Sell Tesla?

ToneControl

RandallFlagg said:

ToneControl said:

An interesting narrative here:

The view in late 2020:
https://www.fool.com/investing/2020/12/30/move-over-warren-buffett-theres-a-new-must-follow/

whereas all the news now says the tables are turned:



https://www.thestreet.com/memestocks/reddit-trends/cathie-wood-vs-warren-buffett-who-will-win-in-2022

So the benefit with value investing is that you have a logical reason to expect your investments to weather economic storms, whereas when pursuing growth stocks, your life savings are exposed to much more short to medium term risk. If retirement is 25 years away, this is less important.

Reversion to the mean. Is this not a reinforcement for holding a blended index fund? A mix of growth and value, best of both worlds?

indirectly, yes, but Hathaway is not an index fund

For Buffet , it's all about value investing, so when this less-risky approach brings the same returns as long-term investment in a growth fund, it's worth doing some analysis

ArchtopDave

This Berkshire Hathaway/ARK graph shows relatively short term performance for how I look at investing. I'm not saying it's of no value, but, in general I'm more interested assessing funds with 5 to 10 year performance graphs and figures. Graphs, like this one, I'd more use to assess timing of buying or selling.

RandallFlagg

ToneControl said:

RandallFlagg said:

indirectly, yes, but Hathaway is not an index fund

For Buffet , it's all about value investing, so when this less-risky approach brings the same returns as long-term investment in a growth fund, it's worth doing some analysis

I'm well aware of that and Warren Buffet's approach to investing. Investing in well established businesses that have no plans to grow could carry as much risk as investing in a well funded high tech startup.

Buffet's contempt for the pigeon holing of companies into terms such as “value” or “growth” is well known. My point is that the graph suggests a fund that contained stocks of both new technology innovation and more established mainstream companies would capture the best of both worlds as a long term investor. But terms “growth” and “value” are interchangeable depending on what a companies age, ambitions and strategy is for use of the future cash it generates and any borrowings. 

Warren Buffet:

“Common yardsticks such as dividend yield, the ratio of price to earnings or to book value, and even growth rates have nothing to do with valuation, except to the extent they provide clues to the amount and timing of cash flows into and from the business. Indeed, growth can destroy value if it requires cash inputs in the early years of a project or enterprise that exceed the discounted value of the cash that those assets will generate in later years. Market commentators and investment managers who glibly refer to "growth" and "value" styles as contrasting approaches to investment are displaying their ignorance, not their sophistication. Growth is simply a component - usually a plus, sometimes a minus - in the value equation.”

ToneControl

RandallFlagg said:

ToneControl said:

RandallFlagg said:

indirectly, yes, but Hathaway is not an index fund

For Buffet , it's all about value investing, so when this less-risky approach brings the same returns as long-term investment in a growth fund, it's worth doing some analysis

I'm well aware of that and Warren Buffet's approach to investing. Investing in well established businesses that have no plans to grow could carry as much risk as investing in a well funded high tech startup.

Buffet's contempt for the pigeon holing of companies into terms such as “value” or “growth” is well known. My point is that the graph suggests a fund that contained stocks of both new technology innovation and more established mainstream companies would capture the best of both worlds as a long term investor. But terms “growth” and “value” are interchangeable depending on what a companies age, ambitions and strategy is for use of the future cash it generates and any borrowings. 

Warren Buffet:

“Common yardsticks such as dividend yield, the ratio of price to earnings or to book value, and even growth rates have nothing to do with valuation, except to the extent they provide clues to the amount and timing of cash flows into and from the business. Indeed, growth can destroy value if it requires cash inputs in the early years of a project or enterprise that exceed the discounted value of the cash that those assets will generate in later years. Market commentators and investment managers who glibly refer to "growth" and "value" styles as contrasting approaches to investment are displaying their ignorance, not their sophistication. Growth is simply a component - usually a plus, sometimes a minus - in the value equation.”

I'm not sure that's an accurate description of Buffett's methodology
https://www.investopedia.com/articles/01/071801.asp#:~:text=He looks at each company,extremely capable of generating earnings.

