Old person investment fund
Discussion
I have an elderly friend who plays the markets via Hargreaves Landsdown on execution basis ( I think he does it within the parameters of an ISA for tax purposes )
Historically when markets have had an upward trend he has done well and usually pulls about £15 - 20k a year making a few large bets to the value of £100k, moving his stop losses accordingly and when momentum of the bet loses speed pulls and starts again.
Over the last year and half the market shifts have been substantial to say the least so his stop loss/ trend betting is proving fruitless.
Is there a reputable fund that he can invest in that does the work for him while giving him a decent return within a tax friendly enviroment where the management fees don't swallow all the cream?
Thanks in advance to you all
Historically when markets have had an upward trend he has done well and usually pulls about £15 - 20k a year making a few large bets to the value of £100k, moving his stop losses accordingly and when momentum of the bet loses speed pulls and starts again.
Over the last year and half the market shifts have been substantial to say the least so his stop loss/ trend betting is proving fruitless.
Is there a reputable fund that he can invest in that does the work for him while giving him a decent return within a tax friendly enviroment where the management fees don't swallow all the cream?
Thanks in advance to you all
Can't say I fully understand what your friend has been doing. At first sight, it sounds like some form of DIY trend-following/momentum strategy (momentum being one of the three main broad 'factor' strategies, the others being quality and value). However, the past 18 months would surely have been great for a momentum strategy so I don't understand why your friend is being stopped out?
There are several momentum-based ETFs, eg from iShares and Xtrackers, which should be available on typical UK platforms. They look to have a high risk rating though. Perhaps because ''a trend is a trend until it comes to an end''! Meb Faber of Cambria, whose podcasts I listen to, is a great believer in trend-following but I doubt his ETFs are available on UK platforms. Also I suspect an out and out trend follower will jump onto any strong trend, eg commodities, bonds, currencies as well as equities. Or perhaps allocate fixed %s to each main market then seek trends with each. I don't know if there re many multi-asset trend following ETFs in the UK.
There are several momentum-based ETFs, eg from iShares and Xtrackers, which should be available on typical UK platforms. They look to have a high risk rating though. Perhaps because ''a trend is a trend until it comes to an end''! Meb Faber of Cambria, whose podcasts I listen to, is a great believer in trend-following but I doubt his ETFs are available on UK platforms. Also I suspect an out and out trend follower will jump onto any strong trend, eg commodities, bonds, currencies as well as equities. Or perhaps allocate fixed %s to each main market then seek trends with each. I don't know if there re many multi-asset trend following ETFs in the UK.
millen said:
Can't say I fully understand what your friend has been doing. At first sight, it sounds like some form of DIY trend-following/momentum strategy (momentum being one of the three main broad 'factor' strategies, the others being quality and value). However, the past 18 months would surely have been great for a momentum strategy so I don't understand why your friend is being stopped out?
There are several momentum-based ETFs, eg from iShares and Xtrackers, which should be available on typical UK platforms. They look to have a high risk rating though. Perhaps because ''a trend is a trend until it comes to an end''! Meb Faber of Cambria, whose podcasts I listen to, is a great believer in trend-following but I doubt his ETFs are available on UK platforms. Also I suspect an out and out trend follower will jump onto any strong trend, eg commodities, bonds, currencies as well as equities. Or perhaps allocate fixed %s to each main market then seek trends with each. I don't know if there re many multi-asset trend following ETFs in the UK.
I'm just guessing why he is getting sold out is a combo of his stop losses being to tight and some days the swing in a market with after hours deals can dip a price very quickly but thank you for your input and shall take a look at ishares and xtrackers and pass them on; thank youThere are several momentum-based ETFs, eg from iShares and Xtrackers, which should be available on typical UK platforms. They look to have a high risk rating though. Perhaps because ''a trend is a trend until it comes to an end''! Meb Faber of Cambria, whose podcasts I listen to, is a great believer in trend-following but I doubt his ETFs are available on UK platforms. Also I suspect an out and out trend follower will jump onto any strong trend, eg commodities, bonds, currencies as well as equities. Or perhaps allocate fixed %s to each main market then seek trends with each. I don't know if there re many multi-asset trend following ETFs in the UK.
It's possible he enjoys the action.
