Could you please look at my investment plan for the forthcoming financial year and provide feedback

ivormonee

Thrugelmir said:

Most investment discussion relates to the past. Unfortunately hindsight isn't always the best guidance for the future. 

Is hindsight partial or any use as guidance for the future or should past performance be ignored? If so, what information do people have available to rely on in making their future based investment decisions such as around which funds to pick etc.?

Thrugelmir

ivormonee said:

Thrugelmir said:

Most investment discussion relates to the past. Unfortunately hindsight isn't always the best guidance for the future. 

Is hindsight partial or any use as guidance for the future or should past performance be ignored? If so, what information do people have available to rely on in making their future based investment decisions such as around which funds to pick etc.?

There's no shortage of information for one to consume as an investor in order to make informed choices. The biggest challenge for those that do attempt to manage their own affairs is time. As events move far quicker than people realise. 

TheAble

ivormonee said:

Thrugelmir said:

Most investment discussion relates to the past. Unfortunately hindsight isn't always the best guidance for the future. 

Is hindsight partial or any use as guidance for the future or should past performance be ignored? If so, what information do people have available to rely on in making their future based investment decisions such as around which funds to pick etc.?

Having the right philosophy is what counts, but this can take a long time to learn. Much more important than looking at past performance etc. JL Collins' "Stock Series" (available free online) is valuable reading if you're just starting out.

ivormonee

Sure, but what use is past performance? These statistics (past performance) are widely published everywhere - on the fund managers' websites, on their factsheets, on all the platforms, on independent sites like Trustnet and Morningstar, on "best buy/ recommended fund" lists (eg. Hargreaves Lansdown "wealth" list etc.), and as the basis of articles in financial journalism. I'd go so far as to say that past performance is the most considered piece of information when making comparisons between funds.

Therefore, if past performance is not to serve as any guide, that can be relied on in any constructive and reliable way, then why is it the most prominent and widely used method of comparison and even the basis of recommendation?

AlanP_2

I don't think you will be a million miles away whether you stuck with your current investments or went the new choices.

The main thing in your benefit is the capacity to invesdt, many people do not have that luxury.

Whether you get 5 or 5.5% annualisded returns will make a difference in £s but not enougth to impact your quality of life that much.

I like BG Managed and am currently adding to it, we also use HSBC Global Balanced but I haven't looked at the others. 

Final point, just remember you are starting today from a market high as opposed to someone starting in 2008 say so you won't get the same returns (probably!).

Eco_Miser

ivormonee said:

Sure, but what use is past performance? These statistics (past performance) are widely published everywhere - on the fund managers' websites, on their factsheets, on all the platforms, on independent sites like Trustnet and Morningstar, on "best buy/ recommended fund" lists (eg. Hargreaves Lansdown "wealth" list etc.), and as the basis of articles in financial journalism. I'd go so far as to say that past performance is the most considered piece of information when making comparisons between funds.

Therefore, if past performance is not to serve as any guide, that can be relied on in any constructive and reliable way, then why is it the most prominent and widely used method of comparison and even the basis of recommendation?

Because it's the only thing we've got, part from a tiny bit of foreknowledge about plans for the future (which may never actually happen).

If a share has tripled over each of the last five years, there's a chance it will keep going up, but not by as much (but it could go back to where it started or lower).

If a share has dropped over each of the last five years, there's a good chance it will keep dropping (but it could do a Game Stop).

If a share has chugged along throwing off a 5% real dividend each of the last fifty years, there's a good chance it will keep throwing off those 5% dividends (but it's market may be about to collapse).

So each investor looks at all the data about a company (or a fund), considers how like the past the future is likely to be for it, then tosses a coin and buys or sells.