Describing specific shares as value or growth is simplistic

But that's not what I'm talking about, I'm talking about doing the value investment research - looking for undervalued companies and then waiting for earnings and a likely share price improvement. 

This is a good quote:

Buffett, however, isn't concerned with the supply and demand intricacies of the stock market. In fact, he's not really concerned with the activities of the stock market at all. This is the implication in his famous paraphrase of a Benjamin Graham quote: "In the short run, the market is a voting machine but in the long run it is a weighing machine."

RandallFlagg

It's all academic to me as I don't look to invest in individual companies, to confidently place a large sum of my money in a single company I would want to meet the management team in person once a year. Satisfying yourself that the company is a worthy investment on day one needs to be a decision under annual review.

I have no time or inclination for that level of professional investing so index funds it is for me and I'll happily take average market returns accordingly.

ToneControl

ToneControl said:

RandallFlagg said:

ToneControl said:

Not sure why people think that short-term investments are such a bad idea
with day trading, you can keep your money in zero risk cash, and only invest when something is clearly underpriced

like my mate did yesterday, bought 5000 POLY shares at 550p
sold today for 800p

that's £12.5k profit, in one day

It's always “my mate” that made the money isn't it? And we never hear about the trades that didn't work out or what trades you did 

Day trading is a bad idea for the majority of people because statistically, more people lose money than make money day trading, trying to time the market. We always hear about the teenager who made a million in 6 months trading crypto but we don't hear about the people who slowly lose money over a few years through fees and bad trades.

Many millions of people, who have a career, profession or full time job and family that they want to focus on, have no interest in becoming a Wall Street wannabe. They want to take their earnings and invest in a simple way to build up a sum of money they can use in retirement while they get on with their lives.

Buying and holding a low cost index fund or funds, invested in a selection of assets that match your risk appetite and regions that interest you, for the long term, through the ups and downs of the stock market, is a perfectly sensible and proven solution that requires little more than rudimentary knowledge and no effort whatsoever once set up. My investments increased 27.7% (£67K investment growth net of additional contributions) last year by simply doing just that. No trading, no transactions, nothing.

What will the returns be this year? I have no idea, but I do know that over the next 20 years I will do OK. Trying to time the market is incredibly difficult.

On Feb 24 you posted: “I hope you guys are all watching your investments today, time to pay attention” as the Russian invasion of Ukraine commenced and a wave of fear and shock swept around the world.

The S&P500 increased by 1.5% on 24th and 2.24% on 25th. So what exactly was I supposed to be watching and paying attention to?

my mate shut down his other businesses about 15 years ago, and just does trading now
he runs on the basis that 2 successful trades to one unsuccessful is an acceptable ratio
I think he makes over £100k a year typically, last year was more like £300k-£400k
I made a lot last year too, I've not been trading much this year, too busy with work
My mate's predictions are more frequently correct, on Thursday morning he said 
S+P will "bounce into 4350 area on friday"
He thinks it will drop to 3660 in April or May, we'll see if he's right

Why did I post?
Even relatively passive investors should be aware of how world events affect their life savings

S+P down to 3656 today, looks like my mate was correct, the dip being just 2-3 weeks later than expected
He's been very busy shorting the S+P, so will have made lots of cash 

Lebarque

ToneControl said:

ToneControl said:

RandallFlagg said:

ToneControl said:

Not sure why people think that short-term investments are such a bad idea
with day trading, you can keep your money in zero risk cash, and only invest when something is clearly underpriced

like my mate did yesterday, bought 5000 POLY shares at 550p
sold today for 800p

that's £12.5k profit, in one day

It's always “my mate” that made the money isn't it? And we never hear about the trades that didn't work out or what trades you did 

Day trading is a bad idea for the majority of people because statistically, more people lose money than make money day trading, trying to time the market. We always hear about the teenager who made a million in 6 months trading crypto but we don't hear about the people who slowly lose money over a few years through fees and bad trades.

