losing money advice please

DervProf

FWIW. I`m no financial adviser (only to myself). With 100K to invest, unless that amount was a small percentage of my overall wealth, I`d be drip feeding my money into funds over 3 years (ish). I wouldn`t use an IFA, but do a bit of homework (www.trustnet.co.uk) and invest through a fund supermarket (reduced initial charges). Anyone investing into equities 12 months ago would have been buying near the top of the market (no, that isn`t hindsight, I wouldn`t have put a lump sum of my own money in). Sticking the £100K into a decent savings account and paying monthly into a few funds would be lower risk, and sensible IMO.

dunstonh

no, that isn`t hindsight

Yes it is hindsight because each of the 5 years previous it would have been the wrong thing to do. There is no way to tell if phased investing is the best option or not until you get to the end of the phasing. Looking forward, now could be a great time to invest. It may not be in the short term. Phasing can make you money and it can lose you money.

meester

meester wrote: »

Just to add, dunstonh makes a point about balance which would be worth adding

"In addition of my total portfolio, over 72% is invested in equities, with just 13% in fixed interest products, 10% property and 4% cash. The portion of the portfolio invested in equities is clearly excessive relative to my stated appetite for risk and contradicts the notes from our meeting".

And finally, DON'T complain that your investment has lost you money.

Obviously that's why you are complaining (if you had made 15%, you would not be here), but in terms of reasons for a complaint, the problem is purely that the risk-level of the investment is far higher than the one you asked for.

DervProf

dunstonh wrote: »

Yes it is hindsight because each of the 5 years previous it would have been the wrong thing to do. There is no way to tell if phased investing is the best option or not until you get to the end of the phasing. Looking forward, now could be a great time to invest. It may not be in the short term. Phasing can make you money and it can lose you money.

Investing a lump sum on any particular day may, or may not be the best option. The stock market is nearly impossible to predict in the short-medium term. After several years of growth, the risk of a downturn is increased (we`ve seen strong gains since the lows of 2001-2). "Phasing" lessens the risk of investing at the wrong time, especially if you aren`t very clued-up on the markets. Fund managers don`t often beat average market performance, so how do you expect an IFA to be able to predict what is going to happen ? It would be interesting to see a performance table of investments made by IFAs. If the know which funds/investments will perform well, why are they working as IFAs ?

My strategy is to invest over a period of time. This reduces risk, and gives more flexibility if market conditions change. "Phasing can make you money and it can lose you money", that statement is true. "Investing a lump sump in the market can make you money and it can lose you money" is also true, it`s just that the former method is slightly less risky and can be beneficial if the markets suffer a downturn, which they tend to do from time to time.

meester

DervProf wrote: »

Investing a lump sum on any particular day may, or may not be the best option. The stock market is nearly impossible to predict in the short-medium term. After several years of growth, the risk of a downturn is increased (we`ve seen strong gains since the lows of 2001-2). "Phasing" lessens the risk of investing at the wrong time, especially if you aren`t very clued-up on the markets. Fund managers don`t often beat average market performance, so how do you expect an IFA to be able to predict what is going to happen ?

I'm pretty sure Ed had some stuff on this before. Can anyone post the actual statistics?

I checked on HL, and for a few sectors:

Cumulative performance

Investment3 months6 months1 year3 years5 yearsFTSE All Share-9.39%-9.53%-7.19%29.7%100.82%UT UK All Companies-11.07%-11.05%-10.32%24.68%94.46%

The UK All Companies sector outperformed the FTSE Alll Share over a period of 5 years.

Investment3 months6 months1 year3 years5 yearsJSE All-Share-10.65%-1.63%7.07%116.81%198.23%UT Japan-5.39%-12.12%-16.67%0.47%38.11%

The Japan UT sector DRAMATICALLY underperformed the JSE All Share
Cumulative performance

Investment3 months6 months1 year3 years5 yearsUT UK Smaller Companies-16.45%-19.34%-17.65%19.81%131.62%FTSE Small Cap Index-14.75%-19.56%-20.43%13.22%102.81%

The Smaller Companies UT sector significantly outperformed the FTSE Small Cap Index

Cumulative performance

Investment3 months6 months1 year3 years5 yearsS&P 500-9.73%-11.1%-8.08%10.73%60.46%UT North America-3.29%-4.7%-5.48%10.17%38.81%

And the North America UT sector underperformed the S&P 500.

So it looks like fund managers DON'T underperform, as an average, including all the less skilled managers, for the UK.

But for overseas market, you are better off with a low-cost tracker.

westy69

meester wrote: »

And finally, DON'T complain that your investment has lost you money.

Obviously that's why you are complaining (if you had made 15%, you would not be here), but in terms of reasons for a complaint, the problem is purely that the risk-level of the investment is far higher than the one you asked for.

TBH if i had made 15% i would never have looked into the risk profiles etc so in actual fact i am not really complaining about the losses it just brought things to my attention, if i had made 15% i would be taking my money back if i could instead of surrendering and losing in the region of 15k.