After managing my own investments for 20 years i'm finding it to time consuming doing all the DD.

Diplodicus

Albermarle said:

VLS60 has returned 15% over the last year. That seems a fair benchmark

Looking over one year is too short , especially considering during 2020 when the investments went down and then back , but all at different rates . I was comparing some active UK based funds last week ( not trackers ) and the difference in one year performance was huge . From about 15% to 90% . However the 90% one ( small companies )  had dived dramatically in the Covid crash and had not really started to recover until the Summer.

VLS 60 3 and 5 year annualised results were around 7.5%, which I think could be more used as a benchmark.

Incidentally their main competitor HSBC Global Strategy balanced was 8 to 8.5% 

Well, it is interesting. Investing in a fund takes off some individual share risk. But at what cost?

 https://companiesmarketcap.com/

Over the last 12 months, the dozen largest corporations returned an average of +31% .
Not counting dividends.

It's not like your fund manager has to burn the lamp: - these companies are in plain sight!

Notepad_Phil

Diplodicus said:

If you wish to manage your own investments for the next twenty years, there is a strong argument for investing in individual shares. The scare of losing your investment is entirely overblown with household names. Some would say funds carry more risk:- Woodford again cited.

Between individual shares and index trackers I know where I'd put the bulk of my investments - hint, it's not individual shares.

If someone has the time to really understand the companies that they are investing in then a basket of individual shares may be suitable. But I really doubt that the OP is such a person or indeed 99% of the investing public. I know that I'm not and I've been interested in financial and business matters for the last 45 years - I've seen too many high flying companies that have taken a sudden nose dive to think that I won't be caught out if I decided to invest in them individually.

Diplodicus

Notepad_Phil said:

Diplodicus said:

If you wish to manage your own investments for the next twenty years, there is a strong argument for investing in individual shares. The scare of losing your investment is entirely overblown with household names. Some would say funds carry more risk:- Woodford again cited.

Between individual shares and index trackers I know where I'd put the bulk of my investments - hint, it's not individual shares.

If someone has the time to really understand the companies that they are investing in then a basket of individual shares may be suitable. But I really doubt that the OP is such a person or indeed 99% of the investing public. I know that I'm not and I've been interested in financial and business matters for the last 45 years - I've seen too many high flying companies that have taken a sudden nose dive to think that I won't be caught out if I decided to invest in them individually.

https://companiesmarketcap.com/

You think investing in a number of funds would prove safer (and more profitable) than investing in the top dozen companies in the world by market cap?

The evidence may say no. But I get that for a strong contingent of investors, getting the same as everyone else is a priority. 
Trouble is, that sort of safeguarding comes at a cost.

Notepad_Phil

Diplodicus said:

Notepad_Phil said:

Diplodicus said:

If you wish to manage your own investments for the next twenty years, there is a strong argument for investing in individual shares. The scare of losing your investment is entirely overblown with household names. Some would say funds carry more risk:- Woodford again cited.

Between individual shares and index trackers I know where I'd put the bulk of my investments - hint, it's not individual shares.

If someone has the time to really understand the companies that they are investing in then a basket of individual shares may be suitable. But I really doubt that the OP is such a person or indeed 99% of the investing public. I know that I'm not and I've been interested in financial and business matters for the last 45 years - I've seen too many high flying companies that have taken a sudden nose dive to think that I won't be caught out if I decided to invest in them individually.

https://companiesmarketcap.com/

You think investing in a number of funds would prove safer (and more profitable) than investing in the top dozen companies in the world by market cap?

The evidence may say no. But I get that for a strong contingent of investors, getting the same as everyone else is a priority. 
Trouble is, that sort of safeguarding comes at a cost.

And when do you decide to sell any/all of those companies? They make the top dozen now, they didn't 10 years ago and they probably won't in 10 years time either (though no doubt some will still be there). Which ones do you think will definitely be in the top dozen 10 years from now and why? I'd also like to see your evidence of stock picking being better than index tracking for the average person.

Diplodicus

Notepad_Phil said:

Diplodicus said:

Notepad_Phil said:

Diplodicus said:

If you wish to manage your own investments for the next twenty years, there is a strong argument for investing in individual shares. The scare of losing your investment is entirely overblown with household names. Some would say funds carry more risk:- Woodford again cited.

Between individual shares and index trackers I know where I'd put the bulk of my investments - hint, it's not individual shares.

