Your questions answered Vol 2 - IM Private Clients

[Bam89]

AdamIM said:

Bam89 said:

Do we have an estimated launch date for the new managed portfolio that was mentioned (IM Lifestyle?)

Hi Bam89,

Nik posted an update on Thursday last week with a tentative '10 days away'-so next week hopefully

Thanks Adam, I did scan the thread but missed that! Looking forward to it

[PaulWoof]

So is it now correct that we can no longer use bank transfers for amounts less than £5000?

We are limited to DD's on 1st/14th?

[markiii]

surely that can't be right, going to be a pain for one off transfer of less than 5k

[pingu393]

KTF said:

If you were to switch to IM Lifestyle would you not then be locking in your losses?

Is locking in your losses so bad if you jump ship to something that is rising, rather than sticking with something that is falling?

£100 becomes £85. If you leave it where it is, it could go up or down. Do you know which? If your £85 could become a guaranteed £86, or if left alone it could be either £75 or £95. Where do you put it? Only you know the answer.

A 15% loss needs a 17.6% gain to get back to square one. Does anybody think there is a 17.6% gain out there? Inflation is supposed to be 11%, this means a 30% gain is required to pull a 15% loss back to index-linked.

Best thing to do might be to spend on things that will save. I've gone for solar panels and a wall battery. I reckon that a £13k investment will return many times more than shares - but only time will tell.

[leef44]

pingu393 said:

KTF said:

If you were to switch to IM Lifestyle would you not then be locking in your losses?

Is locking in your losses so bad if you jump ship to something that is rising, rather than sticking with something that is falling?

£100 becomes £85. If you leave it where it is, it could go up or down. Do you know which? If your £85 could become a guaranteed £86, or if left alone it could be either £75 or £95. Where do you put it? Only you know the answer.

A 15% loss needs a 17.6% gain to get back to square one. Does anybody think there is a 17.6% gain out there? Inflation is supposed to be 11%, this means a 30% gain is required to pull a 15% loss back to index-linked.

Best thing to do might be to spend on things that will save. I've gone for solar panels and a wall battery. I reckon that a £13k investment will return many times more than shares - but only time will tell.

Plus also if you have a portfolio of IM/PH products already then switching to IM Lifestyle will mostly be a rebalance. It's just that you are giving that responsibility to IM to make.

Well, at least, that's how I understand it.

[PaulWoof]

markiii said:

surely that can't be right, going to be a pain for one off transfer of less than 5k

I think that was the message I got last time, I thought it was strange as it means bank transfers are now limited to 25% of the annual ISA allowance.

You can now only do one off DD's on 2 set dates in the month for any amounts less?

[leef44]

PaulWoof said:

markiii said:

surely that can't be right, going to be a pain for one off transfer of less than 5k

I think that was the message I got last time, I thought it was strange as it means bank transfers are now limited to 25% of the annual ISA allowance.

You can now only do one off DD's on 2 set dates in the month for any amounts less?

My guess is that this started off as a platform for clients investing in over £100,000 portfolio. You can imagine most transactions would be at fixed regular monthly intervals with less transactions as one-off lump sums.

Now when they let this mob in (us) and forwent the threshold limit they are now overwhelmed with many small bespoke transactions and have neither the platform nor the resources to manage this level of mob. I may be wrong and I mean no disrepect to the fantastic service we've had to date but it opens up a different business model. It may not be economically feasible to continue like this.

So it makes sense to reduce the number of transactions by increasing the threshold and fixing the intervals.

At the end of the day, the platform is for long term investment and not day trading so with that in mind, it makes sense.

[DonkeyApple]

Mr Pointy said:

DonkeyApple said:

When it comes to long term investment, even though many values are rebasing, if you're genuinely invested in a basket of quality blue chips with a fair balance then really the only sane action is to maintain the steady purchases and remember one has a 10/20/30 year outlook.

What about those investors who have a 1/3/5/10 year outlook? Not everyone is in the accumulation phase.

It's been difficult ever since cash ceased to be an asset in 2009 for savers in that 1-5 year window to know what action to take. Staying fully invested in complete tat that their grandchildren were adamant were the new world order and worked on completely different maths, physics and reasoning than had ever existed for was not immediately obvious as the correct strategy. Many people completely failed to notice that cash was no longer an asset and just a security buffer while many others opted to buy property.

In addition, that transitory phase has also moved to a different location in the life cycle. People may be stopping working at 55 but they aren't dropping dead at 65 any longer but clinging on like barnacles and breaching 80. So there is arguably now a disconnect between stopping being paid a labour income and switching to low risk, capital protecting assets which used to be done at about the same time.

