominated by index funds, and the single stocks purchased should be identifiable value or high-growth potential stocks which aren't well represented in the index funds. Apple and MS make up decent chunks of US index trackers so why go and buy separately?

[Deleted User]

Deleted_User wrote: »

Going for active funds and particularly rockstar managers has its risks but it’s not the only option.

You are correct; AAPL is large and has been successful. Do you seriously think that investors aren’t aware? And if they are, why wouldn’t it be baked into the price? Did you know that Apple’s revenue has been falling and so have earnings per share? Yes it is a trillion dollar company. If the market cap continues growing at the same rate, won’t be too long before AAPL will become more valuable than the rest of the world. Do you think it’s likely? Your method of screening stocks is a little unorthodox.

I hold a strong opinion on the price of sterling this time next year; wouldn't dream of trying to price Apple. That would be a futile exercise, a vanity project.
When you suggest all the info is "baked in" to the price, do you mean when you posted or now? Or when?

[Deleted User]

ZingPowZing wrote: »

I hold a strong opinion on the price of sterling this time next year; wouldn't dream of trying to price Apple. That would be a futile exercise, a vanity project.
When you suggest all the info is "baked in" to the price, do you mean when you posted or now? Or when?

At all times. US stock market is as efficient as a market can be. Information appears on the web; it starts impacting stock prices within nano seconds. Of course there is also insider trading; perhaps you know more about APPL than anyone else in the world.

You betting on currencies is very cool but a) not a way to make money and b) buying single stocks isn’t the way to do it

[Deleted User]

Deleted_User wrote: »

At all times. US stock market is as efficient as a market can be. Information appears on the web; it starts impacting stock prices within nano seconds. Of course there is also insider trading; perhaps you know more about APPL than anyone else in the world.

Quite. That's my point.
I don't need to know whether the price of a trillion dollar company is "correct", the market does it. I don't need inside info, I just need a level playing field to beat a fund.

coyrls

ZingPowZing wrote: »

Quite. That's my point.
I don't need to know whether the price of a trillion dollar company is "correct", the market does it. I don't need inside info, I just need a level playing field to beat a fund.

[FONT=&quot]You are hardly on a level playing field with a fund manager in all sorts of ways and as you have pointed out, they regularly fail their benchmarks. With your relative lack of knowledge, resources and dealing options, why do you think you are going to do better?[/FONT]

cfw1994

splodge2001 wrote: »

Does no one think I should go more into Fundsmith or Lindsell Train?

I agree strongly with those suggesting you've picked far too many funds there....
I'm a great believe in the Lars Kroijer investment philosophy.
Which means I would recommend a low cost global tracker.
VLS style (others are available) - pick your level of risk (VLS60/80/100 - for 10-20+ year investment, my personal preference would be for the 100)

[Deleted User]

coyrls wrote: »

[FONT=&quot]You are hardly on a level playing field with a fund manager in all sorts of ways and as you have pointed out, they regularly fail their benchmarks. With your relative lack of knowledge, resources and dealing options, why do you think you are going to do better?[/FONT]

1) Their fees.
2) Reversion to the mean. Which theory still pervades the industry.

One thing perpetuated by the financial services industry, with which you chime, is that investment is best left to themselves.
Unfortunately, we are posting on the thread of someone who had twenty years of investment growth consumed by the industry.

fronty

Personally I'd just stick it all in Vanguard Life Strategy 80 or HSBC Global Strategy Dynamic - job done.

kinger101

ZingPowZing wrote: »

Reversion to the mean

Why is it that you think a fund manager's performance will revert to the mean, but not an individual stock?

And what does this have to do with the index-trackers that are being suggested to OP anyway?

[Deleted User]

“Reversion to the mean” is a reference to long term growth rate of the overall stock market. This has nothing to do with individual stock. Most individual stocks fail over time.