sd2
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Post by sd2 on Oct 5, 2019 9:54:01 GMT
I live off my investments. Some good, some dogs . What's to do ? Just spend your capital till its gone? I think I might take up senile crime, rob post offices and spend winters Inside . Seriously folks, should one totally avoid Stocks and Shares for fear of being thought stupid. No stay away at the moment the global economy appears to be going into recession. It doesn't matter if a company continues to increase profits all prices will fall (some companies share prices might rise but not as high as they would have done). Sit tight don't try to time the market just start when the market falls sufficiently for you to feel happy to start buying. Investment Trust are in my opinion what you should buy as they will fall much further than the fall in there NAV. Of course there may be no global recession....bugger!
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sd2
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Post by sd2 on Oct 5, 2019 10:21:13 GMT
Rubbish theres plenty of investment managers who beat the market. Nope. Over a 10 year period maybe 5 - 10% manage it. Annoyingly I posted a link for investment Trust which should how good some managers are. As an aside of the 10 best managers of investment trust 9 have been managing the investment trust for more than 10 years.
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Godanubis
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Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
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Post by Godanubis on Oct 5, 2019 10:37:08 GMT
One big way to save money is to ditch the ongoing charges for IFA you needed to get to manage you own pension. Most large firms ie Hargreaves Lansdown , AJ Bell, Fidelity etc have recommendations. With several thousands going to IFA for advisory fees and platform fees as well is not a prudent way to maximise ongoing returns.
As long as you only take what you need in the lean times and shift at least a years requirement to a secure isa with guaranteed returns when returns are moderate to high things should be fine. If you are really jittery then give in and go for partial or full annuity.
I’m down about £10000 this week YOY slightly ahead. I will wait till end of tax year to hopefully take full allowance from taxable investments if not prudent then money will come from tax free investments.
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hazellend
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Post by hazellend on Oct 5, 2019 11:34:38 GMT
Nope. Over a 10 year period maybe 5 - 10% manage it. Annoyingly I posted a link for investment Trust which should how good some managers are. As an aside of the 10 best managers of investment trust 9 have been managing the investment trust for more than 10 years. You will notice on the fact sheet for all these ITs it will say past performance does not predict the future, at all. By choosing an IT, you are exposing yourself to manager risk, sector risk, country risk over the index. You might out perform, but it’s unlikely, and the research backs this up. Still, investing in a basket of the big ITs is better than individual stock picking, which is basically gambling This weeks monevator post has a short video on this exact point (why not invest with a top manager?) monevator.com/qa-thursday-with-lars-kroijer-session-1/
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hazellend
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Post by hazellend on Oct 5, 2019 11:40:17 GMT
I live off my investments. Some good, some dogs . What's to do ? Just spend your capital till its gone? I think I might take up senile crime, rob post offices and spend winters Inside . Seriously folks, should one totally avoid Stocks and Shares for fear of being thought stupid. No stay away at the moment the global economy appears to be going into recession. It doesn't matter if a company continues to increase profits all prices will fall (some companies share prices might rise but not as high as they would have done). Sit tight don't try to time the market just start when the market falls sufficiently for you to feel happy to start buying. ! Um, that is market timing and probably won’t work out very well. From the above comment I’m guessing you are quite a conservative/risk averse investor. A better strategy for you would be to chose an asset allocation with lower volatility like 60:40 equities bond mix. I have zero risk aversion and am 100% equities and plan on sticking with this indefinitely. I do have the safety net of a good public sector pension which I can take when I retire in 15 years at 55, so I would not recommend 100% equities for most people. I’m including P2P in that 100% because I’m rebalancing it all into equities as and when I can.
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bigfoot12
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Post by bigfoot12 on Oct 6, 2019 9:32:50 GMT
Nope. Over a 10 year period maybe 5 - 10% manage it. And those that do aren't consistent, so picking one is pure luck. I'm not sure about the last point. I was pretty sure I found one, he had an explainable strategy with a very good track record. Amazingly, for me, my institution had a relationship with his and so I received discounted fees. Unfortunately spotting his talent was so easy a rival fund manager spotted it and poached him!
