hazellend
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Post by hazellend on Oct 16, 2019 13:27:16 GMT
If the all world index crashed by 80% I would expect the all world ETF to crash by the same amount. The vanguard ETF has a history of tracking its index pretty much perfectly. Any investment trusts/fund/hedge fund manager could be the next Neil Woodford. Yes the next star might be out there but you only know in hindsight.
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macq
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Post by macq on Oct 16, 2019 14:19:56 GMT
The same could be true of p2p unfortunately as hindsight may well come in to play with all of us who think we are our own managers picking loans.As we all think we can spot a dud or spot a winner or the next big market etc over the fund tracker equivalent of p2p Blackbox accounts
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hazellend
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Post by hazellend on Oct 16, 2019 17:24:34 GMT
The same could be true of p2p unfortunately as hindsight may well come in to play with all of us who think we are our own managers picking loans.As we all think we can spot a dud or spot a winner or the next big market etc over the fund tracker equivalent of p2p Blackbox accounts I am getting out of P2P, because I’m rubbish at it
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sd2
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Post by sd2 on Oct 16, 2019 21:20:13 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? Gated as in Woodford equity, ie you cant take your money out. Therefore they dont have to sell the shares. A discount to nav for investment trust is hardly a sign of confidence in the manager or in nav valuation. See Woodford patient capital trust (40% discount) Valuation on nearly all investment trusts are based on actual price of the shares the Trust owns (the majority of which are quoted) My point which you have not grasped is that if etf can't be gated then the retail investor will continue to sell and cant be stopped. The fact that circuit breakers exist is basically the same as gating the market!! As soon as it's "ungated " the retail investor will start selling again. In fact closing the market "may" encourage it. It doesn't change the fact that Joe blogs is always the one that panic sells not institutes because A they have seen it all before B they can't because they own to many shares and market makers would tell them where to go. Pensions are always affected by fall in the market. My point (again) is that the market will fall further than it would do if etf didn't exist, got it?
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sd2
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Post by sd2 on Oct 16, 2019 21:32:37 GMT
If the all world index crashed by 80% I would expect the all world ETF to crash by the same amount. The vanguard ETF has a history of tracking its index pretty much perfectly. Any investment trusts/fund/hedge fund manager could be the next Neil Woodford. Yes the next star might be out there but you only know in hindsight. I You don't need hindsight as there are plenty of managers who have a long history of beating the markets. You have that the wrong way round as in you dont know whose stock picking ability is going to fall over a cliff. In the case of Woodford he went from being a value investor to being "I can see that this start up is going to be the next Alphabet" Clearly way outside his comfort zone, so not relevant to most managers who have long history of beating the market. As long as they stick to what they are good at.
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sd2
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Post by sd2 on Oct 16, 2019 21:36:24 GMT
The same could be true of p2p unfortunately as hindsight may well come in to play with all of us who think we are our own managers picking loans.As we all think we can spot a dud or spot a winner or the next big market etc over the fund tracker equivalent of p2p Blackbox accounts I am getting out of P2P, because I’m rubbish at it Hi hows has it gone wrong for you?
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hazellend
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Post by hazellend on Oct 16, 2019 21:42:47 GMT
I am getting out of P2P, because I’m rubbish at it Hi hows has it gone wrong for you? Collateral and Lendy. Other than that it’s been ok. With hindsight I was totally naive regarding lendy. I think my lack of skill is mainly in assessing platforms rather than the loans. Also got caught off guard by property partner but got out with a decent profit even after fire sale to get out.
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sd2
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Post by sd2 on Oct 16, 2019 21:50:52 GMT
The same could be true of p2p unfortunately as hindsight may well come in to play with all of us who think we are our own managers picking loans.As we all think we can spot a dud or spot a winner or the next big market etc over the fund tracker equivalent of p2p Blackbox accounts Very very true. You often here pundits like this www.financialthing.com/holdings/. He invested in lendy and collateral. While constantly saying you have to do due diligence. He's also prefers to pick who he lends to, didn't help spot the catastrophic collapse of either.
