Strategy for an amateur, other than sticking everything in a diverse index fund?

EdSwippet

Hoenir said:

EdSwippet said:

Hoenir said:

EdSwippet said:

Hoenir said:

For fun you could run a dummy portfolio and see how your decisions pan out. 

Not really recommended. The danger is that you get lucky, attribute luck to skill, and then go on to put real money into that portfolio ... until luck runs out.

That depends on how seriously you approach the task. ...

I've been seriously flipping a coin for five minutes now, but failed to get ten heads in a row. I guess I need to increase my seriousness.

Why would you want to endlessly flip investments. Utterly pointless activity. 

It's like conversing with a slightly deranged AI system. Ah, Thrugelmir, how I've missed you! 

dannybbb

@Eyeful thanks fir the reply. i may live that long but my concern really is that the 80k ive put in  last year isnt making huge amounts and would still make some in less risky bonds so im just thinking in the balance of risk and reward it might be best to go for less risky assets for the next year so that best case i can reinvest when things crash and worst case i lose a few % for a year.

And in terms of getting rich slowly, I feel at 50 that its too late.  Seeing my parents at  in their 70's and 80's I cant help thinking I wont need as much money and should use what i have to try take a step back from the lifestyle i have which is very much sqewed towards work. classic midlife crisis stuff.

I know the cash need to be put to work but Im not sure how. I do have a rental property thats mortgage free and feels like a good way to provide regular income to allow me to step back workwise a bit -  as well as growing the asset, 
main issue is i dont know what else to do with it to  protect it from inflation...some bond or property funds maybe?

Cus

Nebulous2 said:

Who knows what tomorrow will bring? 

Almost 4 years ago I found myself with a six figure sum to invest. I couldn't wrap my head around the fact that a passive world index fund was around 60% invested in US companies.

I wanted to pivot away from that. 

Despite the advice here not to, I diversified by selecting some other companies. UK smaller companies,  European companies and a Japanese fund. 

My best performer is an index fund and it is up 61%. Some of the worst ones, like UK smaller companies, are still down after 4 years or so.

So are you still not comfortable with 60% in one country? Are you saying that you should have stuck with just passive world indexes? If you had made more from the alternatives would you be saying that you know better?  What's the point?

Nebulous2

Cus said:

Nebulous2 said:

Who knows what tomorrow will bring? 

Almost 4 years ago I found myself with a six figure sum to invest. I couldn't wrap my head around the fact that a passive world index fund was around 60% invested in US companies.

I wanted to pivot away from that. 

Despite the advice here not to, I diversified by selecting some other companies. UK smaller companies,  European companies and a Japanese fund. 

My best performer is an index fund and it is up 61%. Some of the worst ones, like UK smaller companies, are still down after 4 years or so.

So are you still not comfortable with 60% in one country? Are you saying that you should have stuck with just passive world indexes? If you had made more from the alternatives would you be saying that you know better?  What's the point?

I'm probably still not happy with 60% in one country, particularly one which now believes that everyone else in the world has to be defeated for them to win. However I no longer think I can second-guess that. 

I think I should have listened to the 'wise heads' on here who advised me not to. I think I should have gone for a simpler strategy - ie fewer funds instead of some passive funds with multiple satellites. I also think I should have avoided managed funds. 

Making more from the alternatives and believing I knew better would possibly have been even more dangerous. I know one person who made enough to buy a house on Tesla. I know two people who are sitting on life-changing amounts of bitcoin. 

They think they are investing geniuses now, whereas I think they are dangerously deluded. 

I know a lot of people who have made a lot of money from buying houses to live in. I also know some people who bought in the wrong place at the wrong time and were completely wiped out. Strangely enough, most of those who did well, believe they were very clever. Those who were wiped out believe they were unlucky. 

vacheron

dannybbb said:

my hsbc funds  (in a SIPP) are up just under 7% in 10 months. happy with this especially with the added tax relief -  my only concern is my age vs a possible crash. if i was younger I wouldnt care  but obviously have limited time to recover (also only started at 49) im thinking i should step back from equities . No one knows what will happen  but I  would rather have smaller gains than bigger losses at this point. Annoyed it took me till so late to start but there we are.

Also remember that unlike 10+ years ago where you pretty much had to buy an annuity when you retired (meaning that the value of your pension fund at retirement was pretty much everything), these days many, if not the majoirty, of people...  especially those with a SIPP posting on pension forums... will probably be mainly making substantial use of drawdown during their retirement.

This means that while the value at retirement can certainly be important (aka sequencing risk) some of your money could remain invested in some shape or form into your 80's or beyond, so could have up to 30 years to recover.

Also if this is your plan, make sure that "lifestyling" isn't going to utterly mess up your plans in the 10-15 years before retirement as many are facing a huge risk with this thing if they have an intention to drawdown rather than buying an annuity, and many don't even know that their pension shcemes are set up to do it!

