The stockmarket - it beats me!

[srebbe64]

I'm not normally too bothered by the stockmarket heart monitor, but in recent years I've stuffed quite a lot into a pension, the value of which I can track - and it tends to mirror the FTSE. As such, I now tend to keep half an eye on it. It's so weird the way it works. There seems to be no logic to it.

One of my neighbours is a fund mananger and I wind him up quite a lot. When his portfolio is doing well he assures me it's entirely due to his shrewd investment nouse. However, when it's all gone to pot (like in recent weeks) he says it's due to 'the markets'. In my view he can't have it both ways.

Edited by srebbe64 on Friday 14th March 12:12

[GarrettMacD]

Two professors in the states did a thesis on copying, exactly, what Warren Buffet invested in.

On average, he beats the market by 17% per year.

I forget the exact figure, but it was somthing like... If you had invested $5000 in Berkshire Hathaway in 1968 you'd now be sitting on $5m...

Moral of the story - ignore brokers and fund managers. Invest in exactly the same stocks as Buffet, save yourself the broker commission, live the high life, and watch out for those frozen concentrated orange juices and pork bellies, a la Trading Places

[clubsport]

I don't know if you saw Buffets latest results and market run down..he did not anticipate such attractive returns going forward....The annual BH report is one of the easier to read without actually nodding off

http://www.berkshirehathaway.com/reports.html

[johnfm]

What a fantastic read that Berkshire report is. Warren Buffet's comment on US property is priceless:

"you only see who's swimming in the nude when the tide goes out.." or words o that effect.

Brilliant

[clubsport]

Apart from being the richest man on the planet Mr B would appear to be an amusing fellow......
I recall in one of the annual revues a few years ago, it was coming up to a significant wedding anniversary, so he explained to the shareholders that although he had recently bought a chain of jewellery shops for the portfolio, this wasn't just so he could get a decent discount on his wifes present!

[Brown and Boris]

I have confinedf myself to cehcking values no more than once a week and I am trying to get it to once a month. TV commentators saying 8it was the most unstable period in a generation didn't make me feel any better. I just keep telling myself that I put it there for the long term (5-15 years) and in the long term it can't go down....can it?

[2something]

There is a big difference between

1) It can't go down over the long term
and
2) It hasn't yet gone down over the long term

Though as a slight aside the Nikkei has gone down in the quite long (obviously how do you define long) term ...

[J_S_G]

Can it go down in the long term? Yes. Will it go down in the long term? Who knows. Historic data would say no, but the world IS a slightly different place at the moment.

Question is - so what? What would you do differently if it the FTSE were to slump to, say, 3000 and stay there for the next 10 years? And, if you did whatever you were going to do in those circumstances, and the FTSE is at 10,000 in 10 years, what is the impact of that?

If the answer is "nothing", then stop paying any attention and get on with life. If there is something, there's a different question to ask...

Edited by J_S_G on Tuesday 18th March 02:44

Edited by J_S_G on Tuesday 18th March 12:17

[shadowninja]

Brown and Boris said:

I just keep telling myself that I put it there for the long term (5-15 years) and in the long term it can't go down....can it?

Snag is, in the next 5 to 15 years it could go down, then back up, and your shares are worth the same after the dip... and then we have another recession.

[shadowninja]

srebbe64 said:

However, when it's all gone to pot (like in recent weeks) he says it's due to 'the markets'. In my view he can't have it both ways.

Newbies who play the stockmarket always blame the market when they're losing...

It's a bit like the property boom. Any fool can make a killing in a rising market. It's the professionals who can make a killing when everyone else is sh*tting themselves. As I've said before, you could make big bucks in property by buying a house in 1995, taking a big dump in every room in 2007 and selling it. Try doing that now.

Edited by shadowninja on Tuesday 18th March 09:07

[srebbe64]

shadowninja said:

Brown and Boris said:

I just keep telling myself that I put it there for the long term (5-15 years) and in the long term it can't go down....can it?

Snag is, in the next 5 to 15 years it could go down, then back up, and your shares are worth the same after the dip... and then we have another recession.

My own view is that my pension would need to go down (and stay down) a hell of a lot for it not to be Tax efficient. Even if it went down by, say, 20% over the long term, the fact that that I've paid no Tax whatsoever on that aspect of my earnings means I'm probably still ahead of the game.

