Recommendations for S&S ISA

[Kritika]

14 hours ago, vand said:

Those are some outrageous fees.

I've just listened to Tony Robbins' (audio) book "Unshakable", and he rather convincingly makes the case against expensive active funds and the fees they have.

As you probably know, most funds don't even beat the market over a 5 yr timeframe, so why pay a big fee for almost guaranteed underperformance?

The dual effect of poor performance and high fees compounded over 20-30 years will be staggering.

I think there is room in the strategy for at least some of that to go into a low cost market tracker fund... I've heard Vanguard funds are well regarded as some of the cheapest market trackers.

 

That said... I also have selected active funds for my pension, so I probably need to take my own advice.

@vand You are right, some (but not all) of those fees are staggering.😳

But I realy can’t find any proof in the performance of those very funds to give me any doubt about their future performance. And yes - I know past performance has got absolutely zero bearing on what any fund will do in the future, but the funds I’ve selected have put in between  95%- 135% growth ovrt the last 5 years, (hence the high fees) and they have achieved that despite the negative market turn down over the last year.

I hear what you say regards to the Vangsrd Trackers, would you class this fund as one of those?

VANGUARD LIFESTRATEGY 80% EQUITY ACCUMULATION - 0.77% pa

[vand]

6 hours ago, Kritika said:

@vand You are right, some (but not all) of those fees are staggering.😳

But I realy can’t find any proof in the performance of those very funds to give me any doubt about their future performance. And yes - I know past performance has got absolutely zero bearing on what any fund will do in the future, but the funds I’ve selected have put in between  95%- 135% growth ovrt the last 5 years, (hence the high fees) and they have achieved that despite the negative market turn down over the last year.

I hear what you say regards to the Vangsrd Trackers, would you class this fund as one of those?

VANGUARD LIFESTRATEGY 80% EQUITY ACCUMULATION - 0.77% pa

.77% isn't too bad for an active fund, but it's expensive compared to true low cost tracker fees.  Cheap is <0.2%. eg, their FTSE100 tracker is 0.06%.

https://www.vanguardinvestor.co.uk/what-we-offer/index-active-products

Think of it in terms of paying 150k for a Honda Civic just because you didn't shop around.

 

Studies show that the VAST majority funds outperform over 5 years tend to means revert, underperforming in the following period, and the opposite is also true, so imo you would be better off picking funds that have underperformed. This is simply because the cyclical nature of stocks. The number of Fund that manage continual outperformance over time are absolutely miniscule.

 

https://www.tonyrobbins.com/wealth-lifestyle/5-costly-investing-mistakes/

 

"96% of active funds do not beat the market over a 15 year span"

Robbins uses the analogy that your odds of choosing a good fund are roughly half the odds you have if you are playing Blackjack, and you are dealt 20, yet you still choose hit, hoping to hit 21... 

[vand]

Just to contradict everything I previously posted, there is also a good case to be made AGAINST passive funds, which I think is well worth mulling over.  Over the last decade everyone has deserted active funds and piled into passive funds, on advice of people like Tony Robbins and Warren Buffett himself.  It's a very crowded trade now, and it may be that we are now in a passive fund bubble, everyone chasing the "guaranteed 7% return on stocks".  It's no surprise that at the top of a bull market everyone is touting passive investing as a risk-free way to capture historic market returns even when that market has become grossly overvalued. How it will play out when the correction comes will be fascinating.

My personal opinion is that sector and asset allocation is as important as it has ever been. Be overweight in cheap sectors, and underweight expensive ones.

[vand]

Probably no surprise but VOD has announced a 40% cut to its dividend. It's plumbing a new decade low.

Contrarian play here. I've picked a few up at 131p. Accumulate over the next 2-3 years and sit on them for the following decade, collect the dividend and ride the recovery to triple your money.

 

[Bullionaire]

Glad I never touched vodaphone. I try to avoid companies drowning in debt. I was tempted to pick up some more bt on their recent dip though.

 

One of my stocks, ab dynamics is on an incredible run. Up 51% since I bought it a few months ago. Wondering whether to skim some profit off. 

[vand]

yeah, a lot of the high div value stocks I'm watching are getting battered. BT, ITV, BARC etc. I think I will expanding my income portfolio quite a bit in the next few months.

 

[AuricGoldfinger]

On 02/01/2019 at 11:48, h103efa said:

What I have done recently is moved a lot of my s&s isa into fixed interest funds. Really to protect the really good growth I've had these past 6 years or so. But this is because I see a downturn in the next year or so and also I intend to liquidate a good amount to pay for an extension on the house and I wanted to lock in that growth. This is my own personal scenario! 

Very wise move in hindsight I'm sure! kudos to you..