Your questions answered Vol 2 - IM Private Clients
Discussion
tighnamara said:
To give some perspective, what funds funds did you invest in 3 years ago and what specific dates are you using.
I don't micro-analyse the numbers; I have many investments of many different types, some dating back to the 1990s. But everything is on a spreadsheet which gets updated at least once a year so work on a gut feel, backed up by what I see and read. So I'm pretty confident three years is about right. Whether it's 2.5 or 3.5 years doesn't really matter.A major factor to consider in selling the farm on the suspicion of bad times is CGT (if no in an ISA). You could easily save a loss on your investment, but cop a CGT liability equally big. So you're out of the market for no advantage. If the sale was done within a fund then (I think) CGT wouldn't apply.
But the original premise was simply that a fund manager could use cash as an extra asset/option. That's all. It didn't seem hard. We're not talking about about billions skewing the markets, but a small innovative investment company possibly looking for a new idea. I believe the phrase is 'market disruption'. I like market disruption, having based both my (admittedly very small) businesses on it.
Maybe I should post some photos of cars.
Edited by Simpo Two on Monday 27th June 09:52
Echo the words by the other two chaps.
Had a great day yesterday, weather was perfect, hospitality was very good and meeting Coops was an added bonus. IM have a great setup, nice approachable team that all work together well.
Thanks again, i have a few pictures il see if i can load them up later.
Had a great day yesterday, weather was perfect, hospitality was very good and meeting Coops was an added bonus. IM have a great setup, nice approachable team that all work together well.
Thanks again, i have a few pictures il see if i can load them up later.
Simpo Two said:
I don't micro-analyse the numbers; I have many investments of many different types, some dating back to the 1990s. But everything is on a spreadsheet which gets updated at least once a year so work on a gut feel, backed up by what I see and read. So I'm pretty confident three years is about right. Whether it's 2.5 or 3.5 years doesn't really matter.
A major factor to consider in selling the farm on the suspicion of bad times is CGT (if no in an ISA). You could easily save a loss on your investment, but cop a CGT liability equally big. So you're out of the market for no advantage. If the sale was done within a fund then (I think) CGT wouldn't apply.
But the original premise was simply that a fund manager could use cash as an extra asset/option. That's all. It didn't seem hard. We're not talking about about billions skewing the markets, but a small innovative investment company possibly looking for a new idea. I believe the phrase is 'market disruption'. I like market disruption, having based both my (admittedly very small) businesses on it.
Maybe I should post some photos of cars.
Scenario 1 (smart use of cash within fund):A major factor to consider in selling the farm on the suspicion of bad times is CGT (if no in an ISA). You could easily save a loss on your investment, but cop a CGT liability equally big. So you're out of the market for no advantage. If the sale was done within a fund then (I think) CGT wouldn't apply.
But the original premise was simply that a fund manager could use cash as an extra asset/option. That's all. It didn't seem hard. We're not talking about about billions skewing the markets, but a small innovative investment company possibly looking for a new idea. I believe the phrase is 'market disruption'. I like market disruption, having based both my (admittedly very small) businesses on it.
Maybe I should post some photos of cars.
Edited by Simpo Two on Monday 27th June 09:52
£50,000 in 1x stocks bought
£100,000 in 1x stocks > cash within fund
Stocks become worth £50,000
Buy back 2x stocks
Stocks go back up to £150,000, or £300,000
Retire
Cap gains = £300,000 - £50,000 * 20pc = £50,000
Net gain = £250,000
Scenario 2 (no use of cash within fund, just ride it out):
£50,000 in 1x stocks bought
£100,000 in 1x stocks before a stock market crash
Stocks become worth £50,000
Stocks go back up to £150,000
Retire
Cap gains = £150,000 - £50,000 * 20pc = £25,000
Net gain = £125,000
Scenario 3 (sell out of fund to cash):
£50,000 in 1x stocks bought
£100,000 in 1x stocks > cash outside fund
Cap gains = £100,000 - £50,000 * 20pc = £10,000
Net gain = £90,000
Stocks become worth £50,000
Buy back 1.8x stocks
Stocks go back up to £150,000
Retire
Cap gains = £270,000 - £90,000 * 20pc = £36,000
Net gain = £234,000
So you're £16,000 worse off (by my 5 min maths which has a 50pc chance of being wrong) by moving to cash yourself and realising gains/losses and having to pay the bill, vs having the fund do it for you.
However, I'd argue you have pension wrappers and ISA wrappers to use in this way, with the funds you want to manage with cash in this way (potentially), which won't attract CGT, and so you can hop to cash and back into funds however you like.
My personal feelings are that if IML is letting IM manage a goal for you, you should leave them to it.
If you feel that cash can be leveraged to make you more money, then that's your decision and you should manage your money in your interests to that end.
Of course, if IM are happy to let you interfere with their IML configuration, and let you just say "put 50pc in cash in IML for me please" and then you wait a week for it to be sold down 50pc so you have a wodge of cash set aside but fund wrapped, then fine.
But then I'd expect the cost of offering such a service might be different because of the possible workloads. Which could eat into that £16,000 notional saving in my example.
In any case, great work IM. I'm still more than happy with the pros/cons of your service vs anyone else doing SIPPs!
Mr Whippy said:
So you're £16,000 worse off (by my 5 min maths which has a 50pc chance of being wrong) by moving to cash yourself and realising gains/losses and having to pay the bill, vs having the fund do it for you.
However, I'd argue you have pension wrappers and ISA wrappers to use in this way, with the funds you want to manage with cash in this way (potentially), which won't attract CGT, and so you can hop to cash and back into funds however you like.