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sd2
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Post by sd2 on Oct 8, 2019 13:13:14 GMT
A very good article. I will never stop trying to help fellow deluded/inexperienced investors discover the benefits of passive index investing. Only one or two funds required, and you will beat almost all the active investors. www.whitecoatinvestor.com/individual-stocks-dumb/An example www.moneyobserver.com/news/investment-trusts-long-term-yields-above-10Note if for instance you bought one of the latter and it's ongoing costs are .7% and you bought it at 7% discount that's 10years management fees. Henderson smaller companies for instance. I assume ETFs can't be gated? When the normal panic selling kicks in, what happens? That's not really been tested yet. Panic selling of index fund? Need to look for something NOT in an index!!
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r00lish67
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Post by r00lish67 on Oct 14, 2019 10:37:21 GMT
I assume ETFs can't be gated? When the normal panic selling kicks in, what happens? That's not really been tested yet. Panic selling of index fund? Need to look for something NOT in an index!!
That's why I stick to good old equities !
I bet certain people round here who bang on about ETF's like they are the best thing since sliced bread have not actually read the associated prospectus !
There are broadly-speaking two types of ETFs. Physical and Synthetic and Physical ETFs are in the minority !
I may regret challenging you on this, but is this actually true? Anecdotally, I know that Vanguard's ETF's are overwhelmingly physical in nature. Less anecdotally, this article seems to suggest that synthetic ETF's are an endangered species and are already handily outnumbered by physical ETF's. From the article: "Today, three-quarters of ETF assets under management are held in physicals. And the trend is set to continue as physical product launches predominate while existing synthetics are converted to physical replication"
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bigfoot12
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Post by bigfoot12 on Oct 14, 2019 10:41:35 GMT
That's why I stick to good old equities !
I bet certain people round here who bang on about ETF's like they are the best thing since sliced bread have not actually read the associated prospectus !
There are broadly-speaking two types of ETFs. Physical and Synthetic and Physical ETFs are in the minority !
I may regret challenging you on this, but is this actually true? Anecdotally, I know that Vanguard's ETF's are overwhelmingly physical in nature. Less anecdotally, this article seems to suggest that synthetic ETF's are an endangered species and are already handily outnumbered by physical ETF's. From the article: "Today, three-quarters of ETF assets under management are held in physicals. And the trend is set to continue as physical product launches predominate while existing synthetics are converted to physical replication"I think that most iShares are physical, too. (Not saying all...)
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r00lish67
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Post by r00lish67 on Oct 14, 2019 10:44:57 GMT
Well, the underlying point remains .... read the f'in prospectus before diving in.
Three-quarters pysical sounds a little optimistic given the main attraction to those running ETFs is that synthetic is cheaper to operate ? Maybe "majority" was the wrong word, but I'm not sure I'd go as far as saying they're in decline either ?
Well, I have to say I'd be surprised if they're not in decline. Love 'em or hate 'em, as I'm sure you well know Vanguard et al are ludicrously popular and certainly in Vanguard's case (quick google) they apparently don't even do synthetic ETF's at all anymore.
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hazellend
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Post by hazellend on Oct 14, 2019 11:24:23 GMT
I think that most iShares are physical, too. (Not saying all...)
This is the point I regret glossing over the caveats of the Physical ETFs !
You are not necessarily clear of counterparty risk in the Physical ETF world. I quote from an iShares prospectus :
The Fund may engage in securities lending. Securities lending involves the risk that the Fund may lose money because the borrower of the loaned securities fails to return the securities in a timely manner or at all. The Fund could also lose money in the event of a decline in the value of collateral provided for loaned securities or a decline in the value of any investments made with cash collateral.These events could also trigger adverse tax consequences for the Fund.
