FTSE100 tracker

[xeny]

I know someone who likens it to betting on horse racing, but with the benefit that even if the horse does badly, you generally get at least some of your stake back.

[bitchstewie]

xeny said:

Pretty much.

Questions to ask yourself are

Am I happy 100% in equities? ie you’re in for over say 5 years, you’re after more return and am prepared to accept volatility in order to get it.

If you think at some point you may want to hold individual companies or funds not from vanguard then using someone other than vanguard as a broker, even if right now you only want to hold vanguard funds, is worth considering.

Right now I'm just looking for some half sensible way that I may get a little more than 1.2% across my savings.

I'm not brave enough or rich enough to take huge risks but if you can make 5-10% a year on a subset it soon pulls up the average return at relatively little risk - if that makes sense and I'm not using man maths to try and kid myself.

[FredClogs]

Reading a lot of the end of year summary blogs etc... Around in the media at the moment there seems to be a pretty clear consensus that if 2018 brings anything it will be bringing volatility back into the market. Not a market best suited to passive investing.

[BanzaiMan]

FredClogs said:

Reading a lot of the end of year summary blogs etc... Around in the media at the moment there seems to be a pretty clear consensus that if 2018 brings anything it will be bringing volatility back into the market. Not a market best suited to passive investing.

Would be good to know what predictive ability the consensus bring, and why volatile markets are bad for passive investing

[Ari]

I'd be interested too.

[FredClogs]

BanzaiMan said:

FredClogs said:

Reading a lot of the end of year summary blogs etc... Around in the media at the moment there seems to be a pretty clear consensus that if 2018 brings anything it will be bringing volatility back into the market. Not a market best suited to passive investing.

Would be good to know what predictive ability the consensus bring, and why volatile markets are bad for passive investing

If you're prepared and/or able to sit out the volatility then conventional wisdom suggests you do and in the long run you'll get good returns.

But markets returning to "normal" levels of volatility after this long bull run we've had for the past 5 years + means
A) blind monthly buys into the market could see quite substantial short term losses
B) well managed dynamic funds able to take short and forward buy positions will be expected to out perform, in the short to medium term.

[BanzaiMan]

FredClogs said:

BanzaiMan said:

FredClogs said:

Reading a lot of the end of year summary blogs etc... Around in the media at the moment there seems to be a pretty clear consensus that if 2018 brings anything it will be bringing volatility back into the market. Not a market best suited to passive investing.

Would be good to know what predictive ability the consensus bring, and why volatile markets are bad for passive investing

If you're prepared and/or able to sit out the volatility then conventional wisdom suggests you do and in the long run you'll get good returns.

But markets returning to "normal" levels of volatility after this long bull run we've had for the past 5 years + means
A) blind monthly buys into the market could see quite substantial short term losses
B) well managed dynamic funds able to take short and forward buy positions will be expected to out perform, in the short to medium term.

b). Is there any analysis that suggests that this is the case?

[bitchstewie]

Forgive what may be a daft question but with Vanguard funds (not specifically this one) -

Is there any benefit buying via someone else if you just want to drop in an initial amount and top up from time to time?

Is there any danger should Vanguard find themselves in financial difficulty?

Not talking lots to start with but trying to think ahead if I am drip feeding and at some point it's an amount worth caring about a lot more

[Orchid1]

bhstewie said:

Forgive what may be a daft question but with Vanguard funds (not specifically this one) -

Is there any benefit buying via someone else if you just want to drop in an initial amount and top up from time to time?

Is there any danger should Vanguard find themselves in financial difficulty?

Not talking lots to start with but trying to think ahead if I am drip feeding and at some point it's an amount worth caring about a lot more

From what i've read into it all if a fund got into trouble there's a good chance it would be taken over by another fund manager if it's something that could be rescued. Someone with more knowledge would give a more accurate answer however.

[xeny]

bhstewie said:

Is there any benefit buying via someone else if you just want to drop in an initial amount and top up from time to time?

Is there any danger should Vanguard find themselves in financial difficulty?

Maybe if the investment gets big enough as Vanguard charge a capped % figure, and some companies charge a fixed annual fee.

http://monevator.com/compare-uk-cheapest-online-br... has a table and a web based interactive broker costing tool

There shouldn't be any danger - there's financial separation between Vanguard's business and the assets.

However if you're getting to the "living off this investment" stage, it may make sense to split it in two simply so if the worst happens you're certain of no interruption of access to some of your assets.

[BanzaiMan]

bhstewie said:

Forgive what may be a daft question but with Vanguard funds (not specifically this one) -

Is there any benefit buying via someone else if you just want to drop in an initial amount and top up from time to time?

Is there any danger should Vanguard find themselves in financial difficulty?

