Is it time to reinvest?

earlgrey_3

Browntrout wrote: »

It's Time in the Market, Not Timing the Market, that's important.

That's assuming the right market and that your time in the FTSE didn't start Jan 2000 of course. In which case the mattress may have been a better bet. :rolleyes:

hyposmurf

Since the credit crisis there has been numerous points whereby it was looking like the upwards trend was going to start winning out.Watched my funds start to increase then get blown out of the water over the next financial worry.How would you possibly know that we are out the worst of credit crunch and thats nothing worse to come?Even by studying many articles and trends you wouldnt really have a clue, I doubt many fund managers can definately pin their finger on when the credit crisis will be over, even with all their many tools,researchers and years of experience.I suppose once there has been a prolonged upwards trend you could look back months later and say it looks like its over.

dunstonh

earlgrey wrote: »

That's assuming the right market and that your time in the FTSE didn't start Jan 2000 of course. In which case the mattress may have been a better bet. :rolleyes:

If you solely invested in the FTSE in Jan 2000 then you badly invested by putting all your eggs in one basket.

purch

I doubt many fund managers can definately pin their finger on when the credit crisis will be over

I don't think the Equity markets will be waiting for a definate or measurable end to the 'credit crunch'

The huge selling 'frenzy' which peaked in January and appears to have ended in early March will (in my opinion) form the base for the markets in the medium term. (Not absolute bottom, never going lower again, etc etc) but they are levels where a sustainable base can be built for a while.

tradetime

I doubt many fund managers can definately pin their finger on when the credit crisis will be over

Personally I doubt any can, most struggle to beat the averages.

I don't think the Equity markets will be waiting for a definate or measurable end to the 'credit crunch'

Agreed, markets attempt to anticipate, and by greed and fear they overshoot, since I don't see an overshoot to the downside by any means yet, I think we have more to go in the medium term, next re-assessment I'd have on the ftse is at 5840 ish, but that's just me, and since I'm not a long term investor it doesn't count for much, just my musing.

dunstonh

Personally I doubt any can, most struggle to beat the averages.

That is not actually technically correct. Take a look at the UK all companies sector and you will see the FTSE all share trackers at mid table consistently. So being the half way point would put roughly half doing better and half doing worse. Many of those doing worse are the passive managed funds so if you eliminate those you reduce your odds somewhat.

It also depends on how much downside protection the fund carries and its overall risk in its sector. Sometimes aiming for second quartile consistency is better in the long run than aiming for quartile one outperformance.

tradetime

Fair enough dunstonh, having read many of your posts I would not like to take the other side of a debate on such a subject, since my experience of track performance of funds would be at best negligable, so consider my previous remark the heresay, or the recycling of secondhand opinion.
I should probably throw up some source of the secondhand info though, just for continuity. If googled there are plenty of views on fund performances, but here's one off the top of my head.

http://www.investopedia.com/articles/02/013002.asp

dunstonh

The problem with many of these articles is that they are trying to compare like for like when so often the funds are not like for like.

The FTSE100 trackers spent most of the last 14 years in the bottom quartile with virtually all managed funds in the same sector beating them. That wasnt because the managed funds were better but because large caps were not the place to be investing into. Managed funds could adapt but FTSE100 trackers couldnt. Equally FTSE250 trackers were top of the pile for a lot of the time because mid caps were the place to be and they tended to beat managed fund versions as the managed fund would have had some downside protection and opinion which worked against them in the periods of good growth (but could protect them a little in the periods of volatility).

FTSE100, FTSE all share and FTSE250 are all different but in the same sector and the managed funds in the same sector will all have different aims and risk profiles as well. Personally, I am not a general fan of UK growth managed funds. A FTSE all share tracker is a good replacement for that. However, I prefer to build a focus of managed funds instead, such as equity income, smaller cos, hidden value etc rather than a jack of all trades fund.

The managed vs tracker debate is heated but in reality you are talking small differences at the end of the day. The biggest area to make a difference is diversification and rebalancing. If you could get the diversification and use trackers for all areas (which is not possible with unit trusts) then that would be fine.