FTSE100 tracker

[bitchstewie]

Mezger said:

The old and trusty adage, "Time in the Market" NOT "Timing the Market"

I would hope so. I'm new to this like Ari and I've seen a £700 swing in 2 days on £20k.

Whilst I've no intention of doing anything other than plan my next top-up it does make me realise that it's much easier to say that when it's someone else's money

[anonymous-user]

bhstewie said:

....it's much easier to say that when it's someone else's money

Yup, I think you're now fully qualified as an IFA.

[xeny]

bhstewie said:

I would hope so. I'm new to this like Ari and I've seen a £700 swing in 2 days on £20k.

3.5%.

It's informative to look at https://en.wikipedia.org/wiki/List_of_largest_dail... , and sort by % change in the losses category to see what's happened historically.

I remember viewing the figures for October 87 in vague numbness/disbelief.

[bitchstewie]

Closer to down 5% as of today

Such is life.

Ari does appear to be posting on other threads so clearly hasn't hurled himself from a window at his losses.

[GregK2]

Ari seen earlier:

[davepoth]

The FTSE 100 is a good steady investment in many respects, and the dividends are really rather good from what I've experienced. The dividends do help to smooth the day-to-day moves IMO.

I have been diversifying, I now have a bit more in Asia and developing markets. Everything has taken a bath this week.

[BarryGibb]

davepoth said:

The FTSE 100 is a good steady investment in many respects

Compared to what?

[AWF90]

Followed this thread after looking in to a S&S ISA over the past few weeks. Complete novice. Much like OP I am wanting to pay a small amount each month in to said ISA.
I would also not mind 'playing' with 20% of the funds selling and buying at will with some high risk shares and maybe 80% of total invested in a medium - long term fund (possibly a FTSE).
Is this something I would be able to do? I opened a HL account today and set up just £50 monthly DD with the first payment in to Vangaurd FTSE All Share. Just testing the water to try and teach myself as I go really, and hopefully not lose too much in the process.

[bitchstewie]

AWF90 said:

Followed this thread after looking in to a S&S ISA over the past few weeks. Complete novice. Much like OP I am wanting to pay a small amount each month in to said ISA.
I would also not mind 'playing' with 20% of the funds selling and buying at will with some high risk shares and maybe 80% of total invested in a medium - long term fund (possibly a FTSE).
Is this something I would be able to do? I opened a HL account today and set up just £50 monthly DD with the first payment in to Vangaurd FTSE All Share. Just testing the water to try and teach myself as I go really, and hopefully not lose too much in the process.

I'd think carefully about shares and stick to funds unless you'd be as happy to go put the money on red or black.

Again, respectfully, why put 100% in the FTSE? Other than "it's home"?

I'd also look at HL's fees simply because 0.45% is possibly more for them to hold your ISA than you're paying Vanguard for running the fund.

Only mention it as it'll be April soon and if you did want to move it's an opportunity to do so - but equally whilst I'm pointing out that fees matter, until you build up a big pot you're talking a small amount to HL or whoever holds it.

[Ari]

bhstewie said:

Closer to down 5% as of today

Such is life.

Ari does appear to be posting on other threads so clearly hasn't hurled himself from a window at his losses.

Haha, no, still here!

I have £6,660 invested, currently worth £6,197.44 which is a -10.75% return, in cash that's £462.56 down.

C'est la vie - investments can go down as well as up, and in the meantime my £250/month buy ins are buying more than if it had gone the other way, so hey ho.

I really really did manage to make my 'big' (relatively at least) buy right at the very very peak in January though, I don't think I could have timed it any worse!

[bitchstewie]

Time in, it's happened before, it'll happen again just stick with it.

I'm curious if you've done anything to diversify away from the FTSE tracker though?

[Ari]

Yes not too worried about it, other than the slight frustration of having been able to buy more with the same amount if I'd waited a couple of months. But then who knew? Could have gone the other way.

I haven't done anything to diversify from the FTSE100 tracker yet, simply because I haven't had the spare money to do so, but I do intend to - probably a world tracker. Currently it's just the direct debit £250 dripping in to the FTSE100 at the beginning of each month.

[TooLateForAName]

I think its worth mentioning that you should be aware of the distribution of holdings in a tracker fund.

Some people don't appreciate how the indexes are constructed. It isnt about equal holdings of the various companies. The holdings are distributed by market cap.

So for example something like 15% of the ftse100 index is Shell and BP.

[Derek Chevalier]

TooLateForAName said:

I think its worth mentioning that you should be aware of the distribution of holdings in a tracker fund.

Some people don't appreciate how the indexes are constructed. It isnt about equal holdings of the various companies. The holdings are distributed by market cap.

So for example something like 15% of the ftse100 index is Shell and BP.

https://en.wikipedia.org/wiki/Price-weighted_index

[sidicks]

Derek Chevalier said:

TooLateForAName said:

I think its worth mentioning that you should be aware of the distribution of holdings in a tracker fund.

Some people don't appreciate how the indexes are constructed. It isnt about equal holdings of the various companies. The holdings are distributed by market cap.

So for example something like 15% of the ftse100 index is Shell and BP.

https://en.wikipedia.org/wiki/Price-weighted_index

As explained above, the FTSE100 is a Capitalization-weighted index, not a price-weighted index.

[Derek Chevalier]

sidicks said:

Derek Chevalier said:

TooLateForAName said:

I think its worth mentioning that you should be aware of the distribution of holdings in a tracker fund.

Some people don't appreciate how the indexes are constructed. It isnt about equal holdings of the various companies. The holdings are distributed by market cap.

So for example something like 15% of the ftse100 index is Shell and BP.

https://en.wikipedia.org/wiki/Price-weighted_index

As explained above, the FTSE100 is a Capitalization-weighted index, not a price-weighted index.

Indeed, my point was be careful of overgeneralization

[sidicks]

Derek Chevalier said:

Indeed, my point was be careful of overgeneralization

Fair point!

[TooLateForAName]

Derek Chevalier said:

sidicks said:

Derek Chevalier said:

TooLateForAName said:

I think its worth mentioning that you should be aware of the distribution of holdings in a tracker fund.

Some people don't appreciate how the indexes are constructed. It isnt about equal holdings of the various companies. The holdings are distributed by market cap.

So for example something like 15% of the ftse100 index is Shell and BP.

https://en.wikipedia.org/wiki/Price-weighted_index

As explained above, the FTSE100 is a Capitalization-weighted index, not a price-weighted index.

Indeed, my point was be careful of overgeneralization

Fair enough.

Can we agree that people need to be careful regarding the way the index or tracker fund is generated - especially if they are mixing purchases of different trackers or trackers and individual shares.

My point really is that it is possible to find that you dont have the level of diversification/risk that you think.

[Derek Chevalier]

TooLateForAName said:

My point really is that it is possible to find that you dont have the level of diversification/risk that you think.

Agreed with that, which is why I often question why there is so much focus on the FTSE 100 when the UK as a whole only makes up 5-6% of global market cap.

[Dr Mike Oxgreen]

Derek Chevalier said:

Agreed with that, which is why I often question why there is so much focus on the FTSE 100 when the UK as a whole only makes up 5-6% of global market cap.

I suspect it’s a flawed way of thinking that many newbie investors start off with, perhaps because beginners feel safer investing at home. I know I did - I invested 50% in a FTSE All Share tracker, and split the rest between US, Europe and Asia. It’s only quite recently that I’ve rebalanced my investments to match the approximate sizes of the geographical markets. As you say, the U.K. is only 5.5% of the world, and when you look at FTSE performance over the last 10-15 years it’s a bit lacklustre compared to the rest of the world.