Any way to try and claw back my bad investment choices/don't laugh please.

OldScientist

Universidad said:

hachiman_2 said:

do I just learn from the experience?

Don't learn the wrong lesson from the experience.

The truth is that nobody knows what happens next when something goes up, and nobody knows what happens next when something goes down. But the one sure thing is that if you sell after something went down, you have crystalised that loss, and your fortunes then depend on whether your next set of choices perform well. 

Past performance is not necessarily an indicator of future performance, but it has always surprised me that among the people who believe it is, the first bit of performance they tend to ignore is their own.

The "right" thing to do is probably to pick an investment strategy that suits your appetite for risk, and then not think too much about the day to day amounts - don't try to guess the market, better people than us fail every day.

I agree with everything you say, except I'd like to add to your point "But the one sure thing is that if you sell after something went down, you have crystallised that loss, and your fortunes then depend on whether your next set of choices perform well. "

Where you have already suffered a loss, your future returns depend on any choice, including the choice not to sell (i.e., doing nothing is still a choice).

Sorry for being a bit pedantic.

OldScientist

As others have said, more funds doesn't necessarily mean more diversity - that depends on the underlying investments in each of the funds.

For example, if Fund 1 is a global equity index fund, replacing it with Funds 2, 3 and 4 (a UK index, a European index, and a Japan index) has decreased the geographical diversity (since large chunks of global stock markets have been omitted) not increased it.

I should note that this is coming from someone who once had 13 different funds in their portfolio (after a period of simplification, currently down to 4, where it will probably stay - well, 5 if you include cash). Each fund was making its own tiny, carefully thought out, contribution to returns that, in the end, added up to overall returns that were close to the global market.

Altior

Sub optimal, but completely psychological, I got a bad beat on one of my pension pots. So whilst money market dividends are decent I decided to claw back my losses that way, and carried on investing in the original funds at the cheaper prices. It's sub optimal as it doesn't cover for inflation but no longer see red numbers when accessing that particular platform. 

The saying goes never catch a falling knife, however if the fund still has a strong buy case then it is even stronger at discounted prices. Plus, the base effect is your friend. Clawing the initial losses back via MMF was just my way of dealing with the bad luck (as once in a century event, so we're told!).

Universidad

Altior said:

once in a century event, so we're told!

Problem is a lot of things happen once in a century, and the closer I get to living through one, the more of them I've seen!

Mozza001

mebu60 said:

We've all been there. Bailed out of USA due to toxic combination of Trump and Covid. I had been overweight and done really well out of USA up until then which also influenced my decision. Alternate investments have done ok but would be £10s of k better off had I stuck with USA. Them's the breaks kid :-(   

You bailed out of the US because you didnt like Trump?

Wasnt the market really booming up until Covid during his 4 years?

Im pretty sure my pot jumped considerably during his reign, not saying it was down to him personally.

cfw1994

MetaPhysical said:

Oftentimes, one of the most important things to do is to do nothing.

Indeed…..many companies have pointed out the best investors are dead people!
Buy the world, as cheap as you can, and leave it - https://kroijer.com - feels reasonable. 🤷‍♂️

atush

If you are happier with Fund A, then put future contributions to this fund if you like.  Changing Funds BCD will just crystalize your loss, so you can leave them be.

MeteredOut

atush said:

If you are happier with Fund A, then put future contributions to this fund if you like.  Changing Funds BCD will just crystalize your loss, so you can leave them be.

There's a counter-argument (that introduces a bit of a paradox) that if you think Fund A will deliver better returns than Funds B, C and D, then you should crystalized your losses and put it all in Fund A. And if you don't believe that Fund A will deliver better returns, why are you remaining invested in it?

Always need to take having what you consider as an appropriate level of diversification into account too, obviously.

Bostonerimus1

I've been putting money into a simple equity and bond index portfolio since the late 1980s and so I've been through several crashes and for short periods lost up to half of my peak invested value. That's scary and at those times it's good to haver some rules to follow. My rules were basically:

1) Only invest in broad market indexes with low fees. In that way my portfolio would follow the overall economy and not be decimated by a catastrophic failure in once company, focused active fund or sector.
2) Put +/- 5% guard rails on my allocations and rebalance when they go outside the guard rails. This made me sell bonds and buy equities during stock crashed like 2008-2009. The price of the funds I bought then have gone up at least six fold.
3) Don't mess with investments or worry too much, doing 2) made that easier.