chiangmai
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Post by chiangmai on Sept 27, 2017 6:44:09 GMT 7
On that point of the Pounds future:
The range of possible options is massive, at each end are a) a run on the Pound if Labour gets in with a Pound probably being worth less than one US Dollar, and, b) a second Brexit vote being called and the population realising it does not wish to leave the EU, in which case the Pound would soar by at least 20% to around 1.60. It makes me think about what a huge gamble it is to hold Sterling investments and how much money I want to risk, imagine how tough it must be for an investment fund manager. Do you know which way it's going to go and are you sufficiently confident to gamble your pension on it, I'm not?
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chiangmai
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Post by chiangmai on Sept 29, 2017 7:48:59 GMT 7
Lots of people talking about how it is unwise to hold UK equities in light of Brexit, the Trustnet article below reasons that's silly, I quote: "Hollands is currently underweight gilts with a preference for equities and deems the UK equity market to be fairly valued. While he is not significantly overweight the market area, he believes a lot of funds that invest further down the market cap spectrum have been sold off as a knee-jerk reaction. “A lot of this is to do with fears about Brexit which we think are unmerited to the extent that the UK equity market is not the UK economy,” he reasoned. “Even mid caps in aggregate deliver half of their revenues outside of the UK. “It is common to mistake the UK equity market as some kind of proxy play on the UK domestic economy.” www.trustnet.com/news/760308/do-rising-gilt-yields-mean-you-should-buy-small-cap-funds-now?utm_source=Trustnet%20Newsletters&utm_campaign=8d91803292-20170928_Investor9_28_2017&utm_medium=email&utm_term=0_2314bd04ee-8d91803292-77275453Makes sense, except the author seems to have missed out the fact that the domestic economy determines the strength of the Pound and whilst much of the FTSE earnings may well be from overseas, Sterling strength or weakness is key....anyone?
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chiangmai
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Post by chiangmai on Sept 29, 2017 18:41:02 GMT 7
To be honest I don't bother checking the day to day prices of my investment portfolios, and explaining the day to day movements would be a thankless task, so I wouldn't worry about not understanding the movements over 10 days. If you're trading (short term) then yes you need to understand the factors driving things and check prices at least daily. There are too many factors all impacting. Two broad categories are 1) systemic market movements and 2) idiosyncratic movements specific to a) the fund and b) the underlying companies in the funds. These in turn are driven by so many factors like FX rates, interest rates, supply and demand, sentiment, geopolitics, economic numbers, jobless claims, housing index etc etc etc. Plus a lot of what people refer to as just "noise". Sometimes even a Tweet form Donald Chump. Markets are also not perfect and sometimes there are leads and lags in any impacts so the timings are messed up anyway. So for investments I check the prices each month end. Only if there are some big or unusual movements in individual funds would I look further at those funds. e.g Woodford's underperformance recently was worth looking into why and identifying the specific holdings he had. Not down to the market generally but his stock selection. If the investment portfolio is longer term then day to day prices don't matter so much. It's the longer term trends that counts. Significant market events with large market movements are worth a look though as one-offs across everything. To see how shocks or stress events impact your portfolio. e.g. a market crashes, Brexit vote outcome etc. But these to me are the exception rather than the rule. Well worth doing but don't happen 99 days out of a hundred. Trying to explain and understand day to day can otherwise can be very time consuming and result in you tearing your hair out. Worst still would be acting on the changes. I like the saying of: The understanding often comes better with time and hindsight. One of the many advantages seasoned investors has over the newbies is of course experience of events and performance hence they know what to expect and what is likely to happen in different scenarios. These past eight weeks have been invaluable to me from a learning perspective because I know have a better feel for the relationship between funds and indicies. I have to say though that downloading my portfolio each day is not something that's done my stomach acid any good! But as a result I now have a better understanding of what I do and do not want from a portfolio, for example, I DO want more than 15% exposure to US markets, it's the largest economy in the world and to not have a proportional part of it seems silly. I've also decided it's foolish to drop my UK holdings to a low level, reasons for this include an undecided Brexit outcome and FTSE earnings from overseas. I've also decided that MA funds are potentially very useful in that they are more likely to know what they're doing when it comes to Bond funds and equity offsets than I do, as a result my second investment portfolio has changed quite substantially and with less than a week away from my deadline, looks like this: Baillie Gifford International Schroder High Yield Opportunities Z Acc Twenty Four AM Dynamic Bond Fund Fidelity Money Builder (fixed interest) Fundsmith Equity T iShares £ (index-linked) Gilts UCITS ETF GBP Lindsell Train Global Equities. Premier Multi-Asset Distribution C Inc 70/30 Baillie Gifford Managed B 60/40 Royal London Extra Yield (fixed interest) Schroder Small Cap Discovery Fidelity Asia W The geographic spread looks like this: UK 18% US 27% EU 12% Asia 9% Japan 4% India 5% Taiwan 4% China 3% Aus/NZ 1% Emerg. 8% Other 11% That works out at 61% in developed economies and 39% in emerging. Finally, I've decided to drop Stewart Asian Leaders in favour of Fidelity Asia, whatever is going on at Stweart is not working well.
