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I am a bit ignorant on funds?
Frenchman 96
Posted: 05 March 2017 18:24:10(UTC)
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Alan

Am I right in saying the new total annual charge for SMT with BG is .45%

Thanks for info
Alan Selwood
Posted: 05 March 2017 18:26:42(UTC)
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Frenchman 96
Posted: 05 March 2017 18:30:28(UTC)
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King Lodos

I will finish book then check that site you mention,, is there another book you are referring to, or the book I am reading now, suggested by you.

I hear what you say about funds against shares, and you may have noticed by my questions, I am dipping my feet in the water now to learn.

All but one of my shares have had their ex dividend dates, so nothing to lose by cashing in any showing profit.
King Lodos
Posted: 06 March 2017 00:09:28(UTC)
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The books I'd recommend for getting a broad base of knowledge would be:

The Little Book That Beats The Market
The Art of Execution
The Ivy League Portfolio

Just don't treat any of them as instruction manuals .. For that you might want Jack Bogle's Little Book of Common Sense Investing.

And if you want to be active (buy and sell, trade, generate alpha), the must-read is the Market Wizards series.

The Little Book is what I'm referring to with Earnings Yield and Return on Capital .. The Art of Execution with how to buy and sell.

The real point I'd hammer home is that there's no need to trade shares nowadays .. Most stocks in any market will do worse than the market (the index fund) – being able to pick those that do better, THEN buy and sell at the right times, is beyond the capabilities of most professionals .. Human behaviour will lose you money.

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Frenchman 96
Posted: 06 March 2017 09:14:02(UTC)
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King Lodos

You sound like you may be a librarian as well as an investor ((: so I have a lot to read, for now I will concentrate on the following.

finish first book
decide on best spread of funds/trusts, does it matter which, I like simplicity
and best place/platform to buy them
King Lodos
Posted: 06 March 2017 10:05:37(UTC)
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Well if you're deciding on a portfolio, I'd recommend the book Global Asset Allocation, by Meb Faber..

His books are very short, but full of ideas and information .. Most importantly, it demonstrates the value of diversification, and how asset allocation is likely to account for most of your returns.

In fact technically asset allocation accounts for OVER 100% of returns – as market timing and stock picking (on top of fees) is a net negative for most investors.
chubby bunny
Posted: 06 March 2017 11:30:20(UTC)
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King Lodos;44200 wrote:
Well if you're deciding on a portfolio, I'd recommend the book Global Asset Allocation, by Meb Faber..

His books are very short, but full of ideas and information .. Most importantly, it demonstrates the value of diversification, and how asset allocation is likely to account for most of your returns.

In fact technically asset allocation accounts for OVER 100% of returns – as market timing and stock picking (on top of fees) is a net negative for most investors.


Though it's only a couple of quid on Amazon, he also offers that book for free - http://freebook.mebfaber.com/
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S_M
Posted: 06 March 2017 14:01:06(UTC)
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Frenchman 96;44069 wrote:
Hi There

I do self execution with HL and I buy footsie 100 shares only. But since starting a SMALL monthly management plan for my grandson aged 5, I use it to buy Fundsmith Equity, and since I started it 2 years ago, it has done very well.

Because of this, I have added to my 15 shares, a small amount in 3 funds, which are Fundsmith, Lindsell Train Global, and L & G USA Index.

So, my question is, when I read more experienced people than me talking so much about annual fund charges being dear when in the region of .75% to 1.5%, as most of the well known funds average WAY ABOVE the charges above, I feel I am missing something.

What I am trying to say, if for example Fundsmith charges say 1% yearly but produces figures like >>

24% 8% 30% 14% 32% Surely his charges, and others like him are insignificant.

I must stress, I am a novice and am asking the question to learn, as I think I would like to go more into funds for a better spread.


Fund charges are justifiable if they consistently beat the benchmark. It's not hard to find these funds.
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Frenchman 96 on 06/03/2017(UTC)
Frenchman 96
Posted: 07 March 2017 11:02:04(UTC)
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Hi Guys

Firstly, I must say, I am so glad I found this forum, and I very much appreciate all replies and advice.

Secondly, I am possibly more confused than ever, as there is so much information, forums, platforms, tipsters around, it takes some sorting out.

