Cash ISAs? Do me a favour, only for high rate tax payers

cloud_dog

Oh dear, tried to ignore but.........

leejp wrote: »

It's pretty much consensus that index trackers outperform their managed fund counterparts. Of course, you can pick star performers, but the following year they might be star losers. I'm talking average over several years, and the index trackers prevail.

Yes, so if you are looking to perform around average then a tracker is for you.

Groan, Aeged the managed funds that go defensive are also in that mode at a time when the FTSE soars - and they miss the boat - it goes both ways I'm afraid

Very glibb and generic statement

This is why anyone at The Motley Fool will tell you to buy into an index tracker every month. Simple.

.......because as we all know TMF posters are the be-all-and-end-all of investment gnu's.

I too have hedge funds and escalator funds but trackers are best for most - especially the beginners.

possibly best for people who do not want to manage their investments, or as part of a balanced investment portfolio.

I have to rip this quote apart:

"If you know the markets are likely to be turbulent, you can definitely benefit from pound-cost averaging, but if the markets are at a low and likely to rise steadily you would benefit from lump-sum investing"

What utter nonsense. This guy can see the future. Example: Hey, the markey fell 30% over the last year. This means it is "likely to rise" next year. So I will invest a lump sum now. You're not that good, my friend.

You've just ripped Aegis apart for fund managers not being in the market when it turns positive and now you are saying only invest money monthly - you can't have it both ways :rotfl:

Someone mentioned the performance of equities not necessarily continuing.. yes I would agree completely with that possibility. That means cheap share prices for all of us, buying regularly every month by DD...

So now you can see the future but no one else - ah I get it, a self styled gnu :rotfl:

Aegis

leejp wrote: »

It's pretty much consensus that index trackers outperform their managed fund counterparts. Of course, you can pick star performers, but the following year they might be star losers. I'm talking average over several years, and the index trackers prevail.

And I already told you that over any 10 year period you want to pick, index trackers lose out to managed funds led by management teams with strong track records. You can check this out for yourself at www.Citywire.co.uk by picking pretty much any sector and listing the top performers over the last 10 years. Most of the time the tracker will appear at the boundary between the 2nd and 3rd quartiles, the bank funds will be at the bottom and the majority of managed funds will be above the trackers.

This is simple fact, and much more verifiable than some rubbish or other from the Motley Fool (who actually either lie about or miscalculate their statistics when comparing active and passive funds, at least in an article of theirs I've critiqued here before). In short, this isn't even close to a consensus.

Groan, Aeged

Not my handle. Once again, it is incredibly rude of you to not address me in the manner I have chosen to be addressed. As you were complaining about rudeness earlier on in the thread, I ask that you do the decent thing and spend time addressing me by the correct handle from here on.

the managed funds that go defensive are also in that mode at a time when the FTSE soars - and they miss the boat - it goes both ways I'm afraid. This is why anyone at The Motley Fool will tell you to buy into an index tracker every month. Simple.

The managed funds have access to a hell of a lot more research than the average private investors. They also have an entire analytics team working on data to try and predict where investor sentiment is likely to go, and as such I have a lot of respect for their ability to best select the most appropriate position to be in at any one time. In comparison, the FTSE tracker is utterly blind, and will simply bomb during downturn.

The ability to carry out active trading also offer the ability to carry out profitable short-term trades, which good investors can easily make money on in good OR bad situations.

I think this conclusively shows why a tracker is not just "better"

I too have hedge funds and escalator funds but trackers are best for most - especially the beginners.

This is simply not true. They are the simplest product to understand, but they are far from the best. They are higher risk than active funds, and likely to return less of a profit than a decent fund picked from the list of high-flying managers.

You think MarieClare et al should take that big inheritance cheque and make a lump sum investment in equities? How many people know enough to time the market? Exactly.

I have to rip this quote apart:

"If you know the markets are likely to be turbulent, you can definitely benefit from pound-cost averaging, but if the markets are at a low and likely to rise steadily you would benefit from lump-sum investing"

What utter nonsense. This guy can see the future. Example: Hey, the markey fell 30% over the last year. This means it is "likely to rise" next year. So I will invest a lump sum now. You're not that good, my friend. :rotfl:

You can shut right up about nonsense, what with some of your own claims so far. You have still failed to address any of my points that "ripped apart" your ridiculous claims that basic rate taxpayers would all benefit more from a stocks and shares ISA and should therefore abandon cash ISAs entirely. You've stated things about trackers which are simply not true, as I've now shown in two separate posts. You've disparaged people who have acted rude while at the same time you have been extremely rude yourself. If you want to talk about nonsense, reread some of your own contributions before you start throwing rocks.

