Funds dropping!

Funds dropping!

Author
Discussion

98elise

Original Poster:

15,086 posts

108 months

Monday 21st October
quotequote all
As anyone elses funds taking a pasting at the moment? I have a spread of the bigger funds for my S&S investments and they all seem to be down a lot in the past month.

bitchstewie

22,736 posts

157 months

Monday 21st October
quotequote all
Not knowing what you hold, it is like down to one of (in no particular order):

  • Trump
  • Brexit
  • China
  • Pound/Dollar
It's a very strange time in that you can have a day where you see world markets do well but if the pound strengthens most things are in the red.

JulianPH

4,776 posts

61 months

Monday 21st October
quotequote all
They all do that sometimes, sir! wink

Markets are falling, so funds will fall with them, some more than others though.


98elise

Original Poster:

15,086 posts

108 months

Monday 21st October
quotequote all
JulianPH said:
They all do that sometimes, sir! wink

Markets are falling, so funds will fall with them, some more than others though.
Just seems to be a big drop recently, bigger than the markets. That said they have risen well over the past few years so you have to expect the odd big fall.

bitchstewie

22,736 posts

157 months

Monday 21st October
quotequote all
Which funds?

98elise

Original Poster:

15,086 posts

108 months

Monday 21st October
quotequote all
bhstewie said:
Not knowing what you hold, it is like down to one of (in no particular order):

  • Trump
  • Brexit
  • China
  • Pound/Dollar
It's a very strange time in that you can have a day where you see world markets do well but if the pound strengthens most things are in the red.
A spread of some of the usual suspects LTGE, Fundsmith etc.

bitchstewie

22,736 posts

157 months

Monday 21st October
quotequote all
98elise said:
A spread of some of the usual suspects LTGE, Fundsmith etc.
Fundsmith is pretty much 70% US exposure so you'll have taken a hit on the dollar as the pound has gained with a no-deal Brexit looking less likely.

As I said there have been a few days where you look at global stock exchanges or individual company shares and they're green, but the pound gaining means you're in the red just due to currency.

Robbo996

5 posts

4 months

Monday 21st October
quotequote all
I feel your pain, my funds are all down in the last week.
Up on the last 6 -12 months apart from HL which is lower than release price today.
My falls all seem to tie in with the pound going up against the dollar.
Should I sell or wait it out?
Might sell a little and try to buy back if they go lower...

putonghua73

489 posts

75 months

Tuesday 22nd October
quotequote all
Robbo996 said:
I feel your pain, my funds are all down in the last week.

Up on the last 6 -12 months apart from HL which is lower than release price today.

My falls all seem to tie in with the pound going up against the dollar.

Should I sell or wait it out?

Might sell a little and try to buy back if they go lower...
Funds, like markets, will fluctuate. If you are seriously considering selling at the sight of a little bit of red in your portfolio than you need to exit all of your positions right now because you are not psychologically ready to be investing.

Ask yourself a number of questions:
What are your reasons for investing?
What is your investing timeframe?
What is your attitude to risk?

The answers to these questions - and others - can determine if your investments are aligned to your objectives and timeframe (the two are often linked, and are usually the crux of the issue - short-term linked to a long-term investment vehicle).

You should be benchmarking your funds against an appropriate barometer i.e. a particular market, asset, etc (your funds will probably provide a benchmark in their prospectus). If your funds start to underperforn against the benchmark for a protracted period, then there is an issue with the management of the fund, as opposed to broader market conditions. Note: your fund can outperform the benchmark and still be in the red - the fund is just not doing as badly in terms of relative performance as the benchmark.

I want you to avoid a cascading pattern of selling, buying back in, selling, buying back in, selling, etc all of which incurs costs which devours any return. I especially want you to avoid the anxiety if market fundamentals deteriorate based upon weaker Q4 earnings and other factors, that could see a sustained downward trend.

TL;DR base investment decisions on objectives, timeframe and commensurate level of risk.


rdjohn

3,791 posts

142 months

Tuesday 22nd October
quotequote all
Strengthening of the pound has knocked back performance of overseas holdings at the moment.

Dave.

5,693 posts

200 months

Tuesday 22nd October
quotequote all
3% down in a month....

Currently doing worse than my Premium Bonds. hehe


garyhun

27,763 posts

175 months

Tuesday 22nd October
quotequote all
I won’t need to cash in any of mine for at least 10 years so never bother looking at them as I’m happy with the underlying investment categories.

wrencho

78 posts

12 months

Tuesday 22nd October
quotequote all
Sorry for the tangent but in the humble opinion of the PH Finance Wizards what is the optimal number of funds to be invested in for the NORMAL human who doesn't want to have a perfectly spread portfolio?

We have an investment for the kids to get Child 1 a house (hopefully!) and for additional support for Child 2 who is disabled and likely to live with us forever. I've been reviewing the performance and using my most technical language it's been a bit st (UK equities) so thinking of shaking things up and splitting the pot into a US equity based fund and possibly another...

Any ideas?

Robbo996

5 posts

4 months

Tuesday 22nd October
quotequote all
putonghua73 said:
Funds, like markets, will fluctuate. If you are seriously considering selling at the sight of a little bit of red in your portfolio than you need to exit all of your positions right now because you are not psychologically ready to be investing.