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Post by rgs2001uk on Sept 29, 2017 21:44:03 GMT 7
The head of Investments at Rathbones is hardly a double glazing salesman! I don't know about their funds but as a stand-alone piece, I think it is very good since it verbalizes the dilemma's facing many businesses. It's what Brexit equivalents would have called project fear which has turned out to be mostly true, oddly, many of us knew that at the time and were hugely surprised to see it all dismissed as rhetoric at the time. I was being somewhat fliipant, its seems like every other day I turn on the telly the bbc have dragged up some obscure talking head to give his views, thankfully there are alternatives. Exchange rates I consider to being nothing more than part of the expat package, if you cant handle the heat, get out the kitchen and head back to jolly old blighty where a quid will always be a quid. As for market volatility, well theres alway the bank to park your savings. Of course the other alternative is to cash in your chips right now and transfer the lot to Thailand, removes the worry of brexit and exchange rate fears, not something I would recommend.
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Post by rgs2001uk on Sept 29, 2017 21:51:14 GMT 7
To be honest I don't bother checking the day to day prices of my investment portfolios, and explaining the day to day movements would be a thankless task, so I wouldn't worry about not understanding the movements over 10 days. If you're trading (short term) then yes you need to understand the factors driving things and check prices at least daily. There are too many factors all impacting. Two broad categories are 1) systemic market movements and 2) idiosyncratic movements specific to a) the fund and b) the underlying companies in the funds. These in turn are driven by so many factors like FX rates, interest rates, supply and demand, sentiment, geopolitics, economic numbers, jobless claims, housing index etc etc etc. Plus a lot of what people refer to as just "noise". Sometimes even a Tweet form Donald Chump. Markets are also not perfect and sometimes there are leads and lags in any impacts so the timings are messed up anyway. So for investments I check the prices each month end. Only if there are some big or unusual movements in individual funds would I look further at those funds. e.g Woodford's underperformance recently was worth looking into why and identifying the specific holdings he had. Not down to the market generally but his stock selection. If the investment portfolio is longer term then day to day prices don't matter so much. It's the longer term trends that counts. Significant market events with large market movements are worth a look though as one-offs across everything. To see how shocks or stress events impact your portfolio. e.g. a market crashes, Brexit vote outcome etc. But these to me are the exception rather than the rule. Well worth doing but don't happen 99 days out of a hundred. Trying to explain and understand day to day can otherwise can be very time consuming and result in you tearing your hair out. Worst still would be acting on the changes. I like the saying of: The understanding often comes better with time and hindsight. One of the many advantages seasoned investors has over the newbies is of course experience of events and performance hence they know what to expect and what is likely to happen in different scenarios. These past eight weeks have been invaluable to me from a learning perspective because I know have a better feel for the relationship between funds and indicies. I have to say though that downloading my portfolio each day is not something that's done my stomach acid any good! But as a result I now have a better understanding of what I do and do not want from a portfolio, for example, I DO want more than 15% exposure to US markets, it's the largest economy in the world and to not have a proportional part of it seems silly. I've also decided it's foolish to drop my UK holdings to a low level, reasons for this include an undecided Brexit outcome and FTSE earnings from overseas. I've also decided that MA funds are potentially very useful in that they are more likely to know what they're doing when it comes to Bond funds and equity offsets than I do, as a result my second investment portfolio has changed quite substantially and with less than a week away from my deadline, looks like this: Baillie Gifford International Schroder High Yield Opportunities Z Acc Twenty Four AM Dynamic Bond Fund Fidelity Money Builder (fixed interest) Fundsmith Equity T iShares £ (index-linked) Gilts UCITS ETF GBP Lindsell Train Global Equities. Premier Multi-Asset Distribution C Inc 70/30 Baillie Gifford Managed B 60/40 Royal London Extra Yield (fixed interest) Schroder Small Cap Discovery Fidelity Asia W The geographic spread looks like this: UK 18% US 27% EU 12% Asia 9% Japan 4% India 5% Taiwan 4% China 3% Aus/NZ 1% Emerg. 8% Other 11% That works out at 61% in developed economies and 39% in emerging. Finally, I've decided to drop Stewart Asian Leaders in favour of Fidelity Asia, whatever is going on at Stweart is not working well. Thats a heck of a spread, 3:2 ratio, not for me, but have at it.
