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Woodford Equity Income
doug186
Posted: 13 August 2017 14:57:51(UTC)
#41

Joined: 19/12/2011(UTC)
Posts: 2

The current market reminds me of the late 1990s when people were looking for returns of 30 -40% per annum. I was one of them. However I stuck with Woodford then[ Invesc Perp] and I am doing so now. So my answer to the original question is: keep 20% in Woodford funds..
King Lodos
Posted: 13 August 2017 15:12:03(UTC)
#42

Joined: 05/01/2016(UTC)
Posts: 1,519

Thanks: 245 times
Was thanked: 1896 time(s) in 792 post(s)
It's certainly one of those environments in which people have got used to expecting abnormally high returns.

People are buying levered, high conviction funds in sectors that are on very steep valuations, and going 100% equities, because they expect >20% returns to continue.

Long-term, stock market returns are closer to 7%, and even 5% if you go far enough back – and that was under much faster developed world growth .. When markets are becoming exuberant, it can pay to get back to good investment principles like value and asset allocation (which of course will have dragged on returns in recent years)
4 users thanked King Lodos for this post.
Freddy4Skin on 13/08/2017(UTC), Jay Mi on 13/08/2017(UTC), Tim D on 13/08/2017(UTC), Guest on 14/08/2017(UTC)
Freddy4Skin
Posted: 13 August 2017 18:57:37(UTC)
#43

Joined: 22/04/2014(UTC)
Posts: 55

Thanks: 79 times
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King Lodos;49795 wrote:
It's certainly one of those environments in which people have got used to expecting abnormally high returns.

People are buying levered, high conviction funds in sectors that are on very steep valuations, and going 100% equities, because they expect >20% returns to continue.

Long-term, stock market returns are closer to 7%, and even 5% if you go far enough back – and that was under much faster developed world growth .. When markets are becoming exuberant, it can pay to get back to good investment principles like value and asset allocation (which of course will have dragged on returns in recent years)


KL, as ever I read your post with interest. This immediately brought to mind James Anderson being interviewed by his ginger grandson from a couple of weeks ago where approx. 2 mins in he states that he is looking to invest in companies whose stock price will rise 40% annually over the next 5 years.
Youtube Link:
SMT
1 user thanked Freddy4Skin for this post.
King Lodos on 13/08/2017(UTC)
King Lodos
Posted: 13 August 2017 20:40:47(UTC)
#44

Joined: 05/01/2016(UTC)
Posts: 1,519

Thanks: 245 times
Was thanked: 1896 time(s) in 792 post(s)
Freddy4Skin;49797 wrote:
KL, as ever I read your post with interest. This immediately brought to mind James Anderson being interviewed by his ginger grandson from a couple of weeks ago where approx. 2 mins in he states that he is looking to invest in companies whose stock price will rise 40% annually over the next 5 years.
Youtube Link:
SMT


Well it's certainly ambitious .. Ray Dalio seems to think the economy's right in a sweet spot at the moment, so I think if you're an optimist, the real explosive growth could still be yet to come.

But then it's hard not to envisage that being exactly the thinking that led to the Tech Crash
2 users thanked King Lodos for this post.
Freddy4Skin on 13/08/2017(UTC), Tim D on 14/08/2017(UTC)
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