Balancing risk, trackers

Thrugelmir

mogscot said:

masonic said:

mogscot said:

 PRU funds:  are they not of value to maintain core stability and reduced volatility while investing other funds in increased risk while maintaining a core. Surely many people have some funds with less risk and some with more as a balance across their investments. 

Thank you 

There are higher risk and lower risk funds, achieved by combining different asset classes in various proportions and they will go up and down with the daily movements of those assets. Then there are funds which deliberately hide the daily fluctuations from investors by paying returns as a regular bonus rate. The bonus rate is set lower than the average growth of the assets, so that it can be accumulate at a steady rate and then the excess is held back as a reserve to avoid losses in the bad times. There is a cost to this approach for investors, in the form of higher charges. So the value is really for frightened investors who couldn't cope with seeing the value of their investments fluctuate.

mogscot said:

Should I return to the IFA and invest through him into a multi asset fund? If the PRU funds are not startling, what next? What is better for some core security. 

With all the rating systems is it not possible to reliably do the work by reading HL and other ratings systems that sieve through funds? Is this not what many do?

There is little point in returning to the IFA if you decide to pick your own investments. If you believe your IFA has misunderstood your tolerance for risk then perhaps that is the conversation to have. I'm sure many do rely on HL's marketing list, but it should be viewed with much scepticism, take the recent recommendation to invest in Neil Woodford's funds for example.

Do you all have an IFA or are you DIY and if so how did you begin or commit to the transition.

We are all different. Take your own journey. Experience can only be gained over time.  Remember investing is for the long term. There'll always be someone or something performing better than you in the short term.  Investment decisions need to be rationalised not knee jerk. 

eskbanker

Thrugelmir said:

We are all different.

"I'm not"

Thrugelmir

Great film! 

dunstonh

I agree and of course would hope not to rely on one platforms recommend list, especially after the Neil Woodford debacle.  Surely many IFAs use these ratings systems routinely, if time is spent there must be some basis to review them yourself and pick perhaps a split between two/three multi asset funds. Clearly there are funds and funds and different risk profiles. 

Nope.   I don't take any notice of rating systems as they do not carry out the required due diligence to ensure they are suitable.  They are too focused on past performance and you dont need a rating system to tell you that.   Some may attach a minimal level of analysis in terms of how the fund is run but not to a high enough standard for advisers to rely on.

For example, here is a copy and paste from a research provider that supplies IFAs.

The size of the strategy is significant (>£9bn), meaning we expect the fund to experience outflows given the scale of the departures. 
Our analysis shows 37.1% of the strategy could be liquidated within one week and 47.8% of the strategy could be liquidated within 10 days. It would take more than 30 days to liquidate approximately 13.9% of the portfolio which includes twelve positions. Having done some analysis on top 10 holdings, the fund does not hold more than 5 percent of any stock, even at the overall firm level. Given this we don’t expect a liquidity squeeze on the fund in the coming weeks and months. 

So, you can see from that the level of due diligence is far higher than a star rating given by a ratings company.   It is also worth noting that a number of fund houses will not pay the ratings companies to rate their funds.  Often with those, the ratings companies will just run an analysis based purely on past returns.

It is possible to do a fairly high level of due diligence on a DIY basis.  However, it doesn't mean just looking at ratings.  

mogscot

Once again thank you. It seems we start or restart somewhere. My granny always was self taught in share dealing and was of the view ‘come out and leave perhaps more profit or loss for the others’ . I’m not sure I have the time to learn it all hence looking for ways to access reasonable returns for of course medium risk. 

Surely thee must be some ways through the mire. 

I can see what is being said re ratings and past returns. Still not a way forward it seems yet all on here with sage advice found one. 

Thanks again.

eskbanker

mogscot said:

My granny always was self taught in share dealing and was of the view ‘come out and leave perhaps more profit or loss for the others’

Is that really a 'view' in any meaningful sense?  Perhaps it means something to someone but to me it sounds like 'toss a coin and chances are it'll be either heads or tails'....

MaxiRobriguez

Op: Most pressing thing for you at 57 is that £20k in your pension. That's going to give you a few hundred pounds a year in retirement, not thousands. Work on that with capital injection.