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chiangmai
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Post by chiangmai on Sept 30, 2017 3:03:16 GMT 7
One of the many advantages seasoned investors has over the newbies is of course experience of events and performance hence they know what to expect and what is likely to happen in different scenarios. These past eight weeks have been invaluable to me from a learning perspective because I know have a better feel for the relationship between funds and indicies. I have to say though that downloading my portfolio each day is not something that's done my stomach acid any good! But as a result I now have a better understanding of what I do and do not want from a portfolio, for example, I DO want more than 15% exposure to US markets, it's the largest economy in the world and to not have a proportional part of it seems silly. I've also decided it's foolish to drop my UK holdings to a low level, reasons for this include an undecided Brexit outcome and FTSE earnings from overseas. I've also decided that MA funds are potentially very useful in that they are more likely to know what they're doing when it comes to Bond funds and equity offsets than I do, as a result my second investment portfolio has changed quite substantially and with less than a week away from my deadline, looks like this: Baillie Gifford International Schroder High Yield Opportunities Z Acc Twenty Four AM Dynamic Bond Fund Fidelity Money Builder (fixed interest) Fundsmith Equity T iShares £ (index-linked) Gilts UCITS ETF GBP Lindsell Train Global Equities. Premier Multi-Asset Distribution C Inc 70/30 Baillie Gifford Managed B 60/40 Royal London Extra Yield (fixed interest) Schroder Small Cap Discovery Fidelity Asia W The geographic spread looks like this: UK 18% US 27% EU 12% Asia 9% Japan 4% India 5% Taiwan 4% China 3% Aus/NZ 1% Emerg. 8% Other 11% That works out at 61% in developed economies and 39% in emerging. Finally, I've decided to drop Stewart Asian Leaders in favour of Fidelity Asia, whatever is going on at Stweart is not working well. Thats a heck of a spread, 3:2 ratio, not for me, but have at it My apologies but I was too vague, the numbers I quoted are for the equities only element plus they are misleading. For equities only, for the parts that can be clearly identified, it's 63% developed and 27% emerging. But even within equity only funds there are portions where the type and/or region allocation remains unclear, the remaining 10% is "not identified" so it could be cash, derivatives, etc and not necessarily emerging markets. So for equities only, in reality, that 10% is likely to be a part of the developed segment hence the bottom line is more likely to be 73% developed and 27% emerging. Overall, including bonds etc, the balance is 81% developed, 19% emerging.
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chiangmai
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Post by chiangmai on Sept 30, 2017 9:14:31 GMT 7
I was just looking to define emerging markets and it seems not everyone agrees. I wouldn't have included Taiwan and Hong Kong but it seems others do, one of them now being very clearly a part of China. But from an investment standpoint, I might have excluded Taiwan from the list and I would definitely have excluded HK, despite its new ownership. India is also defined as emerging and I agree, classifications such as Asia, however, are too vague for me to easily allocate since it might include Singapore and Hong Kong - all of the above reduces my allocation to emerging markets equities in the range now of between 21% and 27% and overall to under 12%. www.investopedia.com/terms/e/emergingmarketeconomy.asp
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AyG
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Post by AyG on Sept 30, 2017 9:57:52 GMT 7
I was just looking to define emerging markets and it seems not everyone agrees. I wouldn't have included Taiwan and Hong Kong but it seems others do The Economist agrees with you www.economist.com/node/12080703
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Post by rgs2001uk on Sept 30, 2017 21:21:45 GMT 7
Thats a heck of a spread, 3:2 ratio, not for me, but have at it My apologies but I was too vague, the numbers I quoted are for the equities only element plus they are misleading. For equities only, for the parts that can be clearly identified, it's 63% developed and 27% emerging. But even within equity only funds there are portions where the type and/or region allocation remains unclear, the remaining 10% is "not identified" so it could be cash, derivatives, etc and not necessarily emerging markets. So for equities only, in reality, that 10% is likely to be a part of the developed segment hence the bottom line is more likely to be 73% developed and 27% emerging. Overall, including bonds etc, the balance is 81% developed, 19% emerging.Wow balls of steel, almost 20% in EM, Just had a quick look at my portfolio, EM is about 3% of my holdings.
