My financial plan for the short/medium term - Any advice?

[bitchstewie]

sidicks said:

You can buy volatility controlled equity funds, which adapt the equity exposure according to market conditions, but not sure if that is exactly what he meant?!

Isn't that just an active fund with someone juggling what they deem to be the market to reduce risk?

I don't know if it's the same thing but the kind of thing I mean was things like this

http://www.capitalgearingtrust.com/
http://monevator.com/capital-gearing-investment-tr...

I don't understand the behind the scenes stuff fully but in laymans terms you make much less but you'd have woken up safe every year including 2008.

[sidicks]

bhstewie said:

Isn't that just an active fund with someone juggling what they deem to be the market to reduce risk?

I don't know if it's the same thing but the kind of thing I mean was things like this

http://www.capitalgearingtrust.com/
http://monevator.com/capital-gearing-investment-tr...

I don't understand the behind the scenes stuff fully but in laymans terms you make much less but you'd have woken up safe every year including 2008.

This is basically a strategy that targets an absolute return, rather than a market index return, by allocating across a variety of asset classes depending on market conditions. When equity markets boom, you’d expect to be much worse off in this type of strategy. Conversely. When equity markets perform poorly, you’d expect to be much better off in this type of strategy.

You’re basically just cutting off the tails of the return distribution. These funds can be quite expensive as the manager need to have access to (and expertise in) a full range of asset classes.

Potentialy better than outright equities for short time horizons, but likely to be significantly worse over long time horizons.

[bitchstewie]

sidicks said:

This is basically a strategy that targets an absolute return, rather than a market index return, by allocating across a variety of asset classes depending on market conditions. When equity markets boom, you’d expect to be much worse off in this type of strategy. Conversely. When equity markets perform poorly, you’d expect to be much better off in this type of strategy.

You’re basically just cutting off the tails of the return distribution. These funds can be quite expensive as the manager need to have access to (and expertise in) a full range of asset classes.

Potentialy better than outright equities for short time horizons, but likely to be significantly worse over long time horizons.

Yes I did read the article and think "Who buys these things?" and assumed maybe incorrectly it's people who are already very high net worth who don't want to wake up one day and find that they aren't and who just pay "my man" to handle that stuff for them.

Nice situation to be in

[S9JTO]

xeny said:

I've a colleague who rents. Dealing with agents appears to be far more stressful than ownership. Purchasing can be stressful I'll grant you.

I can imagine so from my colleagues'/friends experiences. I don't think I will ever rent a property, it's simply dead money.

There are a couple of scenarios it would make sense (e.g. Renting out your own property and subsequently renting another property elsewhere for work or similar)

[xeny]

S9JTO said:

I can imagine so from my colleagues'/friends experiences. I don't think I will ever rent a property, it's simply dead money.

There are a couple of scenarios it would make sense (e.g. Renting out your own property and subsequently renting another property elsewhere for work or similar)

There are scenarios where it is a good choice, I don't subscribe to the always dead money opinion, but dealing with letting agents is like dealing with estate agents, they're always grubbing for fees, and unlike buying/selling a house it doesn't stop.

[S9JTO]

xeny said:

There are scenarios where it is a good choice, I don't subscribe to the always dead money opinion, but dealing with letting agents is like dealing with estate agents, they're always grubbing for fees, and unlike buying/selling a house it doesn't stop.

Fair point. However in most scenarios (apart from the one I mentioned), I can't see any benefit to renting over getting a mortgage!