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

[Deleted User]

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.  

Doing this does concentrate your investment in half the world cap at the expense of the other half but it has nothing to do with timing. 

garmeg

Prism said:

garmeg said:

Prism 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.

Yup, its about 15.5% for a UK investor in GBP and around 13.5% in USD. On a side note, it has been quite difficult for a UK investor to invest specifically in the S&P 500 over the last 10 years. There is only one fund which was launched at the end of 2014. There are several ETFs but these were not available in your typical investment platform from 10 years back. The modern ones allow access to ETFs but there are still a bunch of platforms that still don't allow access to ETFs.

North America or US seems the only option for many, which is probably better anyway.

What is the only fund for the S&P? Thanks.

UBS S&P 500 Index fund

Thank you.

EDIT: Wow, cheap too - OCF = 0.09%

itwasntme001

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.  

Doing this does concentrate your investment in half the world cap at the expense of the other half but it has nothing to do with timing. 

It has everything to do with timing.  By putting all of your equity allocation into the S&P500 you are saying it will continue to outperform (it has to outperform given you are making such a bet) everything else until you decide to sell (=market timing).  No market has ever continue to outperform thus far so how do you know it will continue to outperform during the time you plan to hold it, whether that is 10 years or until you die?

By putting your allocation into a global passive fund market weighted, you are buying into the global public equities and capturing what the market thinks will do well and so you can never be wrong because the fund is self-correcting automatically all the time.

Just because Buffett says something does not make him correct.  He has had made many mistakes and a lot of his performance is attributable to when he started - how much is luck and how much is skill is very hard to disentangle.

[Deleted User]

“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

itwasntme001

Deleted_User said:

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

No. 

Then why bother with investing in it?

garmeg

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. 

Then why bother with investing in it?

Diversification?

itwasntme001

garmeg 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. 

Then why bother with investing in it?

Diversification?

How on earth is investing in the S&P500 diversification?  It may have much of its revenues generating globally, but that is not the same as being diversified.

itwasntme001

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.

[Deleted User]

“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. 

Joey_Soap

Trackers track the market. Trackers cannot outperform the market they are tracking. Trackers will slightly underperform the market they are tracking due to the costs (admittedly low, but real) headwind.

No more from me on this since the responses to my points aren't appropriate.