Many millions of people, who have a career, profession or full time job and family that they want to focus on, have no interest in becoming a Wall Street wannabe. They want to take their earnings and invest in a simple way to build up a sum of money they can use in retirement while they get on with their lives.

Buying and holding a low cost index fund or funds, invested in a selection of assets that match your risk appetite and regions that interest you, for the long term, through the ups and downs of the stock market, is a perfectly sensible and proven solution that requires little more than rudimentary knowledge and no effort whatsoever once set up. My investments increased 27.7% (£67K investment growth net of additional contributions) last year by simply doing just that. No trading, no transactions, nothing.

What will the returns be this year? I have no idea, but I do know that over the next 20 years I will do OK. Trying to time the market is incredibly difficult.

On Feb 24 you posted: “I hope you guys are all watching your investments today, time to pay attention” as the Russian invasion of Ukraine commenced and a wave of fear and shock swept around the world.

The S&P500 increased by 1.5% on 24th and 2.24% on 25th. So what exactly was I supposed to be watching and paying attention to?

my mate shut down his other businesses about 15 years ago, and just does trading now
he runs on the basis that 2 successful trades to one unsuccessful is an acceptable ratio
I think he makes over £100k a year typically, last year was more like £300k-£400k
I made a lot last year too, I've not been trading much this year, too busy with work
My mate's predictions are more frequently correct, on Thursday morning he said 
S+P will "bounce into 4350 area on friday"
He thinks it will drop to 3660 in April or May, we'll see if he's right

Why did I post?
Even relatively passive investors should be aware of how world events affect their life savings

S+P down to 3656 today, looks like my mate was correct, the dip being just 2-3 weeks later than expected
He's been very busy shorting the S+P, so will have made lots of cash 

Is your mate Mystic Meg?

ToneControl

Lebarque said:

ToneControl said:

ToneControl said:

RandallFlagg said:

ToneControl said:

Not sure why people think that short-term investments are such a bad idea
with day trading, you can keep your money in zero risk cash, and only invest when something is clearly underpriced

like my mate did yesterday, bought 5000 POLY shares at 550p
sold today for 800p

that's £12.5k profit, in one day

It's always “my mate” that made the money isn't it? And we never hear about the trades that didn't work out or what trades you did 

Day trading is a bad idea for the majority of people because statistically, more people lose money than make money day trading, trying to time the market. We always hear about the teenager who made a million in 6 months trading crypto but we don't hear about the people who slowly lose money over a few years through fees and bad trades.

Many millions of people, who have a career, profession or full time job and family that they want to focus on, have no interest in becoming a Wall Street wannabe. They want to take their earnings and invest in a simple way to build up a sum of money they can use in retirement while they get on with their lives.

Buying and holding a low cost index fund or funds, invested in a selection of assets that match your risk appetite and regions that interest you, for the long term, through the ups and downs of the stock market, is a perfectly sensible and proven solution that requires little more than rudimentary knowledge and no effort whatsoever once set up. My investments increased 27.7% (£67K investment growth net of additional contributions) last year by simply doing just that. No trading, no transactions, nothing.

What will the returns be this year? I have no idea, but I do know that over the next 20 years I will do OK. Trying to time the market is incredibly difficult.

On Feb 24 you posted: “I hope you guys are all watching your investments today, time to pay attention” as the Russian invasion of Ukraine commenced and a wave of fear and shock swept around the world.

The S&P500 increased by 1.5% on 24th and 2.24% on 25th. So what exactly was I supposed to be watching and paying attention to?

my mate shut down his other businesses about 15 years ago, and just does trading now
he runs on the basis that 2 successful trades to one unsuccessful is an acceptable ratio
I think he makes over £100k a year typically, last year was more like £300k-£400k
I made a lot last year too, I've not been trading much this year, too busy with work
My mate's predictions are more frequently correct, on Thursday morning he said 
S+P will "bounce into 4350 area on friday"
He thinks it will drop to 3660 in April or May, we'll see if he's right

Why did I post?
Even relatively passive investors should be aware of how world events affect their life savings

