Challenge to Financial Advisers

masonic

daimes said:

I'll put a smile on my face when I have something to smile about.

If you are correct in what you have said, you've discovered a superior investment strategy. That ought to put a smile on your face. It's almost as if you don't believe it yourself.

Aminatidi

Funny thing is if I thought I'd discovered a superior investment strategy I'd be quietly getting rich rather than challenging IFAs to show they can do better.

Prism

To make this a better example I would suggest looking at multiple 10 year time frames that start and end at different points. A single 10 year period that always ends today is always going to be heavily influenced by anything that has done well recently. For example, the period 2000-2009, and 2005 to 2014 is just as important as 2014 to 2023. 

It takes a lot more work to do this, especially since many funds don't actually exist across all of the time periods. However it is a far more useful exercise than picking a bunch of funds today that happen to have done well over the last 10 years in combination. Especially if nobody would have likely selected those funds 10 years ago based on their previous performance.

Aminatidi

Worth remembering as well that the role of an IFA isn't to out perform.

And I say that was someone who thinks IFAs have their place but who's also quite cynical about whether most people would benefit from using one.

Qyburn

daimes said:

In my search for well managed funds I came across a very small number of really good fund managers. These were always global equity managers who somehow seem to be able to use a rifle with great accuracy while their counterparts used a shotgun with, well let's say, less accuracy.

Are you a fan of actively managed funds? General opinion on here seems to be that they don't out perform passive index funds. But normally that's stated as dogma, or in general terms like "90% of active funds don't perform" with nobody speaking up for active. 

Would you like to name an actively managed global equity fund that disproved that view iver say the previous 10 years?

enthusiasticsaver

I think you have misunderstood the role of a financial advisor.  The whole point is they tailor portfolios to the individual according to their circumstances and aim to get the best return for their particular attititude to risk and  price volatility.  

Some of the OP responses have been quite rude so I will be asking for this thread to be shut down if posts are not polite. 

Aegis

Here's my satellite portfolio performance over the last 10 years:

https://paste.pics/QG20E

Volatility since 12/07/2013 is 12.09% p/a, performance is 278.71%. Maximum allocation to any one fund is 6.25%. Minimum performance within the portfolio is 55.43%, maximum is 878.85%. So if I wanted to build a portfolio that outperformed yours, I'd just stick everything into that one fund, and the historic data would show massive outperformance. But this would be grossly irresponsible in terms of investment strategy.

The satellite portfolio is diversified, but it is in isolation far higher risk than anyone should hold without the core portfolio that goes alongside it, and the standard figures of maximum drawdown and volatility do not capture the totality of risk for a highly concentrated portfolio.

Swipe

Sometimes I wish there was a way to hide a certain thread from the forum

artyboy

Swipe said:

Sometimes I wish there was a way to hide a certain thread from the forum

There is, just start a rambling side discussion about house prices and it will be gone in no time 

Albermarle

LHW99 said:

One could say that the South Sea Company, Tulips and steam railways were the best investments of their time - until they weren't. I suspect that even the big 7 won't persist to eternity, and no-one's crystal ball is good enough to predict when the tide wil turn.

The problem is that what used to take 100 years now takes decades at most, and the rise of new companies that sweep out the old because they exploit unknown (for now) niches is less and less predictable. Back in the 70's analogue computers (basically a lot of wires knitted into a whole lot of sockets) were still availible, but unused. They "won the war" but barely 25 years later were obsolete. Changes happen faster than that now.

Electronic technology may be the future (in some form), or perhaps memory size and computer power will be sufficient to make Google (at least in its present form) unnecessary, because people will be able to access and search information without the need for an intermediary service.

If you are old enough to remember Tomorrow's World on TV, you would remember that almost all the futuristic items shown never lasted.

Using the sh0tgun analogy - on the whole people don't go after clays successfully with a r1fle.

One could say that the South Sea Company, Tulips and steam railways were the best investments of their time - until they weren't. I suspect that even the big 7 won't persist to eternity, and no-one's crystal ball is good enough to predict when the tide wil turn.

I have just been reading a comparison between Nvidia and Cisco in 1999.
In both cases their share price went up 7 fold in less than 2 years. Then in 18 months Cisco shares went down 86%.
Maybe this time is different......

To be fair the Magnificent 7 have a lot more solid financials than some of the internet stocks of 1999, so a full blown rout of Alphabet, Apple etc seems unlikely.