If I were in that transitory phase at present, as an equity chap, I think I'd be looking at a basket of defensives like utilities, pseudo bond equivalents, that sort of thing. Certainly for the next few years. In my mind you want the absolute reverse of FAANG. GNAAF?

[KTF]

leef44 said:

Plus also if you have a portfolio of IM/PH products already then switching to IM Lifestyle will mostly be a rebalance. It's just that you are giving that responsibility to IM to make.

Well, at least, that's how I understand it.

When you switch products you sell down the current holding then buy in again at the current price. So if you are showing a loss, that is crystallised and then you hope that IML will work its magic and you recover it more quickly than in the previous holdings.

I would assume that there is something automated behind the scenes doing the rebalancing once you are in IML rather than an individual person looking at each portfolio in turn on a semi-regular basis and adjusting them accordingly.

I like the concept, but the way things are at the moment, I cant decide if now would be a good time to switch to IML or to sit tight and move to it later.

[2Btoo]

leef44 said:

My guess is that this started off as a platform for clients investing in over £100,000 portfolio. You can imagine most transactions would be at fixed regular monthly intervals with less transactions as one-off lump sums.

Now when they let this mob in (us) and forwent the threshold limit they are now overwhelmed with many small bespoke transactions and have neither the platform nor the resources to manage this level of mob. I may be wrong and I mean no disrepect to the fantastic service we've had to date but it opens up a different business model. It may not be economically feasible to continue like this.

So it makes sense to reduce the number of transactions by increasing the threshold and fixing the intervals.

At the end of the day, the platform is for long term investment and not day trading so with that in mind, it makes sense.

Pretty much my thoughts.

I can't help remembering that I am a very small player being allowed into a game designed for much bigger boys than me. As such, I try to remember to be grateful.

[pingu393]

DonkeyApple said:

If I were in that transitory phase at present, as an equity chap, I think I'd be looking at a basket of defensives like utilities, pseudo bond equivalents, that sort of thing. Certainly for the next few years. In my mind you want the absolute reverse of FAANG. GNAAF?

The trouble is that everything in IM (and I assume, elsewhere), except cash, is dropping. Even JPH is talking about waiting to invest. What happened to "time in the market"?

JulianPH said:

Under my circumstances I will be sitting still and adding more where I think buying is the right thing to be doing.

[Carbon Sasquatch]

pingu393 said:

The trouble is that everything in IM (and I assume, elsewhere), except cash, is dropping. Even JPH is talking about waiting to invest. What happened to "time in the market"?

JulianPH said:

Under my circumstances I will be sitting still and adding more where I think buying is the right thing to be doing.

Subtle, but JPH said where - not when - which to me implies choosing the appropriate investment rather than delaying the investment.... I could be wrong though, just how I read it.

[leef44]

KTF said:

leef44 said:

Plus also if you have a portfolio of IM/PH products already then switching to IM Lifestyle will mostly be a rebalance. It's just that you are giving that responsibility to IM to make.

Well, at least, that's how I understand it.

When you switch products you sell down the current holding then buy in again at the current price. So if you are showing a loss, that is crystallised and then you hope that IML will work its magic and you recover it more quickly than in the previous holdings.

I would assume that there is something automated behind the scenes doing the rebalancing once you are in IML rather than an individual person looking at each portfolio in turn on a semi-regular basis and adjusting them accordingly.

I like the concept, but the way things are at the moment, I cant decide if now would be a good time to switch to IML or to sit tight and move to it later.

Yes I think I am the same as you, would like to get a bit more understanding in the automation.

In terms of crystallising losses, you would be selling out of a portfolio at a low price but then you would be buying back some of those holdings at a low price. Admittedly there will be some losses which stay because you won't have the same holdings but hopefully it is minimised.

[pingu393]

Carbon Sasquatch said:

pingu393 said:

The trouble is that everything in IM (and I assume, elsewhere), except cash, is dropping. Even JPH is talking about waiting to invest. What happened to "time in the market"?

JulianPH said:

Under my circumstances I will be sitting still and adding more where I think buying is the right thing to be doing.

Subtle, but JPH said where - not when - which to me implies choosing the appropriate investment rather than delaying the investment.... I could be wrong though, just how I read it.

True. I missed that. Apologies to JPH.

[Consigliere]

i know past performance isn't an indication of future performance, but generally history repeats itself (to a lesser or greater extent).

As i see it were in trough, maybe heading further south for while but over time it will rise. I think in a decade you'll hear people say they wished they had ploughed in 5/10 years ago after the gains come in. I know i certainly did after PHR.

