Investing For The Future!

jamesd

I suggest that you read Ok then - How do I choose a S&S ISA to get an idea of what a sector allocation is and some of the HL practical details. Note that most people commenting there have high or above high risk mixtures, so don't just copy theirs.

If you can stand the ups and downs it's ideal if you start at higher risk and gradually lower it over the last five to ten years. But you need to be able to sleep.

Also, when remortgaging, go for new 25 year terms each time. That way you're not forced to sell when the original 25 year term ends if that happens to be during a market downturn. That helps to reduce investment risk, since it's at its highest when you have a fixed end time. If you do well you might think that it's a good idea just to start paying off ten percent of the mortgage each year at the original end date and keep most of the money invested.

The Wealth 150 isn't a particularly bad place to start if you have no idea what you're looking for. Dunstonh comments that it tends to be based on past performance and not so much on expected future performance. Personally I use trustnet sector lists and don't actually care whether the choices I make are in the Wealth 150. Eight of the eleven funds I currently hold are in the Wealth 150.

GjrBartlett

THanks for the reply Jamesd,

Just been on Trustnets Website, they seem to have a wealth of good information on their, to aid with my reasearch, now comes the difficult bit of picking funds! Its hard enough picking which sector to invest in!

Any suggestions?

jamesd

Plenty of suggestions in the discussions I pointed to... first work out the assset allocation that's appropriate for your risk tolerance and go from there.

wombat42_2

GjrBartlett wrote: »

THanks for the reply Jamesd,

Just been on Trustnets Website, they seem to have a wealth of good information on their, to aid with my reasearch, now comes the difficult bit of picking funds! Its hard enough picking which sector to invest in!

Any suggestions?

On top of that you have to work out percentage allocations for each fund. Personally I think picking a global fund is a good idea so the fund manger works out the sectors for you and dynamically adjusts them over time. Maybe consider Jupiter Global Managed or Neptune Global Equity.

GjrBartlett

Many Thanks for replies.....

I've been doing some research via Trustnets website, Anyone have any thoughts on the following funds, their all in top 10 performance over the last 3 years in their respective sectors.

UK All Companies - Old Mutal UK Select Mid Cap. £60pcm
UK Equity Income - Invesco Perpetual Income. £75pcm
European (Ex UK) - Neptune European Opportunities. £60pcm
Global Emerging Markets - Lazard Emerging Markets. £55pcm
Specialist - Neptune Russia & Greater Russia. £50pcm

Total £300pcm x 12 = £3600 pa & £3600 into best paying cash isa in April 08.

Anyone have any suggestions on the above..

Sector Choice? Fund Choice?

Regards in advance......

purch

You could look at including a Far East fund, either including or excluding Japan depending on your preference

The Old Mutual Select Mid Cap is focused on medium sized company's, which was a sector of the UK market that performed particularly well from 2004/07. It might not be a sector that necessarily performs as well going forward, especially if you expect economic conditions to be 'difficult' (Central Banker speak for low growth)

My only other comment is that it is all Equity based, which raises the risk level

dunstonh

Stop looking at past performance. It means nothing unless you know why that fund was top.

For example, Old Mut UK select mid cap was top because it was a good time to be in mid caps. Mid caps have been off the boil for the last 6 months and large caps seem flavour of the month currently. Yet if you look at past performance of large caps (excluding last few months) you would find them around the bottom half of the tables.

Your spread is medium high to high risk.

GjrBartlett

I feel as though dunstonh has just told me off!!

So how would you recommend picking funds, obviously not pinpointing any in particular, but was is a good way to compare funds against each other?

And for someone with my risk, medium, maybe medium high, would sectors would you recommend at this time?

I understand any answers given, are not a recommendation to invest in them.

Regards.

mr_fishbulb

GjrBartlett wrote: »

I feel as though dunstonh has just told me off!!

So how would you recommend picking funds, obviously not pinpointing any in particular, but was is a good way to compare funds against each other?

And for someone with my risk, medium, maybe medium high, would sectors would you recommend at this time?

I understand any answers given, are not a recommendation to invest in them.

Regards.

Have a read of some investment websites. Have a read in some financial publications. Get an idea in your head of where you think will be a good area to invest in and make sure you can justify to yourself why you like those areas.
I've been looking since November and still haven’t started investing, but I've got a good idea of the markets and can give reasons for why I like particular funds. They will probably not be to everyone's tastes but the reason why there are so many funds out there is that there is no one fund for all.

For example I currently like:

JPM Natural Resources or First State Global Resources for their exposure to natural resources which I believe will fair well in a continued commodity bull market. Hard commodities will be required by expansion of China and precious metal producers will do well from rising gold &silver prices to hedge inflation. Supply of oil is falling and demand is growing.

CF Eclectica Agriculture - as demand for more substantial diets in emerging markets grows, coupled with bio fuels and weak harvests, these companies will grow from increased food costs. Very new fund, only have 3 months

Neptune Global Equity - exposure to both large cap multinationals (which are a lot safer bet at the moment than small/mid companies) and the ability to invest in emerging markets makes this attractive.

These alone would make for a very high risk investments.

Investments I'm not so keen on:

UK Small/Mid Caps - in a slowing economy these will get hit (as others on this thread have said).

Property - No only do I think we are in for a downturn, but funds have started to lock people into these requiring 6/12 months before you can leave.

Government / Large Cap bonds - return is too low. Might as well put money in an ISA or savings certificates

wombat42_2

mr_fishbulb wrote: »

Neptune Global Equity - exposure to both large cap multinationals (which are a lot safer bet at the moment than small/mid companies) and the ability to invest in emerging markets makes this attractive.

Good man :j :T :beer:

I would suggest that there is a fair slug of resources in there as well.