Investment & Investing

Basically why vanguard is so popular now isn't it - think people have wisened up to that being the case!

Still doesn't stop me from being tempted to tweak things....

yeah, for blue chip mega cap stuff it's so tough to beat, even for the pros, that it's not worth the risk. There are pockets (regional deep value being one of them) where the right manager with the right skillset can be successful, but they are few and far between and being able to pick that manager out from the crowd is tricky.

His argument was that it did pay to be active, and his record backed this up, just not as active as his employer and his investors think he needs to be.

I find the piggyback argument interesting - the passive stuff only works because there are actives out there doing the work that results in price discovery etc. How sustainable is that if more and more people go passive?

Recently read a book called Reset which has a big section on investing to achieve financial independence. He goes into great detail about tracker funds/Vanguard ETFs being the best bet for pay in and forget investment. I pulled out almost all my investments today and will just dump everything in a few selected ETFs come April - topping up every month. I'll leave myself 5% to play about with every month on crypto/stonks.

How sustainable is that if more and more people go passive?

I'm no expert but from what I've heard/read over the years, it isn't, there's a tipping point.

Thanks, might give that a read. It's interesting from a psychology / behavioural finance perspective that for most things in life humans are generally anchored by inertia. Not so when it comes to investing... must. do. something!

I'm going to hold a decent chunk of cash somewhere for 12m - wanting a pretty low risk. Best options?

Premium Bonds?

No risk, Marcus savings account paying a mighty 0.5%.

What was the old saying - the most successful investors are already dead, so never touched their portfolio.

Time in the market something something timing the market. I think where you get the most gain with managed funds is emerging market and special sit type funds where unique insights and knowhow can provide value beyond what the rest of the market can easily recognise.

A couple of other points spring to mind, 1. not losing money is usually more important than making it, 2. depending who it is you can also have compliance issues if a stock, or group of stocks in one sector, grow so much to unbalance the portfolio.

Still very interesting.

1. not losing money is usually more important than making it
   

Now, where have I heard that before... "Rule No. 1: Never lose money. Rule No. 2: Never forget rule No. 1."

Classic example of your second point being Tesla, it's stratospheric growth has caused many funds to to either re-think their single name and/or sector limits or regularly trim and take profits. And in the case of Baillie Gifford it's a massively outsized exposure to one name for the firm, I'm sure their chief risk dude has been having kittens over that.

yup pretty sure this is the answer

You don't alway have to be too active in an active fund.
I forget which fund or Trust (maybe Lindsell Train?) it is but they are a top performer and I think on average the FM only sold one or two of his stock every year

How come Baille Gifford specifically have ended up with outsized exposure? Do they have an "electric cars" fund?

https://youtu.be/2aiSmi7p-30

Interview from 5 months ago, but still looking towards the long term with Tesla.

Baillie Gifford, unlike a lot of their peers, are almost exclusively an equity shop, they have very little in the way of fixed income assets. If you look at the breakdown below almost three quarters of their assets are in Global/International equities. The vast majority of these assets will be benchmarked against a Global/Int. benchmark, of which Tesla is a constituent and a large constituent at that. Lots of Global/Int. equities under management and a strong conviction on Tesla means you end up having A LOT of Tesla across the firm, both in their various funds and portfolios for institutional clients.

EDIT: Not shitting on Baillie Gifford in any way, just stating the obvious.

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Makes sense, thanks for the break down. I read they had made a big tesla sell lately.

BG definitely the hip managers of the moment 😎

Anyone use St James's Place?

I've had money with them by virtue of an (ex) workplace pension from 20 years ago, and more recently been sticking savings in an ISA as well as monthly pension contributions.

While I've not actually compared them against any competition I've always been very pleased with the performance, but have recently been reading rather negative stuff in both that respect and in terms of excessive fees. Had an annual review yesterday where my 'adviser' was suggesting partial transfer of my current workplace pension (Scots Widows) to SJP, but I'm feeling reluctant to put all my eggs in one basket (despite him selling the SJP funds as more diversified than SW).

Not particularly keen on taking more of a hands-on approach to this stuff, but wondering if I should talk to an IFA. Anyone have recommendations?

Guy in my cycling club is an associate partner at St. James place - knows his stuff and is very straight talking. Happy to put you in touch with him if that would at all help your situation; I am sure he would be very welcoming

I'm interested to know a bit more about Baillie Gifford. Take out the big drop at the beginning of Covid which hit everyone, if you look at their 5-year performance, they have a very smooth, straight line of growth. They typically weather the troughs quite well with not too much of a drop each time where other funds get hit worse. Then the peaks are slightly lower too, where other funds peak higher.

Their day-to-day price is much less spiky too. I've noticed other funds day-to-day price can fluctuate quite a lot, which makes it a bit tricky to time your entry or exit without accidentally paying over the odds or selling accidentally low. I did this a couple of years ago with an iShares emerging fund and what I learned was that if you wanted to add (or remove) money regularly, you had to watch it all the time else you might accidentally pay way over the odds. This happened to me and it took around 2 years for that bit of the investment to catch up. It seems like this is much less likely to happen with Baillie Gifford and that the growth is much more consistent.

Thanks. I don't doubt his character but he might not offer the independent advice I'm after.

Can't shed much light here I'm afraid, I've never worked for them or know more than any other outsider might. What I can say is that when it comes to global/int growth equity strategies, they certainly seem to be the preferred manager of many institutional investors in UK and Europe so they must be doing something right.

GME- is up 105%...

Possibly linked to CFO resigning, and GameStop retaining an executive talent firm to find a replacement that can help change the strategic mindset in the boardroom.

I think the main reason is we like the stock