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For those familiar with Lars Kroijer and his views

edited 30 November -1 at 12:00AM in Savings & Investments
101 replies 6.3K views
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  • edited 16 August 2019 at 6:15PM
    ColdIronColdIron Forumite
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    edited 16 August 2019 at 6:15PM
    fjh wrote: »
    I am a learner !! so please can you clarify- when talk of a World tracker - does that mean for example- HSBC FTSE All-World index or Fidelity Index World W Fund? + others? And as such these are 'immediate ' to buy in / sell unlike the Woodford funds?
    I wonder if the use of 'immediate' means getting a real time quote such as when buying a tracker via an EFT and by 'unlike the Woodford funds' they mean funds in general. Obviously with the exception of Woodford's Equity Income which can't be bought or sold at all. If so the two funds mentioned are actual funds (OEICs), not ETFs, so they have a daily forward priced valuation point
  • ThrugelmirThrugelmir Forumite
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    Linton wrote: »
    What happened to the Japanese markets is a valuable warning to investors.

    A fair comment. In summary economic stagnation. Something that Central banks have been desperate to avoid in the past decade. QE being the primary weapon. The ageing (declining) Western population isn't helping matters either.
    "The human understanding when it has once adopted an opinion ... draws all things else to support and agree with it." - Francis Bacon (1561 – 1626)
  • AlexlandAlexland Forumite
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    fjh wrote: »
    I am a learner !! so please can you clarify- when talk of a World tracker - does that mean for example- HSBC FTSE All-World index or Fidelity Index World W Fund? + others? And as such these are 'immediate ' to buy in / sell unlike the Woodford funds?

    Buying a tracker should be significantly more liquid than a failing active fund with unlisted shares - the "All" means it includes circa 10% emerging market exposure as opposed to being developed markets only. All costs a bit more but gives additional diversification.

    If you want immediate then you could buy a World ETF (such as Blackrock iShares SWDA) or All-World ETF (such as Vanguard VWRL) or if you are happy to wait for the fund manager to action the change you could use an OEIC fund such as Fidelity World or HSBC FTSE All-World funds.

    There are a number of other differences between ETFs and OEICs that are worth understanding.

    All of these are 100% equities with circa 50% downside risk in adverse market conditions.

    Alex
  • Crashy_TimeCrashy_Time Forumite
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    Malthusian wrote: »
    "Stick all your money in Japan" was not a standard recommendation from anyone in the UK, not even in the 70s when financial advice was far less regulated and scientific than it is now.

    And endowments weren't invested in Japan funds, they were generally - especially in the 70s and 80s - invested in the insurer's With Profits fund, which would have been unlikely to overweight Japan.

    The endowment scandal was not about endowments underperforming due to betting everything on Japan, but about unrealistic projections of growth that would have not have been met whatever the insurer invested in. And investors spending the money they saved as interest rates decreased, instead of investing it to pay off the capital, to counteract the effect of lower interest rates, lower inflation and lower growth on their endowment.

    No, the advice was stick SOME of your money in Japan, and in my case it performed well, and I got out just in time, why wouldn`t an investment professional advise someone in say 1985 to put money into Japanese trackers/Unit trusts etc.? I didn`t mention endowments either.
  • Crashy_TimeCrashy_Time Forumite
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    Thrugelmir wrote: »
    Easy with hindsight to make such comments. Was a very different investment era compared to a couple of decades later.

    So you are saying that a diversified portfolio wouldn`t have performed better than one heavy on Japan based investments, and that somehow people didn`t know that markets can crash and diversification can offset this to an extent back then?
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  • AudaxerAudaxer Forumite
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    Linton wrote: »
    Given the composition of the FTSE100 I am happy to predict that VLS100 will continue to underperform the FTSE World for the next 5 years.
    Most of the UK allocation of VLS100 is actually in the FTSE All Share Index rather than the FTSE 100 index, although I appreciate that may not make much difference to your prediction.
  • AlexlandAlexland Forumite
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    So you are saying that a diversified portfolio wouldn`t have performed better than one heavy on Japan based investments

    In the graph I posted above a diversified cap weighted portfolio would have been around 40% Japan at the time. Still global investment returns over the last 40 years have been satisfactory despite some stuff that got very big then small again in Japan.
    Audaxer wrote: »
    Most of the UK allocation of VLS100 is actually in the FTSE All Share Index rather than the FTSE 100 index, although I appreciate that may not make much difference to your prediction.

    FTSE100 is around 80% of the FTSE All Share index anyway so VLS is heavy on both.

    Alex
  • fjhfjh Forumite
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    ColdIron wrote: »
    I wonder if the use of 'immediate' means getting a real time quote such as when buying a tracker via an EFT and by 'unlike the Woodford funds' they mean funds in general. Obviously with the exception of Woodford's Equity Income which can't be bought or sold at all. If so the two funds mentioned are actual funds (OEICs), not ETFs, so they have a daily forward priced valuation point

    Thanks for replies.
    Yes my poor choice of word ‘immediate ‘ does reflect desire to have same ‘timing’ as FTSE shares rather than the - unit trust style of having to wait and sell almost ‘blind’ as to what price you may get.
  • AlexlandAlexland Forumite
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    In which case start learning about ETFs such as the SWDA and VWRL that I mentioned above. ETFs have no FSCS protection and its generally best to stick with the larger ones to reduce the bid ask spread when you buy and sell. Avoid synthetic or leveraged ones unless you really understand the extra risk. Some platforms will charge more to trade ETFs and less to hold them ongoing.

    Alex
  • edited 17 August 2019 at 11:25AM
    ThrugelmirThrugelmir Forumite
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    edited 17 August 2019 at 11:25AM
    So you are saying that a diversified portfolio wouldn`t have performed better than one heavy on Japan based investments, and that somehow people didn`t know that markets can crash and diversification can offset this to an extent back then?

    I simply making my observation on the basis that I worked in the investment department of FPLO for some time in that era. Hence my comment of it being a very different investment world. Japan became an economic powerhouse in the 70's. Exchange control restrictions were prevalent , not possible for foreigners to buy shares in many overseas markets. Not that there was the research available to make informed decisions. Corporate Governance was likewise much poorer. The top Japanese companies therefore appeared almost Blue Chip with there huge export potential. Sony Walkman was the Apple iphone of it's day.

    Likewise there was no robo trading to maintain portfolios. Systems were paper based. Settlement of trades was measured in days and weeks , not seconds. There were no "Vanguards" offering low cost options to small investors.

    The MSCI has 1651 constituents. The top ten are currently all US companies accounting for around 13% of the index. If they lost 60% of their value permanently what's the potential impact on your long term return? Crashes aren't always just numerical events.
    "The human understanding when it has once adopted an opinion ... draws all things else to support and agree with it." - Francis Bacon (1561 – 1626)
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