S+P down to 3656 today, looks like my mate was correct, the dip being just 2-3 weeks later than expected
He's been very busy shorting the S+P, so will have made lots of cash 

Is your mate Mystic Meg?

nah, but he's made a living for 20 years by trading (well into 6 figures a year), and finds the S&P the easiest to predict, and the least noisy, most of the time he makes his cash betting that the S+P will lose value, he is very good at it

I got interested in 2020, and in April 2020 he predicted the October 2020 falls. It's a strange blend of looking at patterns on charts, and an understanding of the group think psychology of the markets

as well as the way companies work, balance sheets, annual reports, bonds, lending, etc

RandallFlagg

ToneControl said:

Lebarque said:

ToneControl said:

ToneControl said:

RandallFlagg said:

ToneControl said:

Not sure why people think that short-term investments are such a bad idea
with day trading, you can keep your money in zero risk cash, and only invest when something is clearly underpriced

like my mate did yesterday, bought 5000 POLY shares at 550p
sold today for 800p

that's £12.5k profit, in one day

It's always “my mate” that made the money isn't it? And we never hear about the trades that didn't work out or what trades you did 

Day trading is a bad idea for the majority of people because statistically, more people lose money than make money day trading, trying to time the market. We always hear about the teenager who made a million in 6 months trading crypto but we don't hear about the people who slowly lose money over a few years through fees and bad trades.

Many millions of people, who have a career, profession or full time job and family that they want to focus on, have no interest in becoming a Wall Street wannabe. They want to take their earnings and invest in a simple way to build up a sum of money they can use in retirement while they get on with their lives.

Buying and holding a low cost index fund or funds, invested in a selection of assets that match your risk appetite and regions that interest you, for the long term, through the ups and downs of the stock market, is a perfectly sensible and proven solution that requires little more than rudimentary knowledge and no effort whatsoever once set up. My investments increased 27.7% (£67K investment growth net of additional contributions) last year by simply doing just that. No trading, no transactions, nothing.

What will the returns be this year? I have no idea, but I do know that over the next 20 years I will do OK. Trying to time the market is incredibly difficult.

On Feb 24 you posted: “I hope you guys are all watching your investments today, time to pay attention” as the Russian invasion of Ukraine commenced and a wave of fear and shock swept around the world.

The S&P500 increased by 1.5% on 24th and 2.24% on 25th. So what exactly was I supposed to be watching and paying attention to?

my mate shut down his other businesses about 15 years ago, and just does trading now
he runs on the basis that 2 successful trades to one unsuccessful is an acceptable ratio
I think he makes over £100k a year typically, last year was more like £300k-£400k
I made a lot last year too, I've not been trading much this year, too busy with work
My mate's predictions are more frequently correct, on Thursday morning he said 
S+P will "bounce into 4350 area on friday"
He thinks it will drop to 3660 in April or May, we'll see if he's right

Why did I post?
Even relatively passive investors should be aware of how world events affect their life savings

S+P down to 3656 today, looks like my mate was correct, the dip being just 2-3 weeks later than expected
He's been very busy shorting the S+P, so will have made lots of cash 

Is your mate Mystic Meg?

nah, but he's made a living for 20 years by trading (well into 6 figures a year), and finds the S&P the easiest to predict, and the least noisy, most of the time he makes his cash betting that the S+P will lose value, he is very good at it

I got interested in 2020, and in April 2020 he predicted the October 2020 falls. It's a strange blend of looking at patterns on charts, and an understanding of the group think psychology of the markets

Good for him, are you putting your cock on the block and trading?

i've increased my salary sacrifice to the max allowable within the tax advantaged £40K annual limit and in a contrarian move I am hoovering up a sizeable chunk of low fee US index fund units, at an increasing discount, each month for long term future rewards, dividends are being reinvested every quarter as well.

Since WWII, units purchased of the S&P500 on the day it goes into bear market (-20%) have, on average, yielded a 22.7% gain within the next 12 months, in 10 out of the 12 bear markets, in 2 cases it took longer.

