chiangmai
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Post by chiangmai on Aug 8, 2017 17:13:25 GMT 7
Perhaps I wasn't sufficiently clear or you didn't fully understand what I wrote.
Every indices has a volatility factor which changes based on duration and over the period of measurement, a six month volatility rating will be different from a 3 or 5 years volatility rating. I said earlier that the FTSE250 is rated by V-lab earlier at 10.8 CURRENTLY but is forecast to increase to 14 NEXT YEAR. Every fund is baselined at any point in time against an indices and a volatility factor derived from that comparison. Investors therefore need to review the volatility rating at the outset and ALSO periodically as they go forward because both the volatility rating of the fund AND of the indices will change. When you go to review the volatility of a fund that you hold, there's no point in looking at the five year figure because that wont show current or recent trend, to review those changes you need to look at a smaller sampling, a sample of at least 60 days. The FT at least recalculates volatility for each fund on a rolling basis so looking at the changes in the one year figure will show direction at least - there's nothing misguided about any of that.
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Post by Deleted on Aug 8, 2017 18:53:16 GMT 7
Buy gold.
Fail that , invest heavily in yellow cake.
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Post by rgs2001uk on Aug 8, 2017 20:31:20 GMT 7
I don't know if it's fake or not but if you read the article the logic stacks up- Sterling falls so that magnifies the value of foreign earnings, UK funds see outflows but fund prices hold up on the back of increased value of foreign currency content. So most funds are "steaming ahead", just that some are doing so more slowly than others, the question to consider is, what happens if the currency scenario reverses. Separately, I was trying to think if there's some way to measure the impact of Brexit on the FTSE and I don't think there is except at the macro level. I thought perhaps volumes would tell a story but they don't since investors simply switch out of high risk stock into lower risk ones. Whatever, all of this simply reinforces to me the need for increased geographic spread and asset balance, there' certainly nothing to loose from that and potentially much to gain. Lastly, I came across a brokers proposal for an investment portfolio for me dated three years ago, here's what he proposed: I's a low risk balanced portfolio which with hindsight, wasn't that stellar. If I understood the link provided it seem to refer to Tracker Funds, why anyone would invest in them is beyond me. Here are 3 ITs I hold, I consider them low risk, AyG will be along to chastise me, copy of Beano stuffed down the back of my pants, . 1. www.hl.co.uk/shares/shares-search-results/b/bankers-investment-trust-ord-25p-shareNice 2% divi and growth of 96% over 5 years. 2. www.hl.co.uk/shares/shares-search-results/b/brunner-investment-trust-ord-25p-shareAgain 2% divi and 85% growth over 5 years. 3. www.hl.co.uk/shares/shares-search-results/c/caledonia-investments-plc-ordinary-5pAgain 2% divi and growth of 100% over 5 years. These funds account for about 3% of my overall portfolio and I consider then to be nothing more than money in the bank, an emergency fund that can be sold tomorrow. I view investing as nothing more than gambling, its not for widows and orphans. Just like backing the horses, do you follow the horse, the trainer or the jockey? Investing in ITs, do you follow the sector, the fund or the fund manager? Not yet mentioned in this thread, at what point/age do you start running down your portfolio/fund and start to eat into your capital?
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Post by rgs2001uk on Aug 8, 2017 20:34:04 GMT 7
Buy gold. Fail that , invest heavily in yellow cake. Gold, . Invest in worthless rice paddy fields, rubber trees, internet cafes, coffee shops, cray fish farms or sugar cane farms.
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chiangmai
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Post by chiangmai on Aug 8, 2017 20:57:30 GMT 7
Don't diss the Beano, I wont have it.