Now, to clarify my position on the statement above that you think is so ridiculous:

If you are investing at a historical low due to a single event and you predict that the markets are going to rise, you can risk a lump sum investment. If you're investing in something like a with-profits fund designed to smooth out the volatility, you can risk it. If you're buying gilts which have hit record low levels, again you can risk it. There are all sorts of situations where it MAY be acceptable to invest in a lump sum, and may well return better results. In fact, if you reread my entire post you'll notice that I even spelled out which style of investing would be better for which situation, and even advocated pound-cost averaging as "probably fairly good for most investments that are discussed here."

Reading comprehension: it really would help to develop some if you want to "rip apart" anything.

In any case, what I said is absolutely true. If you KNEW the markets were in for a rough patch, you would benefit from pound cost averaging. If you KNEW that the markets were actually likely to rise by more than the expected level of volatility, then lump sum investing would be by far the right answer. In the end, your knowledge will be incomplete and you will have to make an educated guess as to which situation you think is more likely to prevail. Whichever scenario seems more likely to you is the one that will influence your investment strategy.

This is a prime example of what you're doing here: acting like some sort of authority on investments. You aren't. Different people will have different needs, different investment styles and *shock horror* different opinions. Just because they're different DOESN'T MAKE THEM WRONG!

Someone mentioned the performance of equities not necessarily continuing.. yes I would agree completely with that possibility. That means cheap share prices for all of us, buying regularly every month by DD... :T

Whereas if they go up steadily, it means more expensive share prices for everyone buying regularly. It's a double-edged sword this one.

To summarise my position:

If you think (based on research) the investment is going to go steadily up: lump sum.

If you think it's going to fluctuate by more than the growth, or aren't sure, or if you think it's going to decline for a while before a surge: pound-cost averaging.

In the end it all boils down to the investors choice, and the correct strategy will only be found out in the long run.

debbie42

leejp wrote: »

This is why anyone at The Motley Fool will tell you to buy into an index tracker every month. Simple.

TMF editorials may well do that: you couldn't say the same for all the forum posters, and with good reason, as has been discussed over here (and there) many times before.

Toastie

leejp wrote: »

(This is based on 6.55% with West Brom Star account, and 6.25% best cash ISA.)

Well Barclays has a new 6.5% ISA. I think i might be putting my money in there. An Extra £37.80 with no penalties on withdrawls sounds good!

Paul_Herring

Toastie wrote: »

Well Barclays has a new 6.5% ISA. I think i might be putting my money in there. An Extra £37.80 with no penalties on withdrawls sounds good!

Just remember to move it in 13 months when the rate drops 1%

Toastie

Paul_Herring wrote: »

Just remember to move it in 13 months when the rate drops 1%

Oh i will. mind you 5.5% isn't too bad either though.

Han_naH

Hmm, I see evidence of pack culture.. but assert my views as ever

MarieClare is a very respectable er.. magazine. :rolleyes:

I had to skim read the Aeged post as it was a little... boring (hysterical?) after a while...

£37.80? I think I bought a round for that last Saturday. I think I'm in the wrong forum... have fun!

[Deleted User]

leejp wrote: »

I think I'm in the wrong forum... have fun!

:T :rotfl:

If you can't see the benefit of cash isa's; you are in the wrong forum!

meester

thank god for that

Aegis

leejp wrote: »

Hmm, I see evidence of pack culture.. but assert my views as ever

MarieClare is a very respectable er.. magazine. :rolleyes:

I had to skim read the Aeged post as it was a little... boring (hysterical?) after a while...

£37.80? I think I bought a round for that last Saturday. I think I'm in the wrong forum... have fun!

Very long winded way of saying "I can't actually deal with any of your points, so I'm going to disappear, but I'm going to try and do so in a way that makes me look clever".

By the way, you still couldn't be bothered to get my handle right, which just proves that you're both rude AND a hypocrite.