Thirdly, the best thing I have learnt, is to have some funds, that do not carry high charges, and to have a decent spread, I think I will keep some equities, as I am now very used to doing my self execution, and making or losing a few bob whilst doing do.

And last of all, I need some guidance in creating a portfolio of funds, and I would appreciate a step x step guide if it's not too much of a liberty to ask this.

1- I will probably go to Fundsmith direct for a global/usa fund which I think charges £1.08
2- I like Scottish Mortgage Global (Bailie) and charge of .45%
3-L/General UK 100 Index Trust Class C - Acc at .51% inc HL

So, in a perfect world, I want a spread of USA/Europe/UK/ etc, etc, and all with a low cost of .5% and the best div yield poss.

My total portfolio available is £50K and as explained, income is most important as my income is low and fixed at my age of 76.

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Mickey on 07/03/2017(UTC)
Mr Helpful
Posted: 07 March 2017 12:02:25(UTC)
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Frenchman 96;44233 wrote:

I am possibly more confused than ever, as there is so much information, forums, platforms, tipsters around, it takes some sorting out.

last of all, I need some guidance in creating a portfolio of funds, and I would appreciate a step x step guide if it's not too much of a liberty to ask this.

So, in a perfect world, I want a spread of USA/Europe/UK/ etc, etc, and all with a low cost of .5% and the best div yield poss.

My total portfolio available is £50K and as explained, income is most important as my income is low and fixed at my age of 76.



It is difficult to be asked to give advice as should anything go wrong and the investor panic and sell at the wrong time (read low price), then a feeling of guilt will ensue in those giving such advice.

As a fellow retiree will limit info to merely stating some of the more obvious Investment Trust holdings in our own portfolio, which is biased towards income.
UK : CTY
Global : MYI
US : NAIT
Asia/Pacific : HFEL
Europe : JETI
Emerging Markets : JEMI
We also hold substantial cash ond other income producing assets to balance the Stock holdings.

Our aim is to hold between 25% and 50% in Stocks at all times.
The precise target hingeing on Stock Valuations.
Our Stock target today is 32%.

Re books : Unfortunately the best investment books are of US origin, but if pushed to short-list just two, might suggest :-
'The Informed Investor' by Frank Armstrong (see Chapter 18 for retirees)
'A Wealth of Common Sense' by Ben Carlson.
Others may disagree with this choice as they lean heavily towards so-called passive investing. But used copies of both can be found most times relatively cheaply on Amazon and will certainly round out an investor's perspective.
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Frenchman 96
Posted: 07 March 2017 12:27:54(UTC)
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Mr Helpful

Again, a sensible reply like all to date, I don't exactly want/need tips, just direction so I can make up my own mind.

I do not know the abbreviations you used, can you clarify please
dyfed
Posted: 07 March 2017 12:55:25(UTC)
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Frenchman 96;44237 wrote:




I do not know the abbreviations you used, can you clarify please


Look them up on any stocks and shares website e.g. HL, morningstar - much quicker than typing the whole title in!
Richard Lambert
Posted: 07 March 2017 14:26:10(UTC)
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Just google the abbreviation and they come up in the results. E.g CTY share price or CTY investment trust.
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Frenchman 96 on 07/03/2017(UTC)
Frenchman 96
Posted: 07 March 2017 15:58:30(UTC)
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Hi Guys

Did as you say, and know who they are, I am familiar with the Footsie100 abbreviations, I was a bit thrown, thanks again, more to think about.
I AM EMF
Posted: 13 March 2017 11:27:35(UTC)
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UK : CTY - City of London Investment Trust
Global : MYI - Murray International Trust
US : NAIT - National American Income Trust
Asia/Pacific : HFEL - Henderson Far East Income Ltd
Europe : JETI - JP Morgan Investment Trust
Emerging Markets : JEMI - JP Morgan Global Emerging Markets Income Trust PLC
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Frenchman 96 on 14/03/2017(UTC)
I AM EMF
Posted: 14 March 2017 09:10:35(UTC)
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I had a question related to what you are all discussing.

I currently have an ISA where I have invested around 85% in to Fundsmith and 15% in to CF Woodford.

I understand this is risky but since my investment in May last year, I am up approx 25% overall(a large proportion of that is down to the fall in value of the pound).