Albermarle

vacheron said:

dannybbb said:

my hsbc funds  (in a SIPP) are up just under 7% in 10 months. happy with this especially with the added tax relief -  my only concern is my age vs a possible crash. if i was younger I wouldnt care  but obviously have limited time to recover (also only started at 49) im thinking i should step back from equities . No one knows what will happen  but I  would rather have smaller gains than bigger losses at this point. Annoyed it took me till so late to start but there we are.

Also remember that unlike 10+ years ago where you pretty much had to buy an annuity when you retired (meaning that the value of your pension fund at retirement was pretty much everything), these days many, if not the majoirty, of people...  especially those with a SIPP posting on pension forums... will probably be mainly making substantial use of drawdown during their retirement.

This means that while the value at retirement can certainly be important (aka sequencing risk) some of your money could remain invested in some shape or form into your 80's or beyond, so could have up to 30 years to recover.

Also if this is your plan, make sure that "lifestyling" isn't going to utterly mess up your plans in the 10-15 years before retirement as many are facing a huge risk with this thing if they have an intention to drawdown rather than buying an annuity, and many don't even know that their pension shcemes are set up to do it!

I think nowadays most lifestyling offers options for annuity, drawdown over a long period/shorter period etc.
The drawdown options are now usually the default. 
So there should be less people in the wrong kind of lifestyling than there was .

Cus

Nebulous2 said:

Cus said:

Nebulous2 said:

Who knows what tomorrow will bring? 

Almost 4 years ago I found myself with a six figure sum to invest. I couldn't wrap my head around the fact that a passive world index fund was around 60% invested in US companies.

I wanted to pivot away from that. 

Despite the advice here not to, I diversified by selecting some other companies. UK smaller companies,  European companies and a Japanese fund. 

My best performer is an index fund and it is up 61%. Some of the worst ones, like UK smaller companies, are still down after 4 years or so.

So are you still not comfortable with 60% in one country? Are you saying that you should have stuck with just passive world indexes? If you had made more from the alternatives would you be saying that you know better?  What's the point?

I'm probably still not happy with 60% in one country, particularly one which now believes that everyone else in the world has to be defeated for them to win. However I no longer think I can second-guess that. 

There will be a turn when the 60% US share does worse than the rest, that's guaranteed, just when?..
I wonder if anyone has reduced their US exposure due to their new governments beliefs..are we allowed to apply emotions to our investment decisions?

InvesterJones

Cus said:

Nebulous2 said:

Cus said:

Nebulous2 said:

Who knows what tomorrow will bring? 

Almost 4 years ago I found myself with a six figure sum to invest. I couldn't wrap my head around the fact that a passive world index fund was around 60% invested in US companies.

I wanted to pivot away from that. 

Despite the advice here not to, I diversified by selecting some other companies. UK smaller companies,  European companies and a Japanese fund. 

My best performer is an index fund and it is up 61%. Some of the worst ones, like UK smaller companies, are still down after 4 years or so.

So are you still not comfortable with 60% in one country? Are you saying that you should have stuck with just passive world indexes? If you had made more from the alternatives would you be saying that you know better?  What's the point?

I'm probably still not happy with 60% in one country, particularly one which now believes that everyone else in the world has to be defeated for them to win. However I no longer think I can second-guess that. 

There will be a turn when the 60% US share does worse than the rest, that's guaranteed, just when?..
I wonder if anyone has reduced their US exposure due to their new governments beliefs..are we allowed to apply emotions to our investment decisions?

Given US terms are only 4 years, it'd be more of a speculation/trading decision than an investment decision.

kempiejon

Cus said:

There will be a turn when the 60% US share does worse than the rest, that's guaranteed, just when?..

I wonder if anyone has reduced their US exposure due to their new governments beliefs..are we allowed to apply emotions to our investment decisions?

Quite the opposite for now. I started adding monthly to S&P 500 etf back in the Autumn in expectation of a Trump bump. So far so good but it was never intened as longterm position, not sure about an exit just yet.

Hoenir

Cus said:

Nebulous2 said:

Cus said:

Nebulous2 said:

Who knows what tomorrow will bring? 

Almost 4 years ago I found myself with a six figure sum to invest. I couldn't wrap my head around the fact that a passive world index fund was around 60% invested in US companies.

I wanted to pivot away from that. 

Despite the advice here not to, I diversified by selecting some other companies. UK smaller companies,  European companies and a Japanese fund. 

My best performer is an index fund and it is up 61%. Some of the worst ones, like UK smaller companies, are still down after 4 years or so.

So are you still not comfortable with 60% in one country? Are you saying that you should have stuck with just passive world indexes? If you had made more from the alternatives would you be saying that you know better?  What's the point?

I'm probably still not happy with 60% in one country, particularly one which now believes that everyone else in the world has to be defeated for them to win. However I no longer think I can second-guess that. 

There will be a turn when the 60% US share does worse than the rest, that's guaranteed, just when?..

When Japan represented 40% of the global developed market indices in the early 90's. The US was just 30%. In the Dot Com era represented 50%. Now approaching 74%. 

Unquestionable that passive investing i.e. index tracking is now driving concentration. US retail investors only have around 10% exposure to non US listed stocks. Bought into the whole MAGA illusion.