Regardless of the FUD and panic selling by the weak willed, I buy, month in month out. I reckon we are not at the bottom of the bear market yet so I look forward to buying more units at knock down sale prices for the rest of the year, or as long as it goes on for.

There is not enough capitulation and despair yet to call a bottom but it will come and these cheap units will serve me well in retirement and all I have to do is…nothing.

ToneControl

RandallFlagg said:

ToneControl said:

Lebarque said:

ToneControl said:

S+P down to 3656 today, looks like my mate was correct, the dip being just 2-3 weeks later than expected
He's been very busy shorting the S+P, so will have made lots of cash 

Is your mate Mystic Meg?

nah, but he's made a living for 20 years by trading (well into 6 figures a year), and finds the S&P the easiest to predict, and the least noisy, most of the time he makes his cash betting that the S+P will lose value, he is very good at it

I got interested in 2020, and in April 2020 he predicted the October 2020 falls. It's a strange blend of looking at patterns on charts, and an understanding of the group think psychology of the markets

Good for him, are you putting your cock on the block and trading?

i've increased my salary sacrifice to the max allowable within the tax advantaged £40K annual limit and in a contrarian move I am hoovering up a sizeable chunk of low fee US index fund units, at an increasing discount, each month for long term future rewards, dividends are being reinvested every quarter as well.

Since WWII, units purchased of the S&P500 on the day it goes into bear market (-20%) have, on average, yielded a 22.7% gain within the next 12 months, in 10 out of the 12 bear markets, in 2 cases it took longer.

Regardless of the FUD and panic selling by the weak willed, I buy, month in month out. I reckon we are not at the bottom of the bear market yet so I look forward to buying more units at knock down sale prices for the rest of the year, or as long as it goes on for.

There is not enough capitulation and despair yet to call a bottom but it will come and these cheap units will serve me well in retirement and all I have to do is…nothing.

I am trading, but not doing the day trading on the indices with large exposure, it's too risky when you have a full time job 

At present, a lot of the "dogs" got caned about a month ago, typically they drop before the big shares. Some of them are quite attractive at present, trading far below net value.

ToneControl

RandallFlagg said:

ArchtopDave said:

I find the above interesting. I'm on a somewhat different tack. I have got some cash reserves for largely non investment emergency needs if needed, but I accept that this is actually a loss maker when you take inflation into account, as saving interest rates are way below the inflation rate.

On the investment side, I'm selling some of my bond funds on the basis that recently they've held up better than global share prices, and I see this as an opportunity to increase the holdings of the funds (ones invested in shares) that have given me consistent long term performance. Additionally once we get into the 2022/2023 financial year in a couple of weeks, I'll be putting next year's allowance into my ISA, and may be buy a couple of new funds. Clearly, a careful eye needs to be kept on the performance of markets across the globe, and any decision making modified as circumstances evolve.

I have purposefully left building retirement cash until last so it gets eroded by inflation for as less time as possible before being used in drawdown. The rationale being that the source of the cash, ie my wages is index linked through annual pay increases (hopefully).

 I already have an emergency fund, a fully funded minimum of 6 months+ of household expenses kept on the sidelines, it's more now. It's been invaluable for unexpected car repairs and vets bills, having an emergency cash fund is probably the best thing I did when getting my financial shit together, along with getting out of debt.

I'm aiming for a total retirement portfolio across my pension, wife's pension and ISA of 70% stocks, 20% bonds (Gilts) and 10% cash plus a separate cash emergency fund. I have built the stocks allocation first and as mentioned above will redirect salary sacrifice contributions to bonds and wrapped cash from 2023 onwards plus any additional savings after tax will add to this, maybe sooner if the market bounces back into the green in the 2nd half of 2022. Once I get to the desired asset allocation I will rebalance annually. I keep things simple, one low cost index fund for my pension, one for my wife's pension and one for our S&S ISA.

which index funds are you using?

