Investing For The Future!

mr_fishbulb

wombat42 wrote: »

Good man :j :T :beer:

Haha - I had to do some research into that fund as you were pimping it so much.

dunstonh

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

LOL.

Its good that you posted because you have done the very thing that all new investors do. If you take a sector (doesnt matter which) you will see funds in that sector which have different aims. They will largely be the same but some may take more risk than others or focus on different types of business.

In a period of good performance you would expect the riskier funds to perhaps be higher up the tables than the lower risk ones and the reverse when things go down. Some funds aim for 2nd quartile consistency. They can be better than those that jump around aiming for top performance and getting it sometimes then dropping a lot other times.

If the fund has been heavy in Oil then it may have gone up more than others that a lighter in oil. However, if oil then goes down the funds that are heavy in oil will suffer more.

So, you need to look at the top performing funds and understand what is it that has put them there. Is it luck? Is it frequent luck or just a one off?

Dont look at cumulative performance. Look at discrete performance. Cumulative can make a fund with 3 months of good luck and 9 months of bad look a lot better than it actually is.

jamesd

This is probably what initially prompted dunstonh's comment: "all in top 10 performance over the last 3 years in their respective sectors"

So, here's the list of funds, why else did you pick each sector or region and each fund? What do you expect to happen for the next 1, 3 and 5 years to the holdings you expect each to have during those times?

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

Knowing why you chose to purchase something matters to you now and so you can look back on it later and see if the reason still applies.

What do you think of the history and potential for UK and European small-cap companies?

Why are you buying Neptune Russia and Greater Russia? Why are you buying it at 50 per month and what events in the next three months are you expecting to have an effect on the prices there?

GjrBartlett

So with my level of risk - medium.

Does anyone have any recommendations which sectors I should be investing in, to create a balanced portfolio?

jamesd

Risk level 6. Though you might consider reducing property a lot right now and substituting fixed interest for much of that. That's an old allocation mixture and it does change depending on the way the different asset classes are behaving. Property changed dramatically since those were generated.