Ask yourself a number of questions:
What are your reasons for investing?
What is your investing timeframe?
What is your attitude to risk?

The answers to these questions - and others - can determine if your investments are aligned to your objectives and timeframe (the two are often linked, and are usually the crux of the issue - short-term linked to a long-term investment vehicle).

You should be benchmarking your funds against an appropriate barometer i.e. a particular market, asset, etc (your funds will probably provide a benchmark in their prospectus). If your funds start to underperforn against the benchmark for a protracted period, then there is an issue with the management of the fund, as opposed to broader market conditions. Note: your fund can outperform the benchmark and still be in the red - the fund is just not doing as badly in terms of relative performance as the benchmark.

I want you to avoid a cascading pattern of selling, buying back in, selling, buying back in, selling, etc all of which incurs costs which devours any return. I especially want you to avoid the anxiety if market fundamentals deteriorate based upon weaker Q4 earnings and other factors, that could see a sustained downward trend.

TL;DR base investment decisions on objectives, timeframe and commensurate level of risk.
Excellent reply thank you.


NickCQ

2,119 posts

43 months

Tuesday 22nd October
quotequote all
wrencho said:
Sorry for the tangent but in the humble opinion of the PH Finance Wizards what is the optimal number of funds to be invested in for the NORMAL human who doesn't want to have a perfectly spread portfolio?

We have an investment for the kids to get Child 1 a house (hopefully!) and for additional support for Child 2 who is disabled and likely to live with us forever. I've been reviewing the performance and using my most technical language it's been a bit st (UK equities) so thinking of shaking things up and splitting the pot into a US equity based fund and possibly another...

Any ideas?
A possibly simpler way to do it is to buy one fund that invests in global equities (like the vanguard life strategy ones).

This has the advantage that the portfolio manager keeps an eye on the balance between various investment types (ie if stocks shoot up they will allocate some of those gains back into bonds to keep balance.)

SS2.

11,450 posts

185 months

Tuesday 22nd October
quotequote all
garyhun said:
I won’t need to cash in any of mine for at least 10 years so never bother looking at them as I’m happy with the underlying investment categories.
Same here, although I can rarely fight the temptation to check performances on a daily basis.

Derek Chevalier

2,590 posts

120 months

Tuesday 22nd October
quotequote all
NickCQ said:
wrencho said:
Sorry for the tangent but in the humble opinion of the PH Finance Wizards what is the optimal number of funds to be invested in for the NORMAL human who doesn't want to have a perfectly spread portfolio?

We have an investment for the kids to get Child 1 a house (hopefully!) and for additional support for Child 2 who is disabled and likely to live with us forever. I've been reviewing the performance and using my most technical language it's been a bit st (UK equities) so thinking of shaking things up and splitting the pot into a US equity based fund and possibly another...

Any ideas?
A possibly simpler way to do it is to buy one fund that invests in global equities (like the vanguard life strategy ones).

This has the advantage that the portfolio manager keeps an eye on the balance between various investment types (ie if stocks shoot up they will allocate some of those gains back into bonds to keep balance.)
This is an informative read from Finalytiq

https://finalytiq.co.uk/the-multi-asset-fund-gravy...


Mr Pointy

4,435 posts

106 months

Tuesday 22nd October
quotequote all
Robbo996 said:
I feel your pain, my funds are all down in the last week.
Up on the last 6 -12 months apart from HL which is lower than release price today.
My falls all seem to tie in with the pound going up against the dollar.
Should I sell or wait it out?
Might sell a little and try to buy back if they go lower...
There was an article someone linked to recently in which a highly regarded fund manager pointed out that his fund was running at something like 27% annualised return but the average investor in the fund was only seeing about 7% because they kept moving money out in what seemed like the bad times & back in when it seemed the good times were back. The issue is they always miss the start of both of those periods & were in a cycle of crystalising losses & missing gains.

Mr Pointy

4,435 posts

106 months

Tuesday 22nd October
quotequote all
Derek Chevalier said:
This is an informative read from Finalytiq

https://finalytiq.co.uk/the-multi-asset-fund-gravy...

As one of the comments to that article points out those graphs are only looking at 3 & 5 years in the present bullish market. If it was over 20 years it might be a bit more convincing that they were capturing true long term performance?

Of course they need a snappy conclusion to sell the book for £499/£4999.

Derek Chevalier

2,590 posts

120 months

Tuesday 22nd October
quotequote all
Mr Pointy said:
Robbo996 said:
I feel your pain, my funds are all down in the last week.
Up on the last 6 -12 months apart from HL which is lower than release price today.
My falls all seem to tie in with the pound going up against the dollar.
Should I sell or wait it out?
Might sell a little and try to buy back if they go lower...
There was an article someone linked to recently in which a highly regarded fund manager pointed out that his fund was running at something like 27% annualised return but the average investor in the fund was only seeing about 7% because they kept moving money out in what seemed like the bad times & back in when it seemed the good times were back. The issue is they always miss the start of both of those periods & were in a cycle of crystalising losses & missing gains.
Peter Lynch