Just because one becomes elderly, retired or both does not mean you have to stop investing, considering retirement can be thirty years, so there is still a need to beat inflation by a few points.
Main difference is the need to maintain a higher cash portion. I keep three years.
Just because one becomes elderly, retired or both does not mean you have to stop investing, considering retirement can be thirty years, so there is still a need to beat inflation by a few points.
Main difference is the need to maintain a higher cash portion. I keep three years.
jeff m said:
It's possible he enjoys the action.
Just because one becomes elderly, retired or both does not mean you have to stop investing, considering retirement can be thirty years, so there is still a need to beat inflation by a few points.
Main difference is the need to maintain a higher cash portion. I keep three years.
I too picked up on the 'old person' bit. Received wisdom says that the older you get the less risk you should take - but if he has pots of money and is simply playing with the spare then why the heck not. At the very least it gives him an interest and keeps his brain active.Just because one becomes elderly, retired or both does not mean you have to stop investing, considering retirement can be thirty years, so there is still a need to beat inflation by a few points.
Main difference is the need to maintain a higher cash portion. I keep three years.
mgsontour said:
Over the last year and half the market shifts have been substantial to say the least so his stop loss/ trend betting is proving fruitless.
It just means the trends have been shorter so you had to move faster.mgsontour said:
Is there a reputable fund that he can invest in that does the work for him while giving him a decent return within a tax friendly enviroment where the management fees don't swallow all the cream?
The funds that can exploit these trends successfully are likely to be computer-driven real-time trading, run by egg heads and closed to external investment. However, I've no doubt there are lots of offerings out there claiming to be able to deliver what he is after 
Derek Chevalier said:
The funds that can exploit these trends successfully are likely to be computer-driven real-time trading, run by egg heads and closed to external investment. However, I've no doubt there are lots of offerings out there claiming to be able to deliver what he is after
Thanks and he has seen those offering such platforms, however, I talked him out of it by saying does he really need that sort of exposure; he agreed.My ideal scenario for him would be to chase less income and use capital to make up the difference given his age but he insists he wants some fun; which I have to agree
You won't find the Cambria ETF's on any mainstream UK platform.
There are leveraged ETFs but they tend to focus on indices v individual shares.
I'm not entirely clear why he wouldn't just use a regular fund or investment trust or if he wants the buzz of trading just keep doing what he's doing.
There are leveraged ETFs but they tend to focus on indices v individual shares.
I'm not entirely clear why he wouldn't just use a regular fund or investment trust or if he wants the buzz of trading just keep doing what he's doing.
mgsontour said:
Derek Chevalier said:
The funds that can exploit these trends successfully are likely to be computer-driven real-time trading, run by egg heads and closed to external investment. However, I've no doubt there are lots of offerings out there claiming to be able to deliver what he is after
Thanks and he has seen those offering such platforms, however, I talked him out of it by saying does he really need that sort of exposure; he agreed.My ideal scenario for him would be to chase less income and use capital to make up the difference given his age but he insists he wants some fun; which I have to agree
OK, lets assume the guy is not an idiot, most with high six figures aren't. Let's also assume he isn't out every night knocking back Mojitos and chasing women and he is free & clear of debt.
This isnt' that difficult, 600K in equity, 100K cash (total return system) the 600K on a 4% draw down will give him 2K a Month and he can still have his play money.. Based on a 7% return
Forget trying to get income from equity, go for two or three low exp index funds Europe UK and US. Take just enough Cap gains from the Index funds each year to replenish the 100K cash from which the the 2K is taken each Month. Very tax efficient., very little taxable income and cap gains can be managed
The 100K cash give protection from market corrections. if the market tanks, hold off replenishing the cash. You have 3 clear years for a recovery.
This isnt' that difficult, 600K in equity, 100K cash (total return system) the 600K on a 4% draw down will give him 2K a Month and he can still have his play money.. Based on a 7% return
Forget trying to get income from equity, go for two or three low exp index funds Europe UK and US. Take just enough Cap gains from the Index funds each year to replenish the 100K cash from which the the 2K is taken each Month. Very tax efficient., very little taxable income and cap gains can be managed
The 100K cash give protection from market corrections. if the market tanks, hold off replenishing the cash. You have 3 clear years for a recovery.Gassing Station | Finance | Top of Page | What's New | My Stuff