chiangmai
Crazy Mango Extraordinaire
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Post by chiangmai on Sept 26, 2021 5:30:35 GMT 7
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Post by rgs2001uk on Sept 27, 2021 20:57:59 GMT 7
we all (mostly) understand that we need to monitor and adjust our funds and investment sectors because economic circumstances change However, for best returns we should not be changing because we fear something may or may not happen in the next couple of years, or perhaps even decade. Most of what we read in the financial pages is simply short term noise, and shouldn't put us off course. The significant changes to economic circumstances are on the scale of decades, or even longer. For example, coal and tobacco companies are probably facing a long term decline. However, they may continue to perform well globally for the next 23, 30, 40 years. It would be premature to ditch shares in them based upon their economic prospects. (However, one may wish to eschew them on moral grounds.) we also need to reassess risk and timeframes as well because these are equally as fluid. Not sure if you mean "market risk", or personal attitude to risk. The former should be an irrelevance if one's investment horizon is more than 5 years. (And if it's less than 5 years one shouldn't be investing in equity markets at all.) The latter really doesn't change much. Once a nervous nelly, always a nervous nelly; once a fearless honey badger, always a fearless honey badger. I hear somebody say, ah yes, but this is why I use good quality Fund Managers or this is what my broker is for ... they are very unlikely to consider your risk tolerance. Of course, fund managers don't consider your personal risk tolerance - they are managing pooled investments. However, if you've ever used a traditional broker, pretty much the first thing they do is get you to fill in a questionnaire to assess your attitude to risk. Here are a couple of examples of such questionnaires: retirementplans.vanguard.com/VGApp/pe/PubQuizActivitywww.financial-expert.co.uk/investing-risk-appetite-questionnaire-tolerance/(The questionnaires used professionally are usually proprietary, so aren't available on the web. They also have substantially more questions.)I filled one in recently, had about 60 questions. My first attempt was to write, no change see last time on it. Not good enough, had to fill the whole thing in, all about KYC. What boils my p**s is, I had to fill in a form so someone could tell me what I already know, willing to take above average risk for above average returns.
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Post by rgs2001uk on Sept 27, 2021 21:00:32 GMT 7
Thats why I fill in KYC paperwork and talk to my stockbroker. If you are happy enough to take a 5-10% rise in your portfolio that means you are also prepared to take the same hit. Risk Vs reward.
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Post by rgs2001uk on Sept 28, 2021 21:45:01 GMT 7
we all (mostly) understand that we need to monitor and adjust our funds and investment sectors because economic circumstances change However, for best returns we should not be changing because we fear something may or may not happen in the next couple of years, or perhaps even decade. Most of what we read in the financial pages is simply short term noise, and shouldn't put us off course. The significant changes to economic circumstances are on the scale of decades, or even longer. For example, coal and tobacco companies are probably facing a long term decline. However, they may continue to perform well globally for the next 23, 30, 40 years. It would be premature to ditch shares in them based upon their economic prospects. (However, one may wish to eschew them on moral grounds.) we also need to reassess risk and timeframes as well because these are equally as fluid. Not sure if you mean "market risk", or personal attitude to risk. The former should be an irrelevance if one's investment horizon is more than 5 years. (And if it's less than 5 years one shouldn't be investing in equity markets at all.) The latter really doesn't change much. Once a nervous nelly, always a nervous nelly; once a fearless honey badger, always a fearless honey badger. I hear somebody say, ah yes, but this is why I use good quality Fund Managers or this is what my broker is for ... they are very unlikely to consider your risk tolerance. Of course, fund managers don't consider your personal risk tolerance - they are managing pooled investments. However, if you've ever used a traditional broker, pretty much the first thing they do is get you to fill in a questionnaire to assess your attitude to risk. Here are a couple of examples of such questionnaires: retirementplans.vanguard.com/VGApp/pe/PubQuizActivitywww.financial-expert.co.uk/investing-risk-appetite-questionnaire-tolerance/(The questionnaires used professionally are usually proprietary, so aren't available on the web. They also have substantially more questions.) For a bit of fun, filled this in. Came out as a balanced investor, not sure my stockbroker or others on here would agree, . You see investments as a way to grow your wealth and you take a long term view when setting expectations. By focusing on the destination, you can accept the risk of capital losses in the short term. Agree 100%When picking shares or funds, you would prefer to invest in well-managed companies in highly regulated countries. This helps to avoid violent volatility associated with political and economic turmoil in far-flung places. Agree 100%, hence why I choose old established ITs with long established track records, have also mentioned before, there are parts of the world I wont touch with a bargepole. You feel that your money should always be working at its hardest. You seek to limit the percentage of your portfolio in cash or bonds because of the downward drag they have on overall returns. Again agree 100% hence why bonds play no part of my portfolio.
