Stock markets are too high and set to fall?

[Deleted User]

https://forums.moneysavingexpert.com/discussion/comment/82009323#Comment_82009323

I looked at the performance over 3 and 12 months of the funds that I had been holding for the financial year just ended. The 90 day performance period was much more favorable for index trackers but over the course of the year, managed funds won the day.

aroominyork

chiang_mai, you've been on this forum long enough to know that 3 month or 12 month performance by a fund counts for little (though I note the top fund was hedged so the sinking Yen accounts for part of the fund's performance). I am not interested in turning this thread into an active vs. passive debate.

Bobziz

https://forums.moneysavingexpert.com/discussion/comment/82010002#Comment_82010002

Indeed, that debate has been ongoing here since 2017 and both passive and managed have so far come in well behind the forumite holding gold.

masonic

https://forums.moneysavingexpert.com/discussion/comment/82009996#Comment_82009996

From what I recall of previous discussions, you selected those funds quite recently, and did so on the basis of their recent performance at that time. So the fact that their one year performance is good is a direct consequence of that performance driving you to pick them.

They'd done well over the medium term of 3-5 years. I remember looking at some of them over a much longer period and there were other periods of underperformance in the past. So such underperformance should be expected from time to time. Specifically, because most have a value focus, they will perform relatively poorly when growth is in favour. Two months of sub-par performance does not necessarily mean the pendulum has swung the other way, but it might have. It's impossible to say without the benefit of hindsight.

I recall that through the various cycles, the stronger and weaker periods tended to cancel out, but not to the extent that they lagged overall, nor did the peak to trough falls get smoothed relative to equivalent funds.

So, as you said earlier, it is a different way of getting to the same general outcome. It just so happens the first steps turned out not to follow the previous trend you were following, but nobody knows what will happen next.

masonic

https://forums.moneysavingexpert.com/discussion/comment/82010014#Comment_82010014

I think this might be the start of the MSE active vs passive debate, in early 2005, over 20 years ago:

https://forums.moneysavingexpert.com/discussion/comment/274979#Comment_274979

Bobziz

Crikey, and over 121,000 comments later @dunstonh is still adding great value to the forum 👏

[Deleted User]

https://forums.moneysavingexpert.com/discussion/comment/82010015#Comment_82010015

That is not correct, I have held all the Artemis SG funds and the two Japan funds for at least one year. I did change the way I was holding the US about one and a half months ago, I changed from the ALL World fund to the Fidelity Index but decided to hang on to AW until I decide futher. The Orbis MA funds are 6 months old and the PM MA fund 9 months….all the bonds have been held for at least a year.

[Deleted User]

https://forums.moneysavingexpert.com/discussion/comment/82010002#Comment_82010002

There's no debate on this, I do however think it's useful to understand the differences in performance of the two types of funds, over different time scales and in different economic settings. The higher allocation to the US over the 90 day period made the global indicies much more resilient.

masonic

https://forums.moneysavingexpert.com/discussion/comment/82010043#Comment_82010043

Ok, so a complete change in the short term, but spread over the 2nd half of 2025 and one fund changed last month. So for the most part your 1 year performance was achieved. In which case it hardly seems worth dissecting the 3 month performance. You got in before things turned. Just a few funds, like the Ranmore global fund and the strategic bonds have disappointed over your whole holding period.

aroominyork

It could be that, like many of us of advancing years, chiang_mai's relationship with time has changed: "If you aren't willing to own a stock for a month, don't even think about owning it for ten minutes."