When looking at Fundsmiths previous returns, it was a no brainer to invest a larger proportion of my money in to Fundsmith. I understand the S&P has rose similarly over this time but it has paid off for now.

With my next investment(when the new ISA allowance comes in) I was looking at UBS S&P 500 tracker as it has cheap management costs and is very close to tracking Fundsmith. I was also looking at Lindsell Global Train. The only concern with this is that it is not diversifying and very similar to what I currently hold. The issue I have with diversifying is that my returns will fall considerably.

I was also looking at a few other funds, namely Old Mutual UK Mid Cap, AXA Framlington Biotech.

When I was at university, I remember looking at the S&P 500 graph and thinking this is the perfect investment long term. Its just having the guts to hold out and even invest further when the markets fall (like 2007/2008)....easier said than done.

Any thoughts?
Frenchman 96
Posted: 14 March 2017 09:31:46(UTC)
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I AM EMF

Thanks for translation, I had worked it out myself, but thanks anyway.

To All

I have now started to go ahead with funds/trusts, and my first two are

Vanguard FTSE Developed World ex-UK Equity Index
Scottish Mortgage Trust

Although my aim is always income from my equity portfolio, does it matter if I go for income or accumulation in funds, for if accumulation is better, I can cash some profits if any, to act as income?
King Lodos
Posted: 14 March 2017 14:06:14(UTC)
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I AM EMF;44601 wrote:
I had a question related to what you are all discussing.

I currently have an ISA where I have invested around 85% in to Fundsmith and 15% in to CF Woodford.

I understand this is risky but since my investment in May last year, I am up approx 25% overall(a large proportion of that is down to the fall in value of the pound).

When looking at Fundsmiths previous returns, it was a no brainer to invest a larger proportion of my money in to Fundsmith. I understand the S&P has rose similarly over this time but it has paid off for now.

With my next investment(when the new ISA allowance comes in) I was looking at UBS S&P 500 tracker as it has cheap management costs and is very close to tracking Fundsmith. I was also looking at Lindsell Global Train. The only concern with this is that it is not diversifying and very similar to what I currently hold. The issue I have with diversifying is that my returns will fall considerably.

I was also looking at a few other funds, namely Old Mutual UK Mid Cap, AXA Framlington Biotech.

When I was at university, I remember looking at the S&P 500 graph and thinking this is the perfect investment long term. Its just having the guts to hold out and even invest further when the markets fall (like 2007/2008)....easier said than done.

Any thoughts?


Long-term (30+ years), I think you're much safer in Quality companies (like Fundsmith) or quality markets (like the S&P500) than anywhere else.

Medium-term (10-15 years) they're both expensive (the S&P500 is at about the 3rd highest valuations it's ever reached .. and Fundsmith is even more expensive), and high valuations are the best predictor we've got of poor medium-term returns.

If you want a good passive investment, go with something like a FTSE World (so at least you're not just betting on the US) or Vanguard LifeStrategy .. The advantage is that they'll adapt to what markets do, even if they are a bit expensive now .. If you want good returns over 10-15 years, you need to consider diversifying by asset class more, and/or investing in cheaper markets and sectors, rather than the ones that have done best so far this century.
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I AM EMF on 14/03/2017(UTC)
Frenchman 96
Posted: 15 March 2017 10:00:39(UTC)
#43

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Hi Guys

I have now decided that Vanguard FTSE Developed World ex UK Equity Index is a good way to start investing in funds, discovered by me from this forum.

Can anyone conform, that the fee of 0.15 charged by Van is great, but to deal with them direct, the minimum investment is £100k.

This is out of my league, so I assume I need to find the cheapest platform and add the 0.15 to the platform charge, am I correct.
Alan Selwood
Posted: 15 March 2017 14:20:13(UTC)
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When the minimum investment is £100,000 or similar, it is usually for direct investment by an institution, rather than for small amounts by a retail investor.

Most platforms have access to the Institutional (I) class of units in various funds for their clients, so for example the Fundsmith I Class is available through A J Bell even when investing (say) £10,000 the I class will get lots of investment via each platform, and overall they will probably way exceed the £100,000 between all the investors. So they don't mind!

If you go to Fundsmith directly, you can get the T class units as a smaller retail investor, but I suspect that the I class units will not be offered to you unless you try to invest £100,000 +.
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