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Post by Fletchsmile on Aug 8, 2017 23:21:36 GMT 7
For investment trusts, below are the main ones I hold. The intention was to build an extra portfolio of ITs to hold long term outside the UK (via Singapore) that yielded 3% - 4% and just take the natural income yield, without worrying too much about discounts/premiums, plus provide some capital growth. It currently yields around 3% and is mainly equity focused, so somewhat aggressive to an extent. There's a reasonable geographical spread, although a notable absence of Asian Equities and Thai equities which are held elsewhere, and frontier markets is higher than I would if stand alone. I haven't bothered rebalancing it to date, as I tend to rebalance at all/total portfolio level using other portfolios IT/ Geography/ Type/ % Portfolio/ %Yield BRFI-Blackrock Frontier Investment Trust/ Frontier Equity 11.5% /3.4% BRWM-World Mining Investment Trust/ Mining Equity 4.1% /3.6% EDIN-Edinburgh Investment Trust/ UK Equity 12.0% /3.3% FGT-Finsbury Growth&Income Trust/ UK Equity 14.0% /1.9% HDIV-Henderson Diversified Income Trust/ UK Fixed Income 7.6% /5.5% HEFT-Henderson European Focus/ Europe Equity 4.9% /1.9% HINT-Henderson International Income Trust/ Global Equity 4.2% /3.1% JAM-JP Morgan American Investment Trust/ US Equity 4.1% /1.3% JETI-JP Morgan European Income Trust/ Europe Equity 4.6% /3.0% JEMI-JP Morgan Global Emerging Markets Income Trust/ Emerging Markets Equity 4.2% /3.9% LWDB-Law Debenture Corp PLC Fund/ UK Equity 4.3% /2.8% LWI-Lowland Investment Trust/ UK Equity 8.1% /3.0% NAIT-North American Income Trust/ American Equity 3.7% /3.0% UEM-Utilico Emerging Markets/ Emerging Markets Equity 8.2% /3.0% WTAN-Witan Investment Trust/ Global Equity 4.5% /1.9% NAIT has been disappointing recently, but the others I'm comfortable with and have met objectives I also hold a couple of others like JRS - JPM Russia but these are just particular views at the time and not necessarily relevant here
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chiangmai
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Post by chiangmai on Aug 9, 2017 1:32:10 GMT 7
I don't know if it's fake or not but if you read the article the logic stacks up- Sterling falls so that magnifies the value of foreign earnings, UK funds see outflows but fund prices hold up on the back of increased value of foreign currency content. So most funds are "steaming ahead", just that some are doing so more slowly than others, the question to consider is, what happens if the currency scenario reverses. Separately, I was trying to think if there's some way to measure the impact of Brexit on the FTSE and I don't think there is except at the macro level. I thought perhaps volumes would tell a story but they don't since investors simply switch out of high risk stock into lower risk ones. Whatever, all of this simply reinforces to me the need for increased geographic spread and asset balance, there' certainly nothing to loose from that and potentially much to gain. Lastly, I came across a brokers proposal for an investment portfolio for me dated three years ago, here's what he proposed: I's a low risk balanced portfolio which with hindsight, wasn't that stellar. If I understood the link provided it seem to refer to Tracker Funds, why anyone would invest in them is beyond me. Here are 3 ITs I hold, I consider them low risk, AyG will be along to chastise me, copy of Beano stuffed down the back of my pants, . 1. www.hl.co.uk/shares/shares-search-results/b/bankers-investment-trust-ord-25p-shareNice 2% divi and growth of 96% over 5 years. 2. www.hl.co.uk/shares/shares-search-results/b/brunner-investment-trust-ord-25p-shareAgain 2% divi and 85% growth over 5 years. 3. www.hl.co.uk/shares/shares-search-results/c/caledonia-investments-plc-ordinary-5pAgain 2% divi and growth of 100% over 5 years. These funds account for about 3% of my overall portfolio and I consider then to be nothing more than money in the bank, an emergency fund that can be sold tomorrow. I view investing as nothing more than gambling, its not for widows and orphans. Just like backing the horses, do you follow the horse, the trainer or the jockey? Investing in ITs, do you follow the sector, the fund or the fund manager? Not yet mentioned in this thread, at what point/age do you start running down your portfolio/fund and start to eat into your capital? Re. Trackers and portfolio: Only some of them were trackers, not all. "A key argument in favour of trackers is that the vast majority of 'active' managers end up underperforming their chosen index. In some cases this is because they are tempted to improve their chances of success by taking bold sector or company positions when compared with the index". I personally don't have an axe to grind with them, for or against". Re. Running Down Portfolio: If my experience is anything to go by you're thoughts on when and if to do this will change over time, based on circumstances that you can only guess at currently. You start off building a pension fund because you know it's the smart thing to do