[davy9449]

Diversing slightly, I invested quite a lot into ISAs towards the back end of last year - I now know this was a mistake, not just because we invested then, but because it was lump sums into a diverse range of different funds and we didn't 'pool' the money in over the financial year. If my FA had advised this then we would have done so, it could have saved me well over a grand so far.

So my quandry is, do we continue to invest in the next financial year as the markets are dropping?
Or
Keep our cash in a savings account for the short term to see what happens averting further risk, but potentially missing out on the opportunity of 'bargains'??

Also, the money we have invested, if any of the funds manage to rise a bit soon and break even ( a couple already had in the past few weeks but have slipped again) should we cut our losses and then re-invest when that particular fund slides again to try and offset the damage, or just leave it as it is and hope for the best. We have invested for the mid-long term anyway, just annoys me to think that we could have had a better head start if we waited a few months.

PS. Most if the money is equity from the house that could be put back into it at any time!

[srebbe64]

haworthlloyd1 said:

the markets may well go down further, however, to quote the worlds richest man and in my opinion one of the shrewdest businessmen in the world "be fearful when others are greedy, be greedy when others are fearful"

it will be hard to pick the bottom of the market, but investing regularly will ensure you don't have to time the market.


HTH

Isn't he the bloke who said "it's not until the tide goes out that you find out who's wearing a swimming costume!" That's so true!!!

[dcb]

coyft said:

So if you have a pension pot of say £1,250,000, you take £250k at retirement, when you die the government take £820,000 leaving your beneficiaries with just £180,000.

Which is why it is important to make sure that when you die
you leave less than the limit for inheritance tax.

In other words, you came into the world with nothing,
it's important to go out with (almost) nothing.

Keep spending - otherwise UK Gov will waste it
for you.

Doing things like selling your house at retirement
and then renting seem entirely prudent, to cash in
on the property prices.

[Simpo Two]

GarrettMacD said:

Moral of the story - ignore brokers and fund managers. Invest in exactly the same stocks as Buffet, save yourself the broker commission, live the high life, and watch out for those frozen concentrated orange juices and pork bellies, a la Trading Places

Th eproblem is that if everybody copies him (assuming you can get the same information and trade at the same time) then it will go tits up. Wherever the herd goes, the money leaves.

[Simpo Two]

dcb said:

Doing things like selling your house at retirement and then renting seem entirely prudent, to cash in on the property prices.

Or equity release?

But basically I agree - shrouds don't have pockets and if you die in debt, you win

[johnfm]

Simpo Two said:

GarrettMacD said:

Moral of the story - ignore brokers and fund managers. Invest in exactly the same stocks as Buffet, save yourself the broker commission, live the high life, and watch out for those frozen concentrated orange juices and pork bellies, a la Trading Places

Th eproblem is that if everybody copies him (assuming you can get the same information and trade at the same time) then it will go tits up. Wherever the herd goes, the money leaves.

Which is why I think the boat has left the harbour on gold and soft commodities.

[NoelWatson]

shadowninja said:

srebbe64 said:

However, when it's all gone to pot (like in recent weeks) he says it's due to 'the markets'. In my view he can't have it both ways.

Newbies who play the stockmarket always blame the market when they're losing...

It's a bit like the property boom. Any fool can make a killing in a rising market. It's the professionals who can make a killing when everyone else is sh*tting themselves. As I've said before, you could make big bucks in property by buying a house in 1995, taking a big dump in every room in 2007 and selling it. Try doing that now.

Edited by shadowninja on Tuesday 18th March 09:07

I would suggest that the professional fund mananger won't outperform the index during a downturn - they will lose money just like the average punter

[srebbe64]

dcb said:

coyft said:

So if you have a pension pot of say £1,250,000, you take £250k at retirement, when you die the government take £820,000 leaving your beneficiaries with just £180,000.

Which is why it is important to make sure that when you die
you leave less than the limit for inheritance tax.

In other words, you came into the world with nothing,
it's important to go out with (almost) nothing.

Keep spending - otherwise UK Gov will waste it
for you.

Doing things like selling your house at retirement
and then renting seem entirely prudent, to cash in
on the property prices.

Plus if you've been responsible by saving etc.. then you'll have to pay for your own nursing care in old age. If, however, you've squandered your cash on fast cars and gambling then the state will pay for your care. Pathetic, but there you have it!!!