Good maths there. Everybody's situation is different of course; my pension is a source of income not saving. I can indeed hop in and out of cash when I like, my thought was that an investment professional was more likely to do it better than me. They happily switch from stock to stock, which requires equal if not more judgement, but cash, which by comparison is an inanimate object, appears terrifying. If that decision is so difficult, why leave it to the amateur? It seems akin to an airline pilot saying 'We're coming in to land, but it's a bit risky so could one of the passengers take over please?'However, I'd argue you have pension wrappers and ISA wrappers to use in this way, with the funds you want to manage with cash in this way (potentially), which won't attract CGT, and so you can hop to cash and back into funds however you like.
Anyway, we are where we are so we shall just have to suck it up.
Shipping. They're making a bloody fortune. Where is a Shipping fund?
A solid result from NIKE despite ongoing Covid related issues in China which are effecting Sales (-18%) due to persistent lockdowns and distractions from daily life. This negative impact was offset by a +7% increase in NIKE DIRECT, its direct to customer ecommerce platform as well as double digit growth in APLA and EMEA regions (Asia Pacific/Latin America, Europe, Middle East and Africa. The take away is clear. Nikes’s growth story is intact and these temporary headwinds will abate over the next few quarters.
A small drop in Gross margin, again is directly related to higher logistics cost however the company has navigated this impact well via higher direct to customer sales which attract a higher margin.
The Board has approved an $18B stock repurchase program, a clear sign they think the stock is cheap.
Interestingly, management have not seen any signs of inflation dampening demand for their products however they are monitoring the situation closely. It is worth noting that this is precisely why we hold this company within PHE. A super-brand that is defensive in downturns
For fiscal 2023 the company is factoring in double digit growth (even in China) coupled with a FX offset of up to 4% (USD is strong!). Gross margins flat to -ve 50 bps due to logistical costs
Some revenue/earnings figures below as well as a sales breakdown by region. You can see the China lockdown impact in black and white.
A small drop in Gross margin, again is directly related to higher logistics cost however the company has navigated this impact well via higher direct to customer sales which attract a higher margin.
The Board has approved an $18B stock repurchase program, a clear sign they think the stock is cheap.
Interestingly, management have not seen any signs of inflation dampening demand for their products however they are monitoring the situation closely. It is worth noting that this is precisely why we hold this company within PHE. A super-brand that is defensive in downturns
For fiscal 2023 the company is factoring in double digit growth (even in China) coupled with a FX offset of up to 4% (USD is strong!). Gross margins flat to -ve 50 bps due to logistical costs
Some revenue/earnings figures below as well as a sales breakdown by region. You can see the China lockdown impact in black and white.
PM3 said:
.....and they are STILL not out of Russia. In the pretence club on that one; hoping ( a cast iron certainty with the great and the stupid today ) that people will forget.
Nike? Yes they are. Nothing sold in the country last quarter as operations are suspended pending the formulation of an exit strategy-which has now been completed. Nike will permanently extricate themselves from Russia Simpo Two said:
I can indeed hop in and out of cash when I like, my thought was that an investment professional was more likely to do it better than me. They happily switch from stock to stock, which requires equal if not more judgement, but cash, which by comparison is an inanimate object, appears terrifying. If that decision is so difficult, why leave it to the amateur?
I'm with Simpo on this one, my thinking is a professional (or group of professionals), especially one with many years of experience, and that keeps up to date with what's going on in the world should have a far better idea of what's going to affect the market.Ron-ski said:
Simpo Two said:
I can indeed hop in and out of cash when I like, my thought was that an investment professional was more likely to do it better than me. They happily switch from stock to stock, which requires equal if not more judgement, but cash, which by comparison is an inanimate object, appears terrifying. If that decision is so difficult, why leave it to the amateur?
I'm with Simpo on this one, my thinking is a professional (or group of professionals), especially one with many years of experience, and that keeps up to date with what's going on in the world should have a far better idea of what's going to affect the market.Mazinbrum said:
Ron-ski said:
Simpo Two said:
I can indeed hop in and out of cash when I like, my thought was that an investment professional was more likely to do it better than me. They happily switch from stock to stock, which requires equal if not more judgement, but cash, which by comparison is an inanimate object, appears terrifying. If that decision is so difficult, why leave it to the amateur?
I'm with Simpo on this one, my thinking is a professional (or group of professionals), especially one with many years of experience, and that keeps up to date with what's going on in the world should have a far better idea of what's going to affect the market.tight fart said:
duckson said:
My regular DD from my Santander account to IM wasn’t taken this morning, anyone had this issue today?
When I logged in this morning (Santander) they said they had problems and some payments may be delayed. Ron-ski said:
Simpo Two said:
I can indeed hop in and out of cash when I like, my thought was that an investment professional was more likely to do it better than me. They happily switch from stock to stock, which requires equal if not more judgement, but cash, which by comparison is an inanimate object, appears terrifying. If that decision is so difficult, why leave it to the amateur?
I'm with Simpo on this one, my thinking is a professional (or group of professionals), especially one with many years of experience, and that keeps up to date with what's going on in the world should have a far better idea of what's going to affect the market.Managing funds is one thing, withdrawing everyone’s money from your funds (their business) and investing all in cash would be messy.
Nothing wrong with having a personal discussion though and then agreeing to go full / partly into cash, but expecting fund managers to move all their clients into cash whenever things get “tasty” is out with their remit.
Imagine trying to time back into the market, if they missed it by X amount people would be very quick to be critical about them not re investing at the correct time.
I wouldn’t want to be invested somewhere where someone is making a decision when to move my funds into cash and when to re invest.
Only my personal view.
Edited by tighnamara on Friday 1st July 22:19
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