So how was that (financial) year for you?
Comments
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I don't either so its not just you. I like your fund choice. The others are just worried that you will lose a huge chunk of it (temporarily if there is a crash) as its all equities
Not only that, but if you have to sell some holdings to get hold of some cash, and that coincides with a time when the markets are down, it could cost you dearly in the long term.
If you have a holding that is worth twenty pounds but its value falls to ten pounds, it may recover soon enough if you leave it alone. But if you have to sell some to raise say five pounds while it's down, you have halved its value. No matter how high it grows in the future, it will only ever be half the value that it would have been if you were able to leave it alone.
When values fall or crash (and they WILL), being forced to sell holdings to raise cash has a surprisingly large effect on their future performance.
This is why you need to hold enough cash to see you through those times. A minimum of three to six months' ougoings and preferably much more.
Cash holdings can also cushion the ups (and especially) the downs of equity markets. A similar job to bonds but with less risk.I am one of the Dogs of the Index.0 -
Thanks, that is good you selected funds that gave you such fantastic gains.audaxer I can't give away all my secrets but here are two I chose myself: Legg Mason IF Japan Equity (gained 38% over the year) and Baillie Gifford Japanese Smaller Companies (16%).
Yes, if you made 0% this coming year you would have averaged over 8.5% over the 2 years which is still very good. However just because funds are on the HL Wealth 150 list, it does not necessarily mean they are not volatile. I'm sure the two funds you mention are very good funds, but I am also fairly sure that funds in these sectors are pretty volatile, hence the high returns. However some years, especially during an equity crash you are likely to see falls in values of up to 40% or 50% and therefore high negative returns for these years. If you have a well diversified and balanced portfolio that will limit the losses a bit, but everyone will have losses to some extent in an equity crash.I acknowledge that I was just lucky and that next year I might only make 10% or even 5%. Even if I made 0%, that 17% would tide me over and would be 8.5% overall for the two years, wouldn't it?
The stocks I chose were (I think) all from the HL Wealth 150, which are funds that HL themselves have picked as not being volatile or too risky.0 -
The stocks I chose were (I think) all from the HL Wealth 150, which are funds that HL themselves have picked as not being volatile or too risky.
audaxer I can't give away all my secrets but here are two I chose myself: Legg Mason IF Japan Equity (gained 38% over the year) and Baillie Gifford Japanese Smaller Companies (16%).
Two that I am in with my ISA are Man GLG Continental European Growth (15%) and Baring Europe Select (16%).
Only the Baring one is in the Wealth 150. The Legg Mason fund has a pretty hefty FE risk score of 168 with the Baillie Gifford fund not far behind at 147.0 -
Just about at the same level as last year. Would have to factor in a 4 month period of unemployment and my current job pays significantly less. I have also transferred money from cash ISA's to increase my investment in stocks and shares and some of these are currently losing money. Still managed to buy a new car
and have a couple of holidays as well so not overly concerned.0 -
................... on the other hand they may be jealous of you bundly.0
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I don't either so its not just you. I like your fund choice. The others are just worried that you will lose a huge chunk of it (temporarily if there is a crash) as its all equities
Yes, indeed, but they are not suggesting any alternative? Withdraw it all now, whilst I am winning -- yes, but put it where? Under the mattress? They don't explain.0 -
stephenadarglas wrote: »................... on the other hand they may be jealous of you bundly.
Oh no. Don't tell me that all this is about a bit of jealousy because some old biddy who grew up in poverty, was on a low wage most of her life, finally got a bit of luck?0 -
ChesterDog wrote: »if you have to sell some holdings to get hold of some cash, and that coincides with a time when the markets are down, it could cost you dearly in the long term.
This is why you need to hold enough cash to see you through those times. A minimum of three to six months' ougoings and preferably much more.
Cash holdings can also cushion the ups (and especially) the downs of equity markets. A similar job to bonds but with less risk.
Thank you Chesterdog but there can be no event in which I will suddenly need to get hold of more cash than I have currently in various bank accounts. It just isn't going to happen. I don't live your kind of lives.0 -
Yes, indeed, but they are not suggesting any alternative? Withdraw it all now, whilst I am winning -- yes, but put it where? Under the mattress? They don't explain.
What I don't think was clear, but now is, that you had enough in other income and cash etc to cover any household expenses without being forced to sell some of your equity funds.
If we take the 2008 financial crisis as an example, equities dropped somewhere between 15% and 50% depending on where you were invested and it took about 3 years to recover before climbing higher. So the idea would be to survive for at least that long on other income - which it sounds like you can do.
So my advice is to stay invested. Maybe consider if you are a bit too much in one region or another but otherwise sounds like you are doing fine.0 -
I have reported you for calling me "greedy and reckless" just because you are jealous that I did well with my investments last year.
Truly pathetic.
I've not commented on any of your posts so far. I have just been an observer. Let me point out what I have seen from that context:- You pop up bragging about how much better you have done with your investments than with some that were selected by an ex with investment experience.
- You claim that p2p is risk free.
- You claim that a regular saver paying 5% AER is a con and actually paying only 3%.
- (Many knowledgeable) people point out the mistakes you have made or generally tell you something you don't want to hear - 90% of them in a perfectly friendly (but honest, not sugar coated) manner (such as Dairy Queen most recently), and you start insulting them or claim they are discriminating against you because of your disability (which no one knew anything about prior to that).
If you genuinely want advice, rather than just a nice warm glow from some people agreeing with you or congratulating you, then you need to either change your attitude promptly, or see an IFA. However be warned that if you see an IFA it will cost you money and (s)he will also still tell you some uncomfortable truths too.0
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