Stocks and shares ISA - Stick or twist?

daveyjp

All down to what investments are held.  Just checked my S&S ISA and it has returned just shy of 8% over the last two years.

susansue

Eskbanker   Thank you for the graph. I suspect that it would look different if adjusted for inflation over the same period!

eskbanker

susansue said:

Eskbanker   Thank you for the graph. I suspect that it would look different if adjusted for inflation over the same period!

Absolutely - if your benchmark is inflation-adjusted performance then you'd need to invest for significantly longer to gets the odds working in your favour!

j_netprofit

susansue said:

I have a fully managed fund, for which I pay an appreciable fee.

I hope that this makes sense.

If you don't mind me asking, how much are they charging you for the privilege?

And I agree with the OP, I would also call this mismanagement! 

dunstonh

And I agree with the OP, I would also call this mismanagement! 

So, where is the mismanagement?   Neither the OP or you have said.     You can call it chocolate if you want but it doesn't make it chocolate.

j_netprofit

If I was paying for active management I'd expect positive results. OP is effectively paying someone to lose their money. IMO the fund manager is incompetent. 

I understand that this is a long term investment and the graph eskbanker posted completely makes sense to me. But if I was paying a professional I'd expect results, good results! 

Perhaps my naivety, still being wet behind the ears...or maybe devils advocate. 

dunstonh

If I was paying for active management I'd expect positive results. OP is effectively paying someone to lose their money. IMO the fund manager is incompetent. 

So, you are blaming Nutmeg for Russia invading Ukraine, the BoE turning off QE, the energy crisis and the rise in inflation?

The OP still hasn't told us what they are invested in.   The suspicion is that it is a portfolio heavy in gilts and bonds.   So, with gilts and bonds having suffered their period of loss in over 100 years, how is that Nutmeg's fault?

I understand that this is a long term investment and the graph eskbanker posted completely makes sense to me. But if I was paying a professional I'd expect results, good results! 

As you say, it is a long term investment.    The OP is 2 years in.   So, not even close to long term yet.

2000,2001 & 2002 gave us three negative years in a row.   The last 2 years have been mild by comparison.

Perhaps my naivety, still being wet behind the ears...or maybe devils advocate. 

I suspect naivety because there is nothing to play devil's advocate here.   It would either be naivety or trolling.

j_netprofit

dunstonh said:

So, you are blaming Nutmeg for Russia invading Ukraine, the BoE turning off QE, the energy crisis and the rise in inflation?

how is that Nutmeg's fault?

They're charging for active management! That is how it's their fault! 

OP is/was clearly on a sinking ship. Why can't Nutmeg advise the customer they're switching the chosen investments. It's in everyones best interest.

Say they are in Gilts/Bonds and taking a hammering, why on earth sit there and take it? I'd expect a call off my fund manager explaining and suggesting something, switch to something simple as a global index tracker?! 

dunstonh said:

I suspect naivety because there is nothing to play devil's advocate here.   It would either be naivety or trolling.

   

dunstonh

They're charging for active management! That is how it's their fault! 

No logic in that I'm afraid.  If an asset class goes down, then it goes down.  If a country's stockmarket goes down, then it goes down.   Active management cannot change that.

OP is/was clearly on a sinking ship. Why can't Nutmeg advise the customer they're switching the chosen investments. It's in everyones best interest.

Closing your eyes and punching through short-term negative periods without doing anything silly (such as trying to chase returns) is nearly always the best option.

Say they are in Gilts/Bonds and taking a hammering, why on earth sit there and take it?

Gilts/bonds started falling around November 2021.   By July 2022 many thought that was it.  It turned out it wasn't as the energy crisis got worse.    Then the BoE decided to turn off QE the day before Liz Truss's budget.  With fiscal policy and monetary policy going in opposite directions, the markets hated it.    Higher inflation lasted for longer than everyone expected.  Throughout much of 2022 and 2023 it was a case of markets thinking we had hit the high point one month and then thinking there was still more to go the next.   In late Nov into Dec 23, there was a bounce on gilts/bonds.  However, 2024 has unwound that bounce.

Yet you expect all that to be predicted in advance?

 I'd expect a call off my fund manager explaining and suggesting something, switch to something simple as a global index tracker?! 

If you are expecting a fund manager to call you then that means you would be paying more than the OP by having a discretionary investment manager.  The OP is paying for a fund manager.

And a discretionary fund manager telling you to go up the risk scale would likely be a missale.  Especially when the stock markets crash and the value falls 40% making the much smaller loss on a lower risk portfolio seem tiny by comparison.

hmmm, maybe closer to trolling than naivety

Albermarle

jay_ftw said:

dunstonh said:

So, you are blaming Nutmeg for Russia invading Ukraine, the BoE turning off QE, the energy crisis and the rise in inflation?

how is that Nutmeg's fault?

They're charging for active management! That is how it's their fault! 

OP is/was clearly on a sinking ship. Why can't Nutmeg advise the customer they're switching the chosen investments. It's in everyones best interest.

Say they are in Gilts/Bonds and taking a hammering, why on earth sit there and take it? I'd expect a call off my fund manager explaining and suggesting something, switch to something simple as a global index tracker?! 

dunstonh said:

I suspect naivety because there is nothing to play devil's advocate here.   It would either be naivety or trolling.

   

The bit you are missing is that Nutmeg ask you questions, to see what kind of investor you are, and what your objectives are.
So lets say you are moderately risk averse and do not want anything too racy, so are put in a medium/low risk fund around 40% equity and 60 % bonds/other.
Bonds have a bit of a bad time so Nutmeg manager decides to change you to a 100% global equity index tracker ( as you suggest they should do in this circumstance)
Stock market rises 10% so all good, and then crashes 40%.
Nutmeg have to explain to client why having been told the client is risk averse, that they invested their money in a high risk investment that has lost 30%.

If I was paying for active management I'd expect positive results.

Or someone who was risk averse, might pay for active management to minimise losses in a downturn.