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chiangmai
Crazy Mango Extraordinaire
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Post by chiangmai on Sept 29, 2021 2:45:20 GMT 7
Balanced, how insulting.
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chiangmai
Crazy Mango Extraordinaire
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Post by chiangmai on Sept 29, 2021 5:47:08 GMT 7
MNP down another 2.7% overnight, at least my holdings are, this is not good.
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AyG
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Post by AyG on Sept 29, 2021 6:12:14 GMT 7
^^^ I can beat that! JEO down 3.0%, THRG down 3.5%, and JEDT (formerly JESC) down 3.9%.
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chiangmai
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Post by chiangmai on Sept 29, 2021 6:32:28 GMT 7
^^^ I can beat that! JEO down 3.0%, THRG down 3.5%, and JEDT (formerly JESC) down 3.9%. Well I never! I mentioned MNP because it's the biggest faller of all my current holdings, everything else is either down a small amount or up. Presumably this is about bond yields being up. the 10 year is up 3.4%, which of course is driven by inflation expectations, your TIPS should do well. The supply and demand of oil, which is causing oil prices to spike seems very secondary, plus the US DI continues to climb. Rumor has it that the current inflation is not real and will fall back before long, if that doesn't happen it's probably best to avoid walking under tall buildings in the financial district for fear of falling objects.
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AyG
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Post by AyG on Sept 29, 2021 7:07:12 GMT 7
^^^ Also tightening money supply (i.e. moving, very slowly, back to normal after years of loose cash), and the fall in the value of Sterling (despite Bank of England indications that it's going to raise interest rates).
As for my TIPS, I sold them a while back.
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chiangmai
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Post by chiangmai on Sept 29, 2021 7:26:00 GMT 7
^^^ Also tightening money supply (i.e. moving, very slowly, back to normal after years of loose cash), and the fall in the value of Sterling (despite Bank of England indications that it's going to raise interest rates). As for my TIPS, I sold them a while back. Interesting, it sounds like you also now think the current bout of inflation is only fleeting? If it is, I don't see how it squares with significant rises in asset prices, something has to give.
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AyG
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Post by AyG on Sept 29, 2021 8:34:07 GMT 7
Actually, I don't think the current inflation is only fleeting. I think we're moving back to a more normal situation with fairly steady inflation in the 2-4% p.a. range. At least, I hope we are.
My reasons for selling my TIPS and Index-linked Gilts were twofold. (1) I realised I didn't understand the product - they performed very well during the early stages of the pandemic, even though inflation was low. I try to avoid products I don't understand. (2) Looking at the 10 year annualised performance, for INXG (index-linked gilts) it's 6.9%, and for TIPS it's similar. It's below my hurdle rate.
I haven't abandoned inflation protection. I just now do it with infrastructure funds (not investment trusts).
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chiangmai
Crazy Mango Extraordinaire
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Post by chiangmai on Sept 29, 2021 8:41:48 GMT 7
I agree it's not fleeting, the alternative is a steep crash in assets prices which would be devastating.
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Post by rgs2001uk on Sept 30, 2021 21:11:49 GMT 7
Au contraire mon amigo, perfectly balanced I would say, I have a chip on both shoulders, one for jobsworths and the other for boxtickers.
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Post by rgs2001uk on Sept 30, 2021 21:13:37 GMT 7
MNP down another 2.7% overnight, at least my holdings are, this is not good. Wimp, take a look at Croda, and then get down on your knees and give thanks to whatever diety you worship that you dont hold it. ,
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Post by rgs2001uk on Sept 30, 2021 21:14:30 GMT 7
^^^ I can beat that! JEO down 3.0%, THRG down 3.5%, and JEDT (formerly JESC) down 3.9%. Good man, now we are sorting out the wheat from the chaff.
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