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ChainsawCharlie

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Linton

Investing in SMT as part of a well diverified portfolio was not of itself a big mistake.  Investing too high a % would be, but your 5% is near to irrelevent and I would say any smaller % in anything would not be worth the effort.  So as long as your 95% isnt invested in similar funds to SMT recent market moves do not indicate any reason to sell.

SMT fell 60% between May and November 2008 but reached a new high 2 years later.  That is the nature of the fund.

Baillie Gifford should not and almost certainly will not change the remit or style of their fund just because of what in future years may be seen as a minor blip.  If they do change the nature of the fund then you should certainly reconsider whether to continue holding it since it would no longer be satisfying your objectives for buying it in the first place.

There may even be a reason to buy more SMT to bring it back to 5%.

Thrugelmir

What purpose does SMT perform in your retirement portfolio?  The odds of finding another "Tesla" are extremely low.  Even if they do, are you prepared to wait another 15-20 years for the rewards. 

dunstonh

Question is, was SMT a big mistake, given their Tesla sell off, and Modern plus Chinese situation, are SMT likely to recover over the next 10 years, or are they likely just to leave the fund invested as is and hope for the best.

SMT is a very high risk investment.    That means it will be subject to high levels of volatility during negative markets.

One assumes you knew this when you bought it.  So, has anything changed?

BG funds, in particular, tend to have periods of outperformance followed by underperformance when cycles change.

Thrugelmir

ChainsawCharlie said:

Thrugelmir said:

What purpose does SMT perform in your retirement portfolio?  The odds of finding another "Tesla" are extremely low.  Even if they do, are you prepared to wait another 15-20 years for the rewards. 

Was added to my portfolio by my now sacked IFA he knew we had a 5/10 risk profile and thought SMT would be good investment (ombudsman investigating) 

Then you might as well sell the holding and buy something more mainstream. I'd never buy such an investment without having a close look at what's inside the tin. Buying on name alone without performing due diligence/research alone is an easy way of losing money. 

masonic

From what I remember of discussions in your previous thread, it was a little more than rebalancing that was warranted, perhaps ripping it up and starting afresh? There was a lot of valuable information in your thread entitled 'Bonds'. All still relevant. Working towards owning fewer funds should be an objective, so not replacing SMT with something new would be a step in the right direction.

Thrugelmir

ChainsawCharlie said:

Thrugelmir said:

Then you might as well sell the holding and buy something more mainstream. I'd never buy such an investment without having a close look at what's inside the tin. Buying on name alone without performing due diligence/research alone is an easy way of losing money. 

Yes looking in the tin I stupidly trusted a chartered IFA with

Impossible for anyone to predict the future when it comes to investments. Portfolios need to viewed as whole. Not individual pots. Some investments will rise, some fall and some remain unchanged. The real art is to be up whatever the weather. On many occcasions I've bought an individual share and it's subsequently fallen by 10%. If the fundamentals still hold as to why I purchased the Company's shares originally. I'll often buy more and end up with a sizable holding. Nothing better than a share people ignore for no good reason. 

Linton

ChainsawCharlie said:

I could do with rebalancing portfolio.  Any idea what would be a good bond to invest in, for the next 10 years, now I have sold SMT

In my view the outlook for safe bonds for the next few years is poor given the unwinding of the post 2008 very low interest rates/high bond prices. Personally I would not buy them.   If you must go for gilts or similar then I would suggest short term ones, but do not expect the returns to be any better than those for fixed rate cash.  If the 10 years is a real deadline you might consider medium duration bonds but be prepared for some volatility. Unsafe bonds is more of a niche area.

Where you should put your money depends on two things, neither of which we know,,...

1) What else you are invested in
2) Your timescale/objectives.

Individual investments dont matter much, it is the overall picture that is important.  If your 95% is properly structured I would suggest more of the same rather than somewhere to put <5%.  If it isnt getting it sorted is more of a priority.

masonic

ChainsawCharlie said:

masonic said:

From what I remember of discussions in your previous thread, it was a little more than rebalancing that was warranted, perhaps ripping it up and starting afresh? There was a lot of valuable information in your thread entitled 'Bonds'. All still relevant. Working towards owning fewer funds should be an objective, so not replacing SMT with something new would be a step in the right direction.

Yes, understood, but at the moment I am heavily into funds which have morningstar risk level of 6/7 and was looking at a way of reducing the risk slightly, without selling down the whole portfolio and crystallising my loses as much as ppssible

The problem is you've created a hostage to fortune by selling this holding with no clear view yet as to your direction of travel. Now you must decide to either sit in cash with the opportunity cost should the market pick up, or invest in something else that will likely need to be sold when you formulate a coherent plan. Meanwhile, as Linton has alluded, 95% of your portfolio is still flapping in the wind.

The crystallisation of loss argument isn't really relevant if you are merely switching between investments. Moving from higher risk to relatively lower risk may involve some element of locking in of greater losses, but it also represents a move from inappropriate to appropriate. I'd suggest that could be beneficial, as the risk of hanging on to the higher risk investments is that they will continue to fall faster should this correction deepen into a crash.

Morningstar risk level is a very crude instrument and focusing in on individual holdings in isolation is perhaps not the best way to assess how to take action.

Thrugelmir

ChainsawCharlie said:

masonic said:

From what I remember of discussions in your previous thread, it was a little more than rebalancing that was warranted, perhaps ripping it up and starting afresh? There was a lot of valuable information in your thread entitled 'Bonds'. All still relevant. Working towards owning fewer funds should be an objective, so not replacing SMT with something new would be a step in the right direction.

Yes, understood, but at the moment I am heavily into funds which have morningstar risk level of 6/7 and was looking at a way of reducing the risk slightly, without selling down the whole portfolio and crystallising my loses as much as ppssible

As an investor accepting a loss is something you need to learn to cope with. Read any book on the psychology of investing and loss aversion will be covered. A common trait of DIY investors is hanging onto poorly performing investments. In the belief that the investment will recover and shine again. Nor let cash burn a hole in your pocket . Take time to consider your options. 

eskbanker

ChainsawCharlie said:

what you see below is 100,000 invested across these funds

But in what proportions?  A simple list of holdings doesn't really illustrate the structure of a portfolio without weightings....