Scottish mortgage investment trust

muffster

Afternoon folks,
I've been researching for the correct type of investment to drip feed into and am lost in the number of choices out there.
Scottish Mortgage have marched on with impressive gains over the last few years, will this trend continue or will it run out of steam?
I'm looking at drip feeding in for a 5 year period rather than a lump sum.  Is this a good option or should i look elsewhere? 
Id appreciate your thoughts and opinions. 
Thanks. 

kinger101

It's high risk, so not really suited as an only investment.  Nobody really knows if the performance will continue in the future or not.  Statistically speaking, it's more likely it will have an average performance (reversion to the mean) than stellar performance.  Out of interest, why are you drip feeding?  This is likely to do worse than sticking in a lump sum.

eskbanker

Have you read the other current thread about this?

https://forums.moneysavingexpert.com/discussion/6248145/smt-investment/p1

However, nobody can really say whether this is 'the correct type of investment' or 'a good option' for you without more knowledge of what you're looking for - what's your rationale for looking at this one in particular?

Thrugelmir

Other funds are available with similar holdings but not the portfolio weighting towards Tesla. 

bd10

While I agree that SMT has delivered some rather spectacular returns over the past few years, I would extend my analysis of returns beyond the last years and take the 2000/02 and 2007/08 episodes. SMT took quite a beating on the way down. Whether Baillie Gifford will be able to pull it off again the years to come with another Tesla remains to be seen. However, US tech/lockdown/disrupter stocks are extremely valued and we have seen selling for the past two weeks. So I would be ultra-careful to extrapolate form the past few years SMT "smashed it" and also if this current selling turns into a proper bear market, then the cards are reshuffled and whether Tech/disrupters/current winners will be the winners again in the next 5 years remains to be seen.

Eyeful

No one has a crystal ball to see into the future, so your guess is as good as any ones!
SMT top holding is in Tesla, which almost everybody thinks is overvalued (PE ratio=934.30)
Just because it has done so well in the past does not mean it will continue, at some its share price will revert towards the mean.

If this is your first or only investment, first look at,   https://www.kroijer.com/
then consider these:- 
https://www.hsbc.co.uk/investments/isas/hsbc-global-strategy-portfolios/#balanced
https://www.vanguardinvestor.co.uk/investing-explained/what-are-lifestrategy-funds?intcmpgn=lifestrategyfunds_learnmore_link
 
If you still want a share, consider, an ETF like :
https://www.hl.co.uk/shares/shares-search-results/v/vanguard-ftse-all-world-ucits-etf-usd-dist
https://www.hl.co.uk/shares/shares-search-results/h/hsbc-etf-plc-msci-world-etf-gbp

Thrugelmir

bd10 said:

 Whether Baillie Gifford will be able to pull it off again the years to come with another Tesla remains to be seen.

Luck distinguishes between average performance and exceptional performance. BYD (for example) doesn't receive anything like the same level of interest from investors. 

valiant24

Thrugelmir said:

bd10 said:

 Whether Baillie Gifford will be able to pull it off again the years to come with another Tesla remains to be seen.

Luck distinguishes between average performance and exceptional performance. BYD (for example) doesn't receive anything like the same level of interest from investors. 

Please may you explain "BYD"?

Thrugelmir

valiant24 said:

Thrugelmir said:

bd10 said:

 Whether Baillie Gifford will be able to pull it off again the years to come with another Tesla remains to be seen.

Luck distinguishes between average performance and exceptional performance. BYD (for example) doesn't receive anything like the same level of interest from investors. 

Please may you explain "BYD"?

It's a large Chinese company. 

muffster

Thanks for the repliesThrugelmir said:

valiant24 said:

Thrugelmir said:

bd10 said:

 Whether Baillie Gifford will be able to pull it off again the years to come with another Tesla remains to be seen.

Luck distinguishes between average performance and exceptional performance. BYD (for example) doesn't receive anything like the same level of interest from investors. 

Please may you explain "BYD"?

It's a large Chinese company. 

Thrugelmir said:

valiant24 said:

Thrugelmir said:

bd10 said:

 Whether Baillie Gifford will be able to pull it off again the years to come with another Tesla remains to be seen.

Luck distinguishes between average performance and exceptional performance. BYD (for example) doesn't receive anything like the same level of interest from investors. 

Please may you explain "BYD"?

It's a large Chinese company. 

Thanks for the replies, i appreciate the comments.
So i initially looked at SMT as it seemed like a sensible decision amongst the vast choice out there. I am a bit lost to be perfectly honest. Not a good strategy i know. 
I intended to drip feed as i was led to believe that pound cost averaging is a sensible approach. I did begin to wonder about Tesla and some of the other tech stocks, how popular is tech going to be as we come out of lockdown, i also think the L&G index might suffer the same fate. Perhaps i need a rethink!

Alexland

Drip feeding is good as it averages out your buy price but generally people would do better making a lump sum investment at the start (otherwise people would keep withdrawing it to drip feed it back in again..) but within that average better result there will be people that have bought at the top or bottom of the market getting a very different investment result. Even if you did drip feed the investment might crash the day after you complete the process so generally it's just best to invest the money when you have it available (if you have the guts) keeping some cash for short term needs and many of us drip feed because that's the rate we earn the money doing our jobs.

In terms of SMT it's not really a sensible core investment as it's very concentrated into a certain investment style which might seem very compelling when it keeps going up might be less attractive in different market conditions. I wouldn't suggest anyone would want more than 10% of their portfolio invested in this or anything similar.