What did the smart pension money do when values dropped in March/April?

Prism

itwasntme001 said:

Deleted_User said:

“By putting all of your equity allocation into the S&P500 you are saying it will continue to outperform ...”

No. And even if one did, it still isn’t market timng as long as you stick with S&P 500. Here. Continue your argument with the dictionary. https://www.investopedia.com/terms/m/markettiming.asp

If you are buying just the S&P and not expecting it to outperform a global market cap index, why bother buying the S&P500 and instead just buy the global index?

Marketing timing has many definitions but in our context it is the act of buying something that will outperform.  It is a high conviction trade and with high conviction trades you know something better than the market does and that can only ever work until it does not and you won't know when it won't work any more.  Hence market timing.

Why do some many pension funds get invested in the FTSE 100? Why are there so many funds that 50/50 the FTSE all share? Why is the VLS range so popular with its 25% UK allocation. Its not always about performance. Maybe its the warm cuddly feeling people get from investing closer to home. Buffett believes that the US is the best country, has the best economy and the best companies in the world and will continue to do so going forward. I would assume that most of us don't have such a strong feeling about the UK but we still as a nation love to go local! None of that is market timing.

Buffett isn't a market timer... he is just wrong

jimi_man

I didn't do anything different during the crash/correction or whatever it's called. I have a SIPP mainly in Vanguard LS and HSBC Global Bal and a few global trackers in an ISA. I carried on buying approx £1200 a month, so I guess over a few months I might have got some cheaper though as I never look at the price when I buy them I can't really say. So basically I did nothing different from normal. I'm not exactly a sophisticated investor and whilst I buy funds monthly and have done for some years, I've never actually sold any and there was never any question of selling them when it dropped.

[Deleted User]

Prism said:

itwasntme001 said:

Deleted_User said:

“By putting all of your equity allocation into the S&P500 you are saying it will continue to outperform ...”

No. And even if one did, it still isn’t market timng as long as you stick with S&P 500. Here. Continue your argument with the dictionary. https://www.investopedia.com/terms/m/markettiming.asp

If you are buying just the S&P and not expecting it to outperform a global market cap index, why bother buying the S&P500 and instead just buy the global index?

Marketing timing has many definitions but in our context it is the act of buying something that will outperform.  It is a high conviction trade and with high conviction trades you know something better than the market does and that can only ever work until it does not and you won't know when it won't work any more.  Hence market timing.

Why do some many pension funds get invested in the FTSE 100? Why are there so many funds that 50/50 the FTSE all share? Why is the VLS range so popular with its 25% UK allocation. Its not always about performance. Maybe its the warm cuddly feeling people get from investing closer to home. Buffett believes that the US is the best country, has the best economy and the best companies in the world and will continue to do so going forward. I would assume that most of us don't have such a strong feeling about the UK but we still as a nation love to go local! None of that is market timing.

Buffett isn't a market timer... he is just wrong

That’s true but “going local” with 5% of the world market cap isn’t quite the same as “going local” with 50% of the world market cap (or whatever S&P 500 makes up these days).  

In addition, part of the argument is that in the US regulatory oversight for securities is better than in most other jurisdictions.   Certainly true for Canada if not UK (we have issues because every province has its own rules), let alone emerging economies. 

Thrugelmir

Deleted_User said:

itwasntme001 said:

Deleted_User said:

Joey_Soap said:

pip895 said:

Joey_Soap said:

pip895 said:

Joey_Soap said:

To paraphrase Terry Smith on this he said something along the lines of "Nobody ever got poor by taking a profit, but the trouble is, nobody gets really rich by doing that either". In other words, keep the winners running. Nobody can time market tops or bottoms, another statement Mr Smith agrees with, so he says they (at Fundsmith) just don't try.

I think keeping winners running works much better when you are thinking about individual shares (what Terry Smith was talking about) rather than a bunch of market/mainly global trackers..

By definition, a tracker fund can never be a winner. It defies all logic.

I think you might be able to claim a US tracker was a winner against cash/bonds or even a UK tracker but I would still want to rebalance rather than let it become an ever increasing proportion of my portfolio.

Of course you can compare anything you like. Apples v bananas or SP500 tracker v UK building society accounts. The tracker wins. But it's a completely pointless "win".

Sorry, but I don’t think you know what you are talking about. Putting your money into S&P 500 is a legitimate investment strategy, recommended by John Bogle and Warren Buffet among others. S&P 500 returned 10% annually since inception in 1920s. I am too lazy to look but guessing it returned something like 15% annualised over the last 10 years.  That beats hands down pretty much any investment strategy, from value to other factors and beats world stock-market returns by about 5% a year.  ALso beats Warren Buffet’s own returns over the last 10 years. 