and eventually it begins to pay out. But you'll never really know until reach that point how well that fund has really done and how long a fund will last, ditto the funds performance during retirement along with the rest of your financial picture will remain an unknown until you get there. I started my retirement funds almost by accident, I just happened to be in the UK fifteen years ago and met with an IFA one afternoon to get a financial health check because I was bored with my client at work! Eventually a fund was set up (one of several I would later have) and I let it run and do it's own thing under the IFA's stewardship. The fund did well and years later I decided I really ought to start taking money from it, after all, why not, even though I didn't really need it. As my retirement progressed several things happened, the economic climate tightened, noticeably so, plus I became more aware of my pensions and started watching them more closely. Today I've decided not to take any more funds from my onshore pension but instead to let it grow free of tax so that a healthy sum can be passed on to my wife - conceivably my strategy for that pension may well change again in my lifetime. The only advice I can offer on your question is to say it's far better to have too much than to run out early so whatever you do, err on the side of caution because whilst there are no prizes for dieing rich, there are penalties for dieing poor.
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Post by Deleted on Aug 9, 2017 2:24:29 GMT 7
Buy gold. Fail that , invest heavily in yellow cake. Gold, . Invest in worthless rice paddy fields, rubber trees, internet cafes, coffee shops, cray fish farms or sugar cane farms. When was the last time someone robbed the stockmarket?
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chiangmai
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Post by chiangmai on Aug 9, 2017 8:12:37 GMT 7
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chiangmai
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Post by chiangmai on Aug 16, 2017 6:29:42 GMT 7
Interesting to watch the performance of funds I'd selected (and inherited) during the Trump/NK spat, Asian indices fell more than most and as a result, Asian funds took a maximum 2% hit - Witan nearly -2%, Stewart A/P Leaders -1.5%, Schroder Small Caps -1%, most recovering nicely and quite quickly. But my bond holdings did well and counterbalanced nicely which is just as well because that's what they're designed to do, even staid old iShares Gilts (up 3%) and my Fidelity funds were up 2% and 5% respectively. In fact, overall my total holdings never once spiked downwards during the week and values continued to increase daily.
Of course, you're saying that's what's supposed to happen when you have a balanced portfolio but this novice has only now witnessed it for the first time at the micro level. It seems to me that whilst there is a strong argument for geographic diversity there is an even stronger argument for the bond/equities balance and that includes gilts, 50/50 makes for a nice smooth ride during troubled times.
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AyG
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Post by AyG on Aug 16, 2017 13:17:40 GMT 7
Interesting to watch the performance of funds I'd selected (and inherited) during the Trump/NK spat, Asian indices fell more than most and as a result, Asian funds took a maximum 2% hit - Witan nearly -2%, Stewart A/P Leaders -1.5%, Schroder Small Caps -1%, most recovering nicely and quite quickly. But my bond holdings did well and counterbalanced nicely which is just as well because that's what they're designed to do, even staid old iShares Gilts (up 3%) and my Fidelity funds were up 2% and 5% respectively. In fact, overall my total holdings never once spiked downwards during the week and values continued to increase daily. Of course, you're saying that's what's supposed to happen when you have a balanced portfolio but this novice has only now witnessed it for the first time at the micro level. It seems to me that whilst there is a strong argument for geographic diversity there is an even stronger argument for the bond/equities balance and that includes gilts, 50/50 makes for a nice smooth ride during troubled times. What you write would only hold true if equities and bonds were negatively correlated. They are not. They are positively correlated and, on average, move in the same direction. They are also much more strongly correlated now than they were, say 10 years ago. The diversification benefits of bonds have largely gone, though many commentators and financial advisers appear not to have noticed. What bonds do is act as a drag on portfolio performance. It's rather like holding a lot of cash. Suppose you have a portfolio of 50% cash and 50% equities. If equities went up 10%, your portfolio would only go up 5%. Conversely, if the portfolio went down 10%, you'd only be down 5%. However, markets go up more than they go down, so a substantial allocation to cash or to bonds is reducing your potential total return.