PHE had amazing figures for the past 10 years, im confident that well see some good gains in the the next 10.

Remember we pay IM to do the tricky bits, no point pulling out on a downward trend unless you absolutely have to.

Up or down its all part of the dance, and you've got to do the dance :-)

[Mr Pointy]

Consigliere said:

i know past performance isn't an indication of future performance, but generally history repeats itself (to a lesser or greater extent).

As i see it were in trough, maybe heading further south for while but over time it will rise. I think in a decade you'll hear people say they wished they had ploughed in 5/10 years ago after the gains come in. I know i certainly did after PHR.

PHE had amazing figures for the past 10 years, im confident that well see some good gains in the the next 10.

Remember we pay IM to do the tricky bits, no point pulling out on a downward trend unless you absolutely have to.

Up or down its all part of the dance, and you've got to do the dance :-)

The 2007 crash wiped out a lot of investors & even 10 years later some of them weren't back to their previous position. What if this is on that scale? 15 years later those who successfully recovered see it as a blip but many don't, & many don't have 15 or even 10 years to recover now.

[Consigliere]

Mr Pointy said:

The 2007 crash wiped out a lot of investors & even 10 years later some of them weren't back to their previous position. What if this is on that scale? 15 years later those who successfully recovered see it as a blip but many don't, & many don't have 15 or even 10 years to recover now.

Cant comment on the scale of any crash until after the event. If you have a small timeframe until you have to cash out and you're invested in a higher risk portfolio, its the gamble you take.

Agreed, this crash/blip will favour those who have a longer term plan however they are invested.

[AdamIM]

Mr Pointy said:

Consigliere said:

i know past performance isn't an indication of future performance, but generally history repeats itself (to a lesser or greater extent).

As i see it were in trough, maybe heading further south for while but over time it will rise. I think in a decade you'll hear people say they wished they had ploughed in 5/10 years ago after the gains come in. I know i certainly did after PHR.

PHE had amazing figures for the past 10 years, im confident that well see some good gains in the the next 10.

Remember we pay IM to do the tricky bits, no point pulling out on a downward trend unless you absolutely have to.

Up or down its all part of the dance, and you've got to do the dance :-)

The 2007 crash wiped out a lot of investors & even 10 years later some of them weren't back to their previous position. What if this is on that scale? 15 years later those who successfully recovered see it as a blip but many don't, & many don't have 15 or even 10 years to recover now.

It is worth pointing out that there will always be individual companies/stocks that are nothing but hype. They have always been a part of the general market and often quoted to illustrate how the market behaved(unfairly). During the 2000 dot come crash the Nasdaq index PE was close to 200. In other words, full of companies that never made a profit and never would. The index PE at its peak in 2020 reached 34 and is currently under 22. One can not in anyway compare the two events as being remotely similar.

If investors get 'wiped out' and that term is open to interpretation, I would define that as lost 80%+. In my mind they were either overly exposed to very high risk securities and or using leverage/derivatives. In other words they were speculating.

Not wanting to cherry pick, but there are many examples of companies that did lose 35-40% between 2007 and early 2009 only to be 10X, 10 years later.

Our mandate being investing in quality over time. There is a modest element allocated to businesses in very fast moving/emerging segments but we absolutely balance this out to mitigate against 'getting wiped out'.

[pingu393]

I don't think anyone invested with IM will get wiped out.

There may be individual companies within particular portfolios that are wiped out, but their demise will be protected by the others.

It's just a case of whether one considers a 25% loss and a 5 year recovery to be a wipe-out.

My particular problem with IM at the moment is that NOWHERE is safe, other than cash. I would expect the most defensive to be in the range +/- 2%, but IM Optimum Defensive has lost 5.62% and IM Index 20 has lost 6.89% in the last 12 months.

Are defensive portfolios usually this volatile?

http://private-client.intelligentmoney.com/perform...

[Simpo Two]

pingu393 said:

I don't think anyone invested with IM will get wiped out.

There may be individual companies within particular portfolios that are wiped out, but their demise will be protected by the others.

It's just a case of whether one considers a 25% loss and a 5 year recovery to be a wipe-out.

My particular problem with IM at the moment is that NOWHERE is safe, other than cash. I would expect the most defensive to be in the range +/- 2%, but IM Optimum Defensive has lost 5.62% and IM Index 20 has lost 6.89% in the last 12 months.

I think that part of an investment strategy should include selling to cash - just as PHR did. I appreciate cash is not much of an investment just now, but there will be times in the ups and downs when it's a good place to be. In fact, if markets are down 20% and cash is only 'down' 10% then that makes cash less of a loss. Which do you prefer, 10% loss or 30% loss?