That’s not how I choose to invest (too risky to have everything in one country) but claiming that S&P 500 only ever beats building society = nonsense.

Its only ever legitimate if you are in the game of market timing.  Because whenever you chose to overweight a country or sector, or chose a managed fund or chose that single stock, you are market timing whether you plan to hold it for one day or ten years.  Broadly speaking, whenever you move away from how the globe allocates capital, you are in the business of market timing and that even means having 100% global market cap weight passive fund because the globe allocates only about 40% to public equities I believe.

Nothing wrong with market timing per se.  I personally hold many single stocks, managed funds etc.  But market timing it most certainly is.

Nope. The Warren Buffetts of this world recommend to put your money into S&P 500 and to leave it there. That’s not market timing in any way shape or form.  

The quote was made with the caveat of most people, in particular the average person. Very much directed at a US investor base. As would outperform US Treasury stocks. Certainly not directed at a global audience. 

Thrugelmir

Joey_Soap said:

Trackers cannot outperform the market they are tracking. 

Trackers in themselves are part of the market. Not detached from. 

itwasntme001

Prism said:

itwasntme001 said:

Deleted_User said:

“By putting all of your equity allocation into the S&P500 you are saying it will continue to outperform ...”

No. And even if one did, it still isn’t market timng as long as you stick with S&P 500. Here. Continue your argument with the dictionary. https://www.investopedia.com/terms/m/markettiming.asp

If you are buying just the S&P and not expecting it to outperform a global market cap index, why bother buying the S&P500 and instead just buy the global index?

Marketing timing has many definitions but in our context it is the act of buying something that will outperform.  It is a high conviction trade and with high conviction trades you know something better than the market does and that can only ever work until it does not and you won't know when it won't work any more.  Hence market timing.

Why do some many pension funds get invested in the FTSE 100? Why are there so many funds that 50/50 the FTSE all share? Why is the VLS range so popular with its 25% UK allocation. Its not always about performance. Maybe its the warm cuddly feeling people get from investing closer to home. Buffett believes that the US is the best country, has the best economy and the best companies in the world and will continue to do so going forward. I would assume that most of us don't have such a strong feeling about the UK but we still as a nation love to go local! None of that is market timing.

Buffett isn't a market timer... he is just wrong

It is what people do.  Thinking they have an edge and overweighting a particular country or sector.  Nothing wrong with doing that at all.  But the fact is as soon as you overweight something vs a global market allocation/index, you are taking a view and that means you ARE timing.  Buffet to Fundsmith and from you to me, we are all timing.  Its just that all our time frames are presumably long.  There will be a point to sell any asset you own because at some point it will start to underperform - BUT YOU WON'T KNOW WITH CERTAINTY WHEN THAT WILL BE.  If you take a 5 or 10 decade period, I think its mentioned only a small number of stocks contributed to the vast majority of returns.  If a stock picker or even region picker ends up missing some of those handful of stocks, you are probably gonna under-perform for a very long time.

Buffet is a market timer and he got the value vs growth strategy wrong because growth has outperformed for the last 10 year.  Not only that but he got his calls on airlines and Wells Fargo wrong to, he sold them after weak performance - that is essentially what market timing is.

Fundsmith has done very well over the last 10 years but he has a very concentrated portfolio.  How do you know whether he should have done better or not with such a concentrated portfolio?  Yes he has low drawdowns but that may not be the case if his trades become so crowded and he does not know when the right time to sell is.

itwasntme001

Deleted_User said:

“Marketing timing has many definitions but in our context it is the act of buying something that will outperform.  “

Again... No, but be my guest if you want to continue your argument with the dictionary. 

Its not even an official dictionary and market timing is a much broader concept than whatever some silly site says.

itwasntme001

There is a very fine line between "investing" and market timing.  The trick is not to kid yourself

[Deleted User]

No, Buffett is not a “market timer”.  He invests for the long term.  Nor would I bet against him.  He has achieved annual returns almost double of the index over 35 years, gaining thousands more percent over that period.   Of course, he has major advantages vs a retail investor.   10 years isn’t important. His advice and strategy have been consistent. 

itwasntme001

Deleted_User said:

No, Buffett is not a “market timer”.  He invests for the long term.  Nor would I bet against him.  He has achieved annual returns almost double of the index over 35 years, gaining thousands more percent over that period.   Of course, he has major advantages vs a retail investor.   10 years isn’t important. His advice and strategy have been consistent. 

To be a good investor, you need to be a good market timer.  Buffet has obviously done well for a long time.  It remains to be seen whether Berkshire will continue to.

He doesn't just invest in public equities where information is generally widely available (and therefore market timing becomes more important).  He also invests in private investments where he has an edge.