Not talking lots to start with but trying to think ahead if I am drip feeding and at some point it's an amount worth caring about a lot more

Vanguard don't have a SIPP wrapper yet IIRC

[bitchstewie]

xeny said:

Maybe if the investment gets big enough as Vanguard charge a capped % figure, and some companies charge a fixed annual fee.

http://monevator.com/compare-uk-cheapest-online-br... has a table and a web based interactive broker costing tool

There shouldn't be any danger - there's financial separation between Vanguard's business and the assets.

However if you're getting to the "living off this investment" stage, it may make sense to split it in two simply so if the worst happens you're certain of no interruption of access to some of your assets.

I'm at the "sorting out something beyond a savings account" & maximising ISA allowances stage (as close to a new years resolution as I shall get)

So a S&S ISA seems a no brainer and reading the site from this thread https://www.pistonheads.com/gassing/topic.asp?h=0&... has made me think a little more that there are few excuses for not doing the basics (not about to dump half my salary into an S&S! )

[Ari]

Okay so, one month in and the current return is 4.25%!

4.25% in a month versus 1% in a year from a savings ISA! Yes, I know, it can go the other way too.

My first monthly direct debit (£250) went in at the beginning of this month on top of my original £300 and I'm £13.68 ahead.

I know it's only piddling amounts that I'm playing with here, but it is fascinating.

Part of me wants to take a big chunk of savings and put it in, but a bigger part is saying 'don't be stupid, you're basing this on four weeks of having got lucky in the timing of when you went in, you could be £13.68 down in another four weeks'.

[Ari]

fk it - just put £5,000 in. This is my logic, tell me I'm wrong (not that it'll make any difference now, but genuinely interested in more experienced views on this, it's all brand new to me, and I find it fascinating!)

There are three possible scenarios:

1. It does absolutely nothing = I’m £50/year worse off compared to having it in savings.
2. It dives = I lose money on paper but with no short to medium plans to take it back out, hopefully it will eventually come back eventually and in the meantime it’s an opportunity to buy more at a lower price should I choose.
3. It goes up = I win

PS. I'm not trying to be Billy Big bks posting this, I fully realise that £5,000 is not exactly the stuff of high finance. But I am genuinely interested in peoples views, even if it's to tell me I've been an idiot. I see this as a gamble, but hopefully a cautious one. We'll see.

[GT03ROB]

Ari said:

fk it - just put £5,000 in. This is my logic, tell me I'm wrong (not that it'll make any difference now, but genuinely interested in more experienced views on this, it's all brand new to me, and I find it fascinating!)

There are three possible scenarios:

1. It does absolutely nothing = I’m £50/year worse off compared to having it in savings.
2. It dives = I lose money on paper but with no short to medium plans to take it back out, hopefully it will eventually come back eventually and in the meantime it’s an opportunity to buy more at a lower price should I choose.
3. It goes up = I win

PS. I'm not trying to be Billy Big bks posting this, I fully realise that £5,000 is not exactly the stuff of high finance. But I am genuinely interested in peoples views, even if it's to tell me I've been an idiot. I see this as a gamble, but hopefully a cautious one. We'll see.

Is a fair assessment!

[xeny]

Ari said:

2. It dives = I lose money on paper but with no short to medium plans to take it back out, hopefully it will eventually come back eventually and in the meantime it’s an opportunity to buy more at a lower price should I choose.

This is IMHO the critical thing to appreciate about the market - until you sell you've not lost - ergo you need to arrange things so you're not a _forced_ seller, which means having some kind of cash "roof fund" and a sufficiently long investment horizon.

[Ari]

GT03ROB said:

Is a fair assessment!

Thanks, that's reassuring. My concern is that I've bought in at what is currently the very top of the market, but it's so easy just to sit on the sidelines thinking up reasons not to get involved (not that that is necessarily a bad strategy - a fool and his money and all that!)

[MWM3]

With 5k in I would be investing in a few funds. Or if you wanted the ease of only having one fund, I would be buying a fund of funds i.e Vanguard Life Strategy 80

[Ari]

xeny said:

Ari said:

2. It dives = I lose money on paper but with no short to medium plans to take it back out, hopefully it will eventually come back eventually and in the meantime it’s an opportunity to buy more at a lower price should I choose.

This is IMHO the critical thing to appreciate about the market - until you sell you've not lost - ergo you need to arrange things so you're not a _forced_ seller, which means having some kind of cash "roof fund" and a sufficiently long investment horizon.

Totally. I certainly wouldn't be doing this with money I might need in a fortnight.

[Ari]

MWM3 said:

With 5k in I would be investing in a few funds. Or if you wanted the ease of only having one fund, I would be buying a fund of funds i.e Vanguard Life Strategy 80

That's interesting, spreading the load I guess? I went for the FTSE100 because I figured they were likely to be amongst the most stable of companies, but as I've said, I'm very new and very green so interested in your thoughts.