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chiangmai
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Post by chiangmai on Oct 1, 2017 3:26:40 GMT 7
My apologies but I was too vague, the numbers I quoted are for the equities only element plus they are misleading. For equities only, for the parts that can be clearly identified, it's 63% developed and 27% emerging. But even within equity only funds there are portions where the type and/or region allocation remains unclear, the remaining 10% is "not identified" so it could be cash, derivatives, etc and not necessarily emerging markets. So for equities only, in reality, that 10% is likely to be a part of the developed segment hence the bottom line is more likely to be 73% developed and 27% emerging. Overall, including bonds etc, the balance is 81% developed, 19% emerging.Wow balls of steel, almost 20% in EM, Just had a quick look at my portfolio, EM is about 3% of my holdings. It's not what you suggest rgs, let me try and explain: I have two funds, Fidelity Asia and Schroeder Small Cap Discovery, each of which comprises 20% EM, a third one, Baillie Gifford International also contains 22% EM. If I remove the first two I can reduce my EM holdings down to less than 6% but in doing so I cease any investment in China, India, HK, Taiwan and many other parts of Asia and to me that seems really silly since they represent huge economies and would be a really missed opportunity. Alternatively, I could achieve a similar outcome by removing the Baillie Gifford International fund but if I did so I'd remove a significant portion of my US and EU investments and that doesn't make sence either. From what I've read on other UK investment forums, people in Brit land at least are very scared of anything outside of the traditional investment areas of UK, US and EU and are only happy to dip a small toe into other "more adventurous" areas. But for those of us that have worked, lived and traveled this region for any period of time, we will know that Asia and The Far East contains massive untapped potential and economies that are the envy of the Western world, so it's not so much a steel balls thing as it is about having a decent understanding of what this region contains. Remember some of the comments on TVF from Americans and Brits who say they will never bring money into Thailand and all their banking is done with Schwab US, honestly, I think those people are flat earth types, I really do, at least half of my wealth today is as a direct result of investing in Thailand! But as discussed subsequently a persons definition of EM is absolutely at the heart of this debate and is key and vital, last night I did some reclassifications of regions and I'm now to a point where I'm comfortable that my portfolio contains about 12% EM using classifications that most people would agree with. But there are still funds out there that choose to use a bucket called Asia as a convenient place to group funds, without trying to distinguish between developed and emerging markets. So my EM number may yet be even lower but that doesn't mean I'm not invested in Asia and the FE to the tune of about 25%, the true EM segment of that, however, may be as low as 10%.
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chiangmai
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Post by chiangmai on Oct 1, 2017 18:08:07 GMT 7
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Post by rgs2001uk on Oct 2, 2017 21:11:04 GMT 7
Wow balls of steel, almost 20% in EM, Just had a quick look at my portfolio, EM is about 3% of my holdings. It's not what you suggest rgs, let me try and explain: I have two funds, Fidelity Asia and Schroeder Small Cap Discovery, each of which comprises 20% EM, a third one, Baillie Gifford International also contains 22% EM. If I remove the first two I can reduce my EM holdings down to less than 6% but in doing so I cease any investment in China, India, HK, Taiwan and many other parts of Asia and to me that seems really silly since they represent huge economies and would be a really missed opportunity. Alternatively, I could achieve a similar outcome by removing the Baillie Gifford International fund but if I did so I'd remove a significant portion of my US and EU investments and that doesn't make sence either. From what I've read on other UK investment forums, people in Brit land at least are very scared of anything outside of the traditional investment areas of UK, US and EU and are only happy to dip a small toe into other "more adventurous" areas. But for those of us that have worked, lived and traveled this region for any period of time, we will know that Asia and The Far East contains massive untapped potential and economies that are the envy of the Western world, so it's not so much a steel balls thing as it is about having a decent understanding of what this region contains. Remember some of the comments on TVF from Americans and Brits who say they will never bring money into Thailand and all their banking is done with Schwab US, honestly, I think those people are flat earth types, I really do, at least half of my wealth today is as a direct result of investing in Thailand! But as discussed subsequently a persons definition of EM is absolutely at the heart of this debate and is key and vital, last night I did some reclassifications of regions and I'm now to a point where I'm comfortable that my portfolio