Suggested Managed Funds
- Thread starter Belu
- Start date
I was just on the phone to my broker. He knows I do most of my trading on-line so never gives me tips, but we get along OK.
What he did say though was that he's selling much of his personal account. So I'll add his opinion to mine and state clearly: There is a 90% chance that your index fund would lose money in the next year, possibly heavily.
Sometimes the best thing to do is to do nothing. If you feel you must do something, ask your broker for a junior in the materials/energy sectors. At least you'll have a fighting chance.
What he did say though was that he's selling much of his personal account. So I'll add his opinion to mine and state clearly: There is a 90% chance that your index fund would lose money in the next year, possibly heavily.
Sometimes the best thing to do is to do nothing. If you feel you must do something, ask your broker for a junior in the materials/energy sectors. At least you'll have a fighting chance.
My funds are losing money and driving me nuts. I can't withdraw it... and I probably have to wait at least 5 years now to get some sort of gain.
Sigh. Maybe i should just withdraw it and offset against my mortgage.
Sigh. Maybe i should just withdraw it and offset against my mortgage.
Why can't you withdraw it?
I am looking at a close ended fund (opens for subscription for a 6 weeks window, and matures x years into the future).
I tend to agree with Sunfish's general outlook, so the funds I am looking at have:
long and short shares (internationally)
bonds
oil futures
commodities futures
gold and precious metals futures
etc
Cheers,
The Y-man
I can but i was wondering if it was a good thing to be doing at this point.
Or should i leave it in there as I was running a loss.
What some of you forget to realise is that index funds are for a long haul!
Not 2-3 or even 5 years... more like 15-20 or even 30 years.
Ive started my Vanguard Index Fund in Australian Shares last year with 5 K. I add $200 every month. My shares took a big dive... does not matter though because I got plenty of time to see them grow. I am under 30 yo though. Some of you who are nearing retirement age, I doubt its worth keeping one.
Not 2-3 or even 5 years... more like 15-20 or even 30 years.
Ive started my Vanguard Index Fund in Australian Shares last year with 5 K. I add $200 every month. My shares took a big dive... does not matter though because I got plenty of time to see them grow. I am under 30 yo though. Some of you who are nearing retirement age, I doubt its worth keeping one.
*cough*...The argument for index fund investing is more to do with it's passivity, less time and effort involved in portfolio construction/management, less ongoing fees/transaction costs and your long-term likelihood of NOT beating the index...rather than whether or not the index will go up or down next year. Playing roulette on the ASX/active fund manager dart-board, as most stock specufestors persist in doing, for 99% of them at least, is a guaranteed way of being beaten in the long-term. Further, if time is not on your side, gambling on the sharemarket is even more of a high-risk recipe for disaster. Unfortunately though, most gamblers/dart players only learn this painful lesson after losing their $$$ and ego, and finally realising that they never ever belonged in that (lucky) 1% group...*cough*
I was just on the phone to my broker. He knows I do most of my trading on-line so never gives me tips, but we get along OK.
What he did say though was that he's selling much of his personal account. So I'll add his opinion to mine and state clearly: There is a 90% chance that your index fund would lose money in the next year, possibly heavily.
Sometimes the best thing to do is to do nothing. If you feel you must do something, ask your broker for a junior in the materials/energy sectors. At least you'll have a fighting chance.
Two comments:
1) even if you are right about 90% chance of losing money in the next year, you will have a higher probability of making a very nice return in the year after that, bear markets dont last forever.
2) everyone is piling into materials/energy stocks, if you follow what everyone else is doing then how can you 'outperform' by definition. Following the heards never made outperforming returns in the long run.
Not much good for a retiree.
Personally, sounds like a lazy cop-out for a young 'un too.
You can make much more money investing than working for the man so it's worth your while to study and make your investments work for you, not you working for them.
Sunfish is correct in pointing out investing in downward trending Indexes (bear market) is a very poor strategy to make money. Having lost money in the first year will greatly diminish your returns in following uptrending years. A better strategy if you invest long, is to only invest in securities that are already in an established uptrend. If you invest in Indexes best to wait until they are pointing in the right direction at least for your initial startup period.
Some reasons investors are piling into materials/energy stocks. One there is strong increasing demand for materials and energy. Two, those investors are not focused on outperformance, but are simply investing in securities that are performing well for sound fundamental reasons.
Three, most other sectors have a negative immediate outlook, as they are being impacked by financial turmoil on the global markets together with rising material and energy input costs courtesy of decreasing value of the USA dollar.
Four, investments in commodities and energy are a hedge against inflation (US$ devaluation).
Tasman, I would be interested in data you have to quantify that first assertion.
What you are saying is that you can outperform the index (say ASX200 acc index for example) by waiting for the market to be trending up before buying.
Fine, just show me some evidence for this alpha creation because it's not that easy from my point of view and experience.
What you are saying is that you can outperform the index (say ASX200 acc index for example) by waiting for the market to be trending up before buying.
Fine, just show me some evidence for this alpha creation because it's not that easy from my point of view and experience.
Yes, it all sounds great in theory, but doing it is a different matter isn't it.
I've had the best success buying stuff when it is very low/underpriced, not from jumping on established trends (though I recognise some do that successfully).
How do they assess a "growth fund"?
Also, what happens to your hard earned in the event of a stock market crash in a fund such as this?