RandallFlagg

ToneControl said:

RandallFlagg said:

ArchtopDave said:

I find the above interesting. I'm on a somewhat different tack. I have got some cash reserves for largely non investment emergency needs if needed, but I accept that this is actually a loss maker when you take inflation into account, as saving interest rates are way below the inflation rate.

On the investment side, I'm selling some of my bond funds on the basis that recently they've held up better than global share prices, and I see this as an opportunity to increase the holdings of the funds (ones invested in shares) that have given me consistent long term performance. Additionally once we get into the 2022/2023 financial year in a couple of weeks, I'll be putting next year's allowance into my ISA, and may be buy a couple of new funds. Clearly, a careful eye needs to be kept on the performance of markets across the globe, and any decision making modified as circumstances evolve.

I have purposefully left building retirement cash until last so it gets eroded by inflation for as less time as possible before being used in drawdown. The rationale being that the source of the cash, ie my wages is index linked through annual pay increases (hopefully).

 I already have an emergency fund, a fully funded minimum of 6 months+ of household expenses kept on the sidelines, it's more now. It's been invaluable for unexpected car repairs and vets bills, having an emergency cash fund is probably the best thing I did when getting my financial shit together, along with getting out of debt.

I'm aiming for a total retirement portfolio across my pension, wife's pension and ISA of 70% stocks, 20% bonds (Gilts) and 10% cash plus a separate cash emergency fund. I have built the stocks allocation first and as mentioned above will redirect salary sacrifice contributions to bonds and wrapped cash from 2023 onwards plus any additional savings after tax will add to this, maybe sooner if the market bounces back into the green in the 2nd half of 2022. Once I get to the desired asset allocation I will rebalance annually. I keep things simple, one low cost index fund for my pension, one for my wife's pension and one for our S&S ISA.

which index funds are you using?

Our portfolio allocation is sure to attract criticism even from index fund advocates due to the extremely heavy US and 100% stocks bias but it's my money and my choice and is a considered choice:

• Blackrock US Equity Tracker (tracks the FTSE US Index) - my pension 100% (0.16% total annual fees)
• Vanguards VUSA S&P500 ETF - wife's SIPP 100% (0.15% + 0.07% annual fees)
• L&G Global Technology Index - S&S ISA 100% (0.70% total ISA annual fees)

I have been toying with switching to Global Equity Indexes (as is the commonly recommended path for indexers) such as the Blackrock MSCI World Index (non hedged) which I have access to for my pension and/or Vanguard's VWRL for my wife's but remain in the above funds, as we have been for a a few years now and I have no fears or concerns about the US's economic outlook for the next 30-50 years that deter me enough. Global funds are 60+% US anyway and it's not the US element that worry's me with global funds, it's the ROW! 

My comment above regarding asset allocation - 70% stocks, 20% bonds & 10% cash is under review, it was made before the full effect of this year's bonds crash had unfolded.

I may just carry on holding 80% stock funds and 20% cash and forego the bonds completely. The bonds crash this year has been a bit of an eye opener and I don't like the idea of being in a bond fund that has long duration bonds that are stuck in the mud for years ahead. Some of the bond funds are going to take some time to get back to parity and interest rates haven't stopped rising yet.

My plan is to put all salary sacrifice contributions to cash for 2023 to build up a cash buffer for retirement but I will be tempted to keep buying the equity indexes if the markets keeps dropping.

Feel free to critique, I am at peace and sleep like a baby at night 

ToneControl

RandallFlagg said:

ToneControl said:

RandallFlagg said:

which index funds are you using?

Our portfolio allocation is sure to attract criticism even from index fund advocates due to the extremely heavy US and 100% stocks bias but it's my money and my choice and is a considered choice:

• Blackrock US Equity Tracker (tracks the FTSE US Index) - my pension 100% (0.16% total annual fees)
• Vanguards VUSA S&P500 ETF - wife's SIPP 100% (0.15% + 0.07% annual fees)
• L&G Global Technology Index - S&S ISA 100% (0.70% total ISA annual fees)

I have been toying with switching to Global Equity Indexes (as is the commonly recommended path for indexers) such as the Blackrock MSCI World Index (non hedged) which I have access to for my pension and/or Vanguard's VWRL for my wife's but remain in the above funds, as we have been for a a few years now and I have no fears or concerns about the US's economic outlook for the next 30-50 years that deter me enough. Global funds are 60+% US anyway and it's not the US element that worry's me with global funds, it's the ROW! 