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chiangmai
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Post by chiangmai on Aug 16, 2017 13:52:28 GMT 7
"What bonds do is act as a drag on portfolio performance" - there must be much more to the picture than just that negative aspect else why would every IFA and every self teach course in investments advise to hold a balanced portfolio of bonds and equities. Read more: bigmango.boards.net/thread/10888/pension-portfolios?page=9#ixzz4ptkFaFi9All I know is what I see and that is that whilst four of my predominantly Asian equity funds fell for two days, four of my bond/Gilts holdings rose by a greater amount and cash tends not to do the latter! Check out the numbers for yourself, the funds are named above. if you like I can post the ISIN's.
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chiangmai
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Post by chiangmai on Aug 16, 2017 17:49:27 GMT 7
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AyG
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Post by AyG on Aug 16, 2017 19:41:47 GMT 7
why would every IFA and every self teach course in investments advise to hold a balanced portfolio of bonds and equities. For the very simple reason they don't keep up with modern research. In particular, IFAs stick with very traditional, inefficient, model portfolios because it's "safe" (for them - they're not the ones suffering poor performance.) If they suggested something different which then under performed for a year or two, they'd lose clients because clients typically have very short time horizons when performance is poor. If the IFA simply does what his/her peer group is doing, then the client will be satisfied. If you look at what more sophisticated managers are doing: - The Yale Endowment has less than 5% in bonds static1.squarespace.com/static/55db7b87e4b0dca22fba2438/t/58ece6bd579fb356c857e2a4/1491920595529/Yale_Endowment_16.pdf- Ruffer Investment Trust has 0% in conventional bonds ruffer.co.uk/cmsfiles/reports/RIC_Monthly_report.pdf- Personal Assets Investment Trust also has 0% in conventional bonds www.patplc.co.uk/portfolioThe last two are notable for being run particularly cautiously. Traditional thinking equates being cautious with holding lots of bonds. Some now know better.
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chiangmai
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Post by chiangmai on Aug 16, 2017 20:35:03 GMT 7
why would every IFA and every self teach course in investments advise to hold a balanced portfolio of bonds and equities. For the very simple reason they don't keep up with modern research. In particular, IFAs stick with very traditional, inefficient, model portfolios because it's "safe" (for them - they're not the ones suffering poor performance.) If they suggested something different which then under performed for a year or two, they'd lose clients because clients typically have very short time horizons when performance is poor. If the IFA simply does what his/her peer group is doing, then the client will be satisfied. If you look at what more sophisticated managers are doing: - The Yale Endowment has less than 5% in bonds static1.squarespace.com/static/55db7b87e4b0dca22fba2438/t/58ece6bd579fb356c857e2a4/1491920595529/Yale_Endowment_16.pdf- Ruffer Investment Trust has 0% in conventional bonds ruffer.co.uk/cmsfiles/reports/RIC_Monthly_report.pdf- Personal Assets Investment Trust also has 0% in conventional bonds www.patplc.co.uk/portfolioThe last two are notable for being run particularly cautiously. Traditional thinking equates being cautious with holding lots of bonds. Some now know better. I never liked the bleading edge in anything, a few steps behind it suits me very well. Being a retiree I like traditional, plus I like caution and I like risk aversion and mitigation big time. I'll leave the new sophisticated investment thinking to those who can still go out and earn and recover from a crash or failure.
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