SIPP/ portfolio advice

Voyager2002

EdGasketTheSecond said:

Voyager2002 said:

Dealing costs plus time out of the market might make this an expensive move! Plus, the OP holds investment trusts and might not want to move into Funds instead, partly because of the hassle of choosing a completely new portfolio.

Well how else are they going to save II's charges?

It is generally possible to move your entire holding from one platform to another, for a fee of course.

Voyager2002

noClue said:

So would you say for a younger guy investment trust is not really the choice then? Basically I am not looking for any dividends or interest paid to me for probably at least another 2 decades...

If they pays me any dividend then I guess I will have to pay tax (if I pass the threshold) even I want to re-invest the dividends? Or I can set it up so the dividend gets re-invested automatically?

Firstly, it is sensible for a younger person to look at 'growth' investments rather than 'income' investments.

Secondly, if you hold an investment that produces an income in an ordinary dealing account then you are liable to pay income tax on the amount of the dividend, and it makes no difference if that amount is immediately reinvested (something that you can arrange to happen automatically). If the investment is held inside a SIPP or ISA then there will not be any tax liability

Voyager2002

noClue said:

what is the "practical" advantage of investment trust over diversified mutual index fund?

If an investor in a mutual fund wants their money, the fund sells units to get the money. If an investor in an IT wants their money, they sell their holding to someone else. Thus the investment trust does not need to get involved in buying and selling when individuals increase or reduce their holdings and so is saved dealing costs. Moreover, this means that an IT can hold things that would be difficult to sell in the short term but profitable in the long run (property is the obvious example). An IT can thus work well for someone who wants to hold their investment for an extended period.

Albermarle

EdGasketTheSecond said:

If you are not trading then move your SIPP to another provider where the charges are lower. You would have to sell the funds and move cash as that is the most expedient way. Scottish Widows have a wide range of funds and no charges other than the fund management charges; switches between funds are free. They also make no charge when you take a pension lump sum.

If my memory serves me correctly , this is the first post I have ever seen actually recommending Scottish Widows as a provider.:)

thickasabrick

AnotherJoe said:

It would hurt me to sell much SMT, to quote Zaphod Beeblebrox "those guys know where their towels at". And you've got another what at least 20 years to go for it to grow. Sure it will be volatile but you have time to ride it out. I'm holding mine indefinitely. I see a double from here over 3 or 4 years time.  

Maybe grudgingly on the grounds of prudence sell a third at most. 

I'd sell everything else and buy a global index fund and a fund focussed on renewable energy, Eg solar and wind. That's where the future lies. 

So three funds in total. 

Was sure I'd bookmarked a couple of articles describing the effect of holding onto poor performing assets and selling the good performers impaired your portfolio.
Can only find this one, "Invest for the long-term: run your winners, and cut losers" 
Scottish Mortgage Investment Trust looks like a keeper to me if I've read the info on Trustnet and Morningstar correctly.

AnotherJoe

noClue said:

what is the "practical" advantage of investment trust over diversified mutual index fund?

with my broker (HL) far lower management fees 
Also,  you can't get locked into an IT in the same way you can with a fund which can freeze trading if things get out of whack.

AnotherJoe

noClue said:

So would you say for a younger guy investment trust is not really the choice then? Basically I am not looking for any dividends or interest paid to me for probably at least another 2 decades...

If they pays me any dividend then I guess I will have to pay tax (if I pass the threshold) even I want to re-invest the dividends? Or I can set it up so the dividend gets re-invested automatically?

No tax if it's in an ISA. 

Set to reinvest automatically. 

noClue

AnotherJoe said:

noClue said:

what is the "practical" advantage of investment trust over diversified mutual index fund?

Also,  you can't get locked into an IT in the same way you can with a fund which can freeze trading if things get out of whack.

like Neil Woodford?

noClue

Voyager2002 said:

noClue said:

what is the "practical" advantage of investment trust over diversified mutual index fund?

If an investor in an IT wants their money, they sell their holding to someone else.

Moreover, this means that an IT can hold things that would be difficult to sell in the short term but profitable in the long run (property is the obvious example). An IT can thus work well for someone who wants to hold their investment for an extended period.

Two questions if I may. What if no one wants to buy when I sell? How does this "an IT can hold things that would be difficult to sell in the short term but profitable in the long run" affect me? Does it mean that because it may take IT a long time to sell their physical properties for a high profit, thus investor would have no choice but "wait" for that happen?

Moe_The_Bartender

noClue said:

Voyager2002 said:

noClue said:

what is the "practical" advantage of investment trust over diversified mutual index fund?

If an investor in an IT wants their money, they sell their holding to someone else.

Moreover, this means that an IT can hold things that would be difficult to sell in the short term but profitable in the long run (property is the obvious example). An IT can thus work well for someone who wants to hold their investment for an extended period.

Two questions if I may. What if no one wants to buy when I sell? How does this "an IT can hold things that would be difficult to sell in the short term but profitable in the long run" affect me? Does it mean that because it may take IT a long time to sell their physical properties for a high profit, thus investor would have no choice but "wait" for that happen?

You can buy or sell shares in an IT at any time. You might just not like the price.