My comment above regarding asset allocation - 70% stocks, 20% bonds & 10% cash is under review, it was made before the full effect of this year's bonds crash had unfolded.

I may just carry on holding 80% stock funds and 20% cash and forego the bonds completely. The bonds crash this year has been a bit of an eye opener and I don't like the idea of being in a bond fund that has long duration bonds that are stuck in the mud for years ahead. Some of the bond funds are going to take some time to get back to parity and interest rates haven't stopped rising yet.

My plan is to put all salary sacrifice contributions to cash for 2023 to build up a cash buffer for retirement but I will be tempted to keep buying the equity indexes if the markets keeps dropping.

Feel free to critique, I am at peace and sleep like a baby at night 

I was just surprised to notice you said you had all your pension in one tracker

I think a lot of people have had most cash invested in the US.
AFAIK the world tracker is more than 50% US too

In the FT investing guide I read (by Glen Arnold), btw I recommend reading this, and he starts with the same complaints we all agree on - fund managers performing badly compared to index funds. But also says what I keep going on about - that bright normal, numerate people should be learning this stuff for themselves

Anyway he talked about not keeping US equities in 2019 (since earnings ratio being worst since 1929), but buying "deep value" OK shares, but (since US market drives changes in UK market) also hedging by buying some out-of-the-money put options on the Dow Jones.

I'd recommend learning about this.

RandallFlagg

ToneControl said:

RandallFlagg said:

ToneControl said:

RandallFlagg said:

which index funds are you using?

Our portfolio allocation is sure to attract criticism even from index fund advocates due to the extremely heavy US and 100% stocks bias but it's my money and my choice and is a considered choice:

• Blackrock US Equity Tracker (tracks the FTSE US Index) - my pension 100% (0.16% total annual fees)
• Vanguards VUSA S&P500 ETF - wife's SIPP 100% (0.15% + 0.07% annual fees)
• L&G Global Technology Index - S&S ISA 100% (0.70% total ISA annual fees)

I have been toying with switching to Global Equity Indexes (as is the commonly recommended path for indexers) such as the Blackrock MSCI World Index (non hedged) which I have access to for my pension and/or Vanguard's VWRL for my wife's but remain in the above funds, as we have been for a a few years now and I have no fears or concerns about the US's economic outlook for the next 30-50 years that deter me enough. Global funds are 60+% US anyway and it's not the US element that worry's me with global funds, it's the ROW! 

My comment above regarding asset allocation - 70% stocks, 20% bonds & 10% cash is under review, it was made before the full effect of this year's bonds crash had unfolded.

I may just carry on holding 80% stock funds and 20% cash and forego the bonds completely. The bonds crash this year has been a bit of an eye opener and I don't like the idea of being in a bond fund that has long duration bonds that are stuck in the mud for years ahead. Some of the bond funds are going to take some time to get back to parity and interest rates haven't stopped rising yet.

My plan is to put all salary sacrifice contributions to cash for 2023 to build up a cash buffer for retirement but I will be tempted to keep buying the equity indexes if the markets keeps dropping.

Feel free to critique, I am at peace and sleep like a baby at night 

I was just surprised to notice you said you had all your pension in one tracker

I think a lot of people have had most cash invested in the US.
AFAIK the world tracker is more than 50% US too

In the FT investing guide I read (by Glen Arnold), btw I recommend reading this, and he starts with the same complaints we all agree on - fund managers performing badly compared to index funds. But also says what I keep going on about - that bright normal, numerate people should be learning this stuff for themselves

Anyway he talked about not keeping US equities in 2019 (since earnings ratio being worst since 1929), but buying "deep value" OK shares, but (since US market drives changes in UK market) also hedging by buying some out-of-the-money put options on the Dow Jones.