If someone has the time to really understand the companies that they are investing in then a basket of individual shares may be suitable. But I really doubt that the OP is such a person or indeed 99% of the investing public. I know that I'm not and I've been interested in financial and business matters for the last 45 years - I've seen too many high flying companies that have taken a sudden nose dive to think that I won't be caught out if I decided to invest in them individually.

https://companiesmarketcap.com/

You think investing in a number of funds would prove safer (and more profitable) than investing in the top dozen companies in the world by market cap?

The evidence may say no. But I get that for a strong contingent of investors, getting the same as everyone else is a priority. 
Trouble is, that sort of safeguarding comes at a cost.

And when do you decide to sell any/all of those companies? They make the top dozen now, they didn't 10 years ago and they probably won't in 10 years time either. Which ones do you think will definitely be in the top dozen 10 years from now and why? I'd also like to see your evidence of stock picking being better than index tracking for the average person.

It would be unfair to track the10 year performance of the 10 best biggest caps today; clearly they would crush most funds.


But what about the 10 largest companies of 10 years ago? How would the investor have fared in the last decade, against funds?

 https://money.cnn.com/magazines/fortune/fortune500/2011/performers/companies/biggest/

Maths to follow..

Thrugelmir

Diplodicus said:

Notepad_Phil said:

Diplodicus said:

If you wish to manage your own investments for the next twenty years, there is a strong argument for investing in individual shares. The scare of losing your investment is entirely overblown with household names. Some would say funds carry more risk:- Woodford again cited.

Between individual shares and index trackers I know where I'd put the bulk of my investments - hint, it's not individual shares.

If someone has the time to really understand the companies that they are investing in then a basket of individual shares may be suitable. But I really doubt that the OP is such a person or indeed 99% of the investing public. I know that I'm not and I've been interested in financial and business matters for the last 45 years - I've seen too many high flying companies that have taken a sudden nose dive to think that I won't be caught out if I decided to invest in them individually.

https://companiesmarketcap.com/

You think investing in a number of funds would prove safer (and more profitable) than investing in the top dozen companies in the world by market cap?

With that approach a decade ago your largest holding would have been Exxon. Now ranked 23rd in the S&P 500. 

Diplodicus

So, basically, in sterling terms, an investment in the 10 largest world corporations of 2011 would have quadrupled. Not counting dividends.

Please note wildly divergent returns among those ten:- Exxon, GE and IBM are worth less than they were ten years ago.

Strikes me as a good benchmark overall.

Good luck to you if your investment strategy has bettered that, long term.

How does your 20 year performance rate, chrisinchina?

Notepad_Phil

Diplodicus said:

So, basically, in sterling terms, an investment in the 10 largest world corporations of 2011 would have quadrupled. Not counting dividends.

Please note wildly divergent returns among those ten:- Exxon, GE and IBM are worth less than they were ten years ago.

Strikes me as a good benchmark overall.

Good luck to you if your investment strategy has bettered that, long term.

How does your 20 year performance rate, chrisinchina?

So not a bad return over 10 years but given they were all US companies then what was the wider US index return over the last 10 years (to Friday's close).

A quick look at Yahoo historical data would indicate that in $ terms the NASDAQ Composite has risen 6 times, the S&P 500 about 4 times, the Russell 3000 near to 5 times whilst even the pedestrian Dow has risen over 3 times (all these I believe do not count dividends) - which given that the £ has fallen against the $ over those 10 years means they are underestimates when you talk about sterling terms.

I'll give you that 10 years ago there might not have been the trackers available here in the UK to invest in these indexes, but there are plenty of trackers available now at low cost, so why wouldn't you use them given that you're not placing your money on just the top 10 and their continued dominance and indeed outperformance.

ps my money isn't just in the US markets, I've got money in the UK markets, European markets, Pacific markets, emerging markets, etc, etc, as I've no idea where the leading companies of tomorrow will come from as I've no idea whether the next 10 years will resemble the last 10 (in many ways I hope they won't).

Thrugelmir

Diplodicus said:

So, basically, in sterling terms, an investment in the 10 largest world corporations of 2011 would have quadrupled. Not counting dividends.

Please note wildly divergent returns among those ten:- Exxon, GE and IBM are worth less than they were ten years ago.

Strikes me as a good benchmark overall.

Good luck to you if your investment strategy has bettered that, long term.

How does your 20 year performance rate, chrisinchina?

Trouble is we cannot invest using hindsight........ only foresight.  Will the next decade be the same? Apple is unlikely to invent another iPhone. 

dunstonh

The last cycle has seen the US be the standout area to invest.    The cycle prior to that was one of the worst places to invest.    It is unusual for the best area in one cycle to be the best in the next.      You cannot look backwards, only forwards.