contains about 12% EM using classifications that most people would agree with. But there are still funds out there that choose to use a bucket called Asia as a convenient place to group funds, without trying to distinguish between developed and emerging markets. So my EM number may yet be even lower but that doesn't mean I'm not invested in Asia and the FE to the tune of about 25%, the true EM segment of that, however, may be as low as 10%. A lot of truth in what you say ref holdings, when I say 3%, I was talking about my holdings in Templeton and JP Morgam Em Invest Trusts, no doubt my other ITs will have a holding in some EMs, truth is I cant be assed researching their top 10 holdings etc. I have nothing against them personally, my reasons for not going overboard on them are, I feel there is better value to be had elsewhere (without the risk factor) and I am not looking for stellar capital returns, this is after all a pension portfolio, I am looking for capital protection. citywire.co.uk/wealth_manager/investment-trusts/best-investment-trusts-by-sector.aspx?CitywireClassID=13&TimePeriod=1Concur with you ref the flat earthers, lets be honest, the great majority of these pensioner types you talk of have nothing to invest, they scrimp by on their pensions, and maybe have a few thousand quid in the post office back home. Like you I have done well out of Thailand, damned well, but that was just being in the right place at the right time 20 years ago when the Tom Yam Gung crisis kicked off, doubt if I will ever repeat that sort of investment return. I havent included my Thai holdings in my portfolio, for the simple reason they are not part of my pension portfolio.
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Post by Fletchsmile on Oct 2, 2017 23:36:14 GMT 7
If I aggregate everything I probably have around 40% to 50% in Emerging Markets. I've around 6% in EM funds + over 31% in Thailand (as an EM) I've also around 12.5% in Asian funds and 17.5% in Global funds. Not sure exactly how much of these would be in EM, but it would take me above 40% total. Without Thailand it would be around 15% ball park. The high weighting in Thailand (mainly equities) is simply with living here, and wanting THB assets. In addition to day to day stuff, to pay school fees over the next decade or so, I want something that will reduce THB currency risk and will outperform inflation. School fees tend to rise around 4% a year so THB cash really doesn't cut it for the most part. Although I do make sure there's enough in cash for the next couple of years school fees - as all equities could be asking for trouble
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chiangmai
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Post by chiangmai on Oct 3, 2017 19:05:31 GMT 7
If I aggregate everything I probably have around 40% to 50% in Emerging Markets. I've around 6% in EM funds + over 31% in Thailand (as an EM) I've also around 12.5% in Asian funds and 17.5% in Global funds. Not sure exactly how much of these would be in EM, but it would take me above 40% total. Without Thailand it would be around 15% ball park. The high weighting in Thailand (mainly equities) is simply with living here, and wanting THB assets. In addition to day to day stuff, to pay school fees over the next decade or so, I want something that will reduce THB currency risk and will outperform inflation. School fees tend to rise around 4% a year so THB cash really doesn't cut it for the most part. Although I do make sure there's enough in cash for the next couple of years school fees - as all equities could be asking for trouble When you write, "global funds", that's just a name like "emerging markets" is just a name, a detailed understanding of the underlying assets and regions is surely the point of the whole exercise? I have four global funds that account for over 40% of my equity assets but each is configured very differently in respect of regions and companies they cover.
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AyG
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Post by AyG on Oct 3, 2017 19:19:24 GMT 7
When you write, "global funds", that's just a name like "emerging markets" is just a name, a detailed understanding of the underlying assets and regions is surely the point of the whole exercise? I have four global funds that account for over 40% of my equity assets but each is configured very differently in respect of regions and companies they cover. Surely the point of such broad sectors as "global markets" and "emerging markets" is that one is putting faith in the fund manager to make appropriate asset allocations. For example, in the case of emerging markets, I have no opinion about which of Brazil, South Africa or Indonesia is going to perform best in the next few years. And more specifically, whether individual companies selected from within these markets will perform best. And to be honest, I really don't know how I'd even reach any such conclusions with any sense of certainty. It's a job best left to the professionals. Just look at past track records and work out who appears to have had the better crystal ball. The same sort of logic applies to the flexible allocation sector. I'd rather someone else make the call on how to allocate between equities, bonds, money market/cash and gold at any given point in the market cycle.
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