I'd recommend learning about this.

I really don't want to get into options trading. I want to keep it simple, long term and easy to pass on to my wife and children. Buy & hold index funds forever is my strategy, each to their own.

There are a thousand opinions out there and many roads to Jericho

RandallFlagg

In bear markets I recall this sage advice:

"Don't do something, just stand there" John C Bogle

ToneControl

RandallFlagg said:

In bear markets I recall this sage advice:

"Don't do something, just stand there" John C Bogle

I've been doing plenty of that!

ToneControl

RandallFlagg

ToneControl said:

Buy when stocks are down and on sale, that's the path to long term wealth from investing in stocks, not rocket science is it? Cut through the fear as others are selling and buy more. I increased my monthly salary sacrifice 3 fold from February to do just that in US index funds. 

Buffet is a master at picking value stocks, and his moves this year are what he's always done, buy when he sees value and holds for the long term.

I'm not, so I take the safer route of buying the whole index, as I realise that while I could learn what Buffet does, just as anyone can study Mike Tyson's moves, it doesn't mean I would be a champion boxer. I know my limits!

ArchtopDave

This year's turning out to be very interesting both in terms of the overall bear market, and the very recent sharp recovery (will it be sustained ???). I've been viewing the falls in global markets as providing investment opportunities. It's been a question of trying to avoid being too clever in terms of timing, and I've felt it preferable to invest in funds involved in the more basic areas of commerce.
I came to the decision recently that I'd rather not invest in bond funds. At the beginning of the year I had four, which only represented about 8% of my portfolio. I sold one in April, when I did a bit of rejigging in relation to sorting out the investment of my 2022/2023 ISA allowance, and that included, rather belatedly, buying a holding of Berkshire Hathaway.
In the last 2 weeks, I've sold another of my bond funds, and used the money and this year's accumulated ISA dividend cash to top up a USA fund and two infrastructure funds (the price of both of the latter had held up well this year, until about 3 weeks ago when the price of both dropped about 15% for no obvious reason that I could find). Both have subsequently pleasingly recovered 10%. I've now used up all my ISA cash, though I'll hopefully be looking to boost one of my other holdings, when enough dividend money has accumulated again. 

RandallFlagg

ArchtopDave said:

This year's turning out to be very interesting both in terms of the overall bear market, and the very recent sharp recovery (will it be sustained ???). I've been viewing the falls in global markets as providing investment opportunities. It's been a question of trying to avoid being too clever in terms of timing, and I've felt it preferable to invest in funds involved in the more basic areas of commerce.
I came to the decision recently that I'd rather not invest in bond funds. At the beginning of the year I had four, which only represented about 8% of my portfolio. I sold one in April, when I did a bit of rejigging in relation to sorting out the investment of my 2022/2023 ISA allowance, and that included, rather belatedly, buying a holding of Berkshire Hathaway.
In the last 2 weeks, I've sold another of my bond funds, and used the money and this year's accumulated ISA dividend cash to top up a USA fund and two infrastructure funds (the price of both of the latter had held up well this year, until about 3 weeks ago when the price of both dropped about 15% for no obvious reason that I could find). Both have subsequently pleasingly recovered 10%. I've now used up all my ISA cash, though I'll hopefully be looking to boost one of my other holdings, when enough dividend money has accumulated again. 

Bond funds have started to bounce back hard, well the ones I have noted at least, +20-26% in the last month. I don't hold any bond funds at all so not following too closely. The sharp drop in bonds this year is unwinding from the last decade's low interest rates all in a very short space of time due to the very sharp rate of interest rate rises, in the face of a gradual inflation and interest rate rises it may have taken a decade of so to unwind and been far less painful. They will fully recover in time as individual bonds expire and get replaced/or the yields come down.

I have some decisions to make over the next 2/3 years as I want to move from 100% stock index funds, build some cash and maybe hold my nose and buy some bond funds to smooth out the volatility in retirement. But for now it's still 100% buying of US equity funds.