Reply to: Funds

[AtW]

Makes you wonder what the fund managers were doing to lose 15 %.....

If you look carefully at the chart you'll see lots of ups and downs, plenty of opportunity to lose money for a creative fund manager who is trying to be smart.

[BlasterBates]

Yup I invested in this Gold mine in 2008:




Makes you wonder what the fund managers were doing to lose 15 %.....

[Doggy Styles]

I forget where but I remember seeing a report a little while back comparing a range of managed funds to a simple FTSE tracker fund. The tracker outperformed all of the managed funds by a comfortable margin.

Motley Fool:

"Index trackers beat the vast majority of managed funds over the long term.....

WM Company found that 82% of managed funds failed to beat the market over the course of twenty years. While you may think that sounds bad, it's actually even worse, because this figure only includes funds survived for the whole twenty years -- many poorly performing funds are shut down or get merged into other funds"

BTW you can get trackers for most world indexes.

[AtW]

Investing isn't a long only game. You for example recently sold your physical gold. You were expecting to buy back in later cheaper.

And it should be, your example has no economic sense.

There are two (now mostly forgotten) reasons for stock market to exist:
1) establish fairer price of a company
2) raise funds

110% CGT rate on short term (<1 year) capital gains plus compulsory minimum delay between buy and sell of same asset set to something like at least 24 hours would deal with majority of the problems speculators cause on stock markets for everyone but themselves (well, few of them who make money out of it, amateurs get cleaned out).

[AtW]

Ok, will have to agree with you there, it can have all the temptations of betting on horses and all the same chance of success if you don't have discipline BUT:
IF you only use money you won't need for at least 5 years.
AND you drip feed it into low-cost trackers.
OR into the big companies paying divis e.g. VOD, Unilever, Tesco
OR do both and shield it in an ISA/SIPP and can hold your nerve and keep investing, I am sure you will do well enough and much better than sticking it in a bank/mattress.

That's a reasonably sensible strategy that I could agree with.

[ASB]

What's wrong with shorting?

You borrow your mates new Porsche (he paid £100K for it). You sell it for £95K and then buy an identical looking one a month later for £90K and give it back to him.

He's got an identical car and you've got £5K in your pocket. Luverly Jubbly!

In general nothing. Naked shorting is a different beast which I personally am much less comfortable with.

Investing isn't a long only game. You for example recently sold your physical gold. You were expecting to buy back in later cheaper. I assume from this that crystallizing the profit did not lead to a chargeable capital gain.

You could have gone short gold instead (for a net neutral position). You could have done this in a number of ways through a short gold ETF or a simple short spreadbet. It may even be that you could have done it through bullion vault.

All of these are entirely valid strategies. Whether they would prove effective for either your circumstances or what happens remains to be seen.

In a similar position to you I took a largeish short on Uk indexs. Simply because I had a large (at least for me) long position and to actually unwind it would have cost a considerable amount (mainly in taxes - though these will have to be borne sometime). Shorting is a perfectly acceptable hedging strategy.

Short ban does seem to be raising it's head again. http://www.nytimes.com/2011/08/12/bu...ling.html?_r=1

Though to me this doesn't seem to be entirely consistent. Follow it through to it's logical conclusion and this would have to include all spread betting, most derivatives, CFDs, CDSs etc.

[lukemg]

Ok, will have to agree with you there, it can have all the temptations of betting on horses and all the same chance of success if you don't have discipline BUT:
IF you only use money you won't need for at least 5 years.
AND you drip feed it into low-cost trackers.
OR into the big companies paying divis e.g. VOD, Unilever, Tesco
OR do both and shield it in an ISA/SIPP and can hold your nerve and keep investing, I am sure you will do well enough and much better than sticking it in a bank/mattress.

[AtW]

Stick to threads you have some chance of understanding atw, been playing this game for 16 years and my average annual return is >9% across the lot and I've seen plenty of booms and busts during that time.Thing is, when you have a fund that's gone up 300%, a short-term 10% drop doesn't have much impact.

Yes if you are good and spend enough time you can make money out of it.

But if you don't you'll lose money, this applies to majority of people - this ain't pro investor forum where everyone has got time and money to dedicate to such games.

The are gamblers who make a living out of it, majority of people lose however - this is no different to stock market.

[lukemg]

Stick to threads you have some chance of understanding atw, been playing this game for 16 years and my average annual return is >9% across the lot and I've seen plenty of booms and busts during that time.
Thing is, when you have a fund that's gone up 300%, a short-term 10% drop doesn't have much impact.
There's blood on the streets (literally) - I am buying as heavily as I can ! Will let you know in 10 years (not 10 days)if it was the right choice...

[AtW]

- For UK market, consider mopping up dividend paying behemoths from a range of industry sectors which are currently cheap as chips.

[ASB]

To achieve long term capital growth primarily through investment in equities issued by companies around the globe involved in gold mining and in derivatives, the underlying assets of which are equities issued by companies around the globe involved in gold mining. The Fund may also invest, in particular, in companies around the globe that are involved in mining for other precious metals and other minerals and metals.

Exactly, nothing (directly) to do with physical gold. Everything to do with production prospects

If you expect producers, miners, explorers to mirror POG then you are wrong for a whole number of reasons. POG is a factor however in the likely profitability of resource companies.

[DimPrawn]

Probably lost money when shorting the very same gold trying to make money both on ups and downs?

That's the problem with stock "market" - or more like stock casino: way too many people playing it and it turned from fund raising and fair value estimation to "free for all gamble", about time massive taxes are used on short term investments and complete ban on shorting.

What's wrong with shorting?

You borrow your mates new Porsche (he paid £100K for it). You sell it for £95K and then buy an identical looking one a month later for £90K and give it back to him.

He's got an identical car and you've got £5K in your pocket. Luverly Jubbly!

[lukemg]

Brilliant, pick out a couple of examples from thousands to try to prove a point. Turns out you are partially correct.
- Impact of higher charges and inability of almost anyone to consistently predict markets does tend to favour trackers over active managers in mature markets.
- BUT, for exposure to more exotic locations I do favour the best managed funds to provide diversity and local knowledge.
- Consider Investment Trusts as an alternative, they are low-cost, been around for many years, give an element of diversity and management and can provide a regular dividend.
- For UK market, consider mopping up dividend paying behemoths from a range of industry sectors which are currently cheap as chips.
HOLD YOUR NERVE, if you can't, stay out of the market.

[AtW]

To achieve long term capital growth primarily through investment in equities issued by companies around the globe involved in gold mining and in derivatives, the underlying assets of which are equities issued by companies around the globe involved in gold mining. The Fund may also invest, in particular, in companies around the globe that are involved in mining for other precious metals and other minerals and metals.

Probably lost money when shorting the very same gold trying to make money both on ups and downs?

That's the problem with stock "market" - or more like stock casino: way too many people playing it and it turned from fund raising and fair value estimation to "free for all gamble", about time massive taxes are used on short term investments and complete ban on shorting.

[DimPrawn]

Investec Global Gold Fund

To achieve long term capital growth primarily through investment in equities issued by companies around the globe involved in gold mining and in derivatives, the underlying assets of which are equities issued by companies around the globe involved in gold mining. The Fund may also invest, in particular, in companies around the globe that are involved in mining for other precious metals and other minerals and metals.