That does not seem to be a risk worth bothering about. I’m not saying it couldn’t happen, but I’m not worried about it. I haven’t checked vanguard but I presume they do the same. ETF is a very broad term and ranges from very niche stuff like robotics to massive global passive trackers. I stick to the massive passive trackers and would avoid the niche stuff like the plague personally
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Post by dan1 on Oct 14, 2019 19:53:59 GMT
This is the point I regret glossing over the caveats of the Physical ETFs !
You are not necessarily clear of counterparty risk in the Physical ETF world. I quote from an iShares prospectus :
The Fund may engage in securities lending. Securities lending involves the risk that the Fund may lose money because the borrower of the loaned securities fails to return the securities in a timely manner or at all. The Fund could also lose money in the event of a decline in the value of collateral provided for loaned securities or a decline in the value of any investments made with cash collateral.These events could also trigger adverse tax consequences for the Fund.
That does not seem to be a risk worth bothering about. I’m not saying it couldn’t happen, but I’m not worried about it. I haven’t checked vanguard but I presume they do the same. ETF is a very broad term and ranges from very niche stuff like robotics to massive global passive trackers. I stick to the massive passive trackers and would avoid the niche stuff like the plague personally If BlackRock (whose ETF products are provided under the iShares name) and Vanguard were to fail their investors in terms of counterparty risk then we'll all have far more important concerns than the value of our investments. BlackRock and Vanguard are not household names, you most likely won't have heard of them if you don't manage your own investments, but they are megaliths in the global financial ecosystem. Between them they manage over $11 trillion of assets,... to put that into context the GDP of the UK is less than $3 trillion. ETFs are the biggest threat to traditional asset managers, and the growth of ETFs has cost them billions of dollars of lost fees. The continuing backlash against ETFs is inevitable after all criticism is a sign of success.
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Post by dan1 on Oct 14, 2019 21:17:26 GMT
BlackRock and Vanguard are not household names, you most likely won't have heard of them if you don't manage your own investments, but they are megaliths in the global financial ecosystem. Between them they manage over $11 trillion of assets,... to put that into context the GDP of the UK is less than $3 trillion. The old "too big to fail" eh dan1 Not at all @wallstreet , to quote myself (notably omitted from your quote of mine )... If BlackRock (whose ETF products are provided under the iShares name) and Vanguard were to fail their investors in terms of counterparty risk then we'll all have far more important concerns than the value of our investments. What would happen if 60% of the GDP of USA vanished overnight?
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sd2
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Post by sd2 on Oct 16, 2019 9:43:51 GMT
Any answers on can they be gated? If the answer is no then I suspect any crash or even a bear market will be made much worse. In the case of investment trusts the fall in the share price far exceeds the fall in the NAV BUT the investment trusts do not sell the underlying shares. That is proof that etf are very big risk to a fall in share prices and therefore people's pensions at least in the short term.
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bigfoot12
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Post by bigfoot12 on Oct 16, 2019 12:37:17 GMT
Any answers on can they be gated? If the answer is no then I suspect any crash or even a bear market will be made much worse. In the case of investment trusts the fall in the share price far exceeds the fall in the NAV BUT the investment trusts do not sell the underlying shares. That is proof that etf are very big risk to a fall in share prices and therefore people's pensions at least in the short term. There are a lot of different ETFs you would need to read the Ts&Cs. And be more clear on what you mean by gated. After 9/11 several stock markets around the world closed. Many other stock markets close more often. Some stock markets have automatic circuit breakers which close stocks on large declines..... What happens if an ETF investing in another market see that market close? What happens if an underlying market is in a country with sanctions applied? I don't see any proof. The discount on ITs might be seen as confidence in the fund manager, combined with confidence in the NAV valuation, combined with some sort of temporary liquidity demand. These wouldn't normally apply to ETFs, even in a normal stock market crash. Why are people's pensions more at risk from an investment which is priced at fair value, than one priced at a discount to that value? And what would the alternative be. Many pensions are in funds which track the major indices, either openly or surreptitiously. Why are they different so much better?
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