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sd2
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Post by sd2 on Oct 16, 2019 22:01:40 GMT
Hi hows has it gone wrong for you? Collateral and Lendy. Other than that it’s been ok. With hindsight I was totally naive regarding lendy. I think my lack of skill is mainly in assessing platforms rather than the loans. Also got caught off guard by property partner but got out with a decent profit even after fire sale to get out. What has gone wrong with property partner? hardly a collateral or lendy. I have no actual worries about property partner as I am happy to sit out for 4/5 years to the selling date. Also it doesn't have much of my money anyway. Although if assertz exchange was around I would have chosen them as they appear to be buying without a mortgages...lower risk lower returns. Unlike collateral and lendy. I see your point abut assessing platforms and not loans.
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Post by Ace on Oct 16, 2019 22:11:43 GMT
If the all world index crashed by 80% I would expect the all world ETF to crash by the same amount. The vanguard ETF has a history of tracking its index pretty much perfectly. Any investment trusts/fund/hedge fund manager could be the next Neil Woodford. Yes the next star might be out there but you only know in hindsight. I You don't need hindsight as there are plenty of managers who have a long history of beating the markets. You have that the wrong way round as in you dont know whose stock picking ability is going to fall over a cliff. In the case of Woodford he went from being a value investor to being "I can see that this start up is going to be the next Alphabet" Clearly way outside his comfort zone, so not relevant to most managers who have long history of beating the market. As long as they stick to what they are good at. Surely that's the very definition of hindsight. It's managers with a long future of beating markets that are required, not the ones with long histories. The two groups are not the same, hence the problem.
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sd2
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Post by sd2 on Oct 17, 2019 11:23:22 GMT
You don't need hindsight as there are plenty of managers who have a long history of beating the markets. You have that the wrong way round as in you dont know whose stock picking ability is going to fall over a cliff. In the case of Woodford he went from being a value investor to being "I can see that this start up is going to be the next Alphabet" Clearly way outside his comfort zone, so not relevant to most managers who have long history of beating the market. As long as they stick to what they are good at. Surely that's the very definition of hindsight. It's managers with a long future of beating markets that are required, not the ones with long histories. The two groups are not the same, hence the problem. I was suggesting they are a better bet than etf which consistently fail to beat the market!!!
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hazellend
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Post by hazellend on Oct 17, 2019 22:14:41 GMT
It doesn't change the fact that Joe blogs is always the one that panic sells not institutes because A they have seen it all before B they can't because they own to many shares and market makers would tell them where to go.
Joe Blogs is indeed always the panic selling fool that is very helpfully providing the liquidity for the institutions to buy up.
The Joe Blogs types who panic sold in 2008 did themselves no favours.
As for the instiutions ....
Yes, they've seen it all before.
But beyond that, its not only a case of "having too many shares".
Its also a case of other professional things. Such as having remits (e.g. you might be a portfolio manager and the trustees might have set you a CGT cap which you can't breach without their permission, or you might be a fund manager in which case what's the point of calling yourself a fund manager if you panic sell and just sit on cash... if people buying your fund wanted to sit on cash they could put it in the bank ), or having a better constructed portfolio which is better positioned to weather the storm.
The point I'm making is that "instutitions" is a broad term and there's many reasons why they can't or won't sell in a heavy down market. The only thing that unites all sides of institutional trading is point number one, they've seen it all before. Which is why institutions are more likely to be either buying or tweaking rather than downright panic selling and sitting on piles of cash.
Buy and hold beats the vast majority of individual investors and institutions of course. Unfortunately, many people chose an asset allocation which is not right for them and this does create the selling out in a crash phenomenon (partly due to fear and partly due to people losing their jobs and needing to sell equities for cash)
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hazellend
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Post by hazellend on Oct 17, 2019 23:10:57 GMT
due to people losing their jobs and needing to sell equities for cash
Rule number one.
You only invest money you can afford to loose.
Rule number two.
You should always have six months to a year's salary in a rainy-day account in a boring bank account.
If you can't achive number two, then you most likely don't have money you can afford to loose and thus should not be investing.
End of non-negotiable story. Greed kills finances.
Wow I actually completely agree with you for once
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sd2
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Post by sd2 on Oct 20, 2019 13:00:44 GMT
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