Passive Investment Archives - Financial Planning in Surrey

Figures and Ships that Pass in the Night

2006: Cargo – Clive Gordon

Financial Planning done well, takes a long-term perspective, however it is within the context of the short-term. I have now added the figures for what happened in January across global markets. As an Independent Financial Adviser it is important that we remain mindful of the current economic climate globally. In January the FTSE100 rose 2.1%, the largest gains were made in China and the Emerging Markets. The Baltic Dry index fell 60% in January which is an indication that demand for global shipping halved (and some) which of course eventually filters through to imports and exports, although clearly impacting differently across nations. The thing about huge cargo ships is that they take a very long time to turn and require an excellent captain. We all witnessed what can happen when a Captain gets this wrong in January. However one of the other lessons that a cargo ship might also offer is that small adjustments along the way lead to successfully reaching the desired destination, much like a good financial plan, which should be regularly reviewed to ensure that it is on track and adjusted to correct the course, making allowances for “choppy conditions”. Other than the Baltic Dry Index, the world markets had a pretty good January 2012.

We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
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Figures and Ships that Pass in the NightDominic2017-01-06T14:40:09+00:00

New Ethical Funds

Historically ethical or Socially Responsible Investment (SRI) funds have been fairly pricey due to all the extra work that the Fund Managers have to do in terms of research and having stock lists approved. Vanguard have just launched two new SRI funds that buck this trend and combine a passive investment strategy. The funds launched yesterday – though perhaps launching them last week during National Ethical Investment Week might have been a more productive idea in terms of added PR and newsworthiness. Anyway, the two funds SRI European Stock Fund and SRI Global Stock Fund, both have a minimum investment of £100,000 and very low charges of 0.35% and 0.40% respectively.

It will be interesting to see how quickly the funds gather support which will probably reduce the minimum investment requirements. Vanguard is one of the biggest index tracking / passive investment Houses in the world with $1.7trillion in assets, starting life in 1975 and launching a tracker fund in 1976 (500 Index Fund). Vanguard is reasonably new to the UK, launching here in June 2009. This is a company that is serious about challenging the status quo of investing.

DT

We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
Call us today or visit our website for more information and to arrange a meeting

New Ethical FundsDominic2023-12-01T12:48:54+00:00

Its not just Fantasy Football but fantasy Funds too

I know, I know.. football is about as overexposed as it gets. Yesterday saw the end of the “transfer” window. This is the biennial shuffling of cards that seems to amuse oligarchs as much today as it did in the playground swap market. All that really happens is that a lot of agents make a lot of money by getting hapless footballers to switch teams, hopefully to get a better chance of playing for more money. The slight twist being that some will now consider moving to a lesser team in order to play more frequently, but perhaps not as well paid but compensated by the increased visibility and revenue from other “endorsements”. Amusing in some respects as Managers reverse opinions and decisions that they were holding as fact just days earlier.

It was with interest then that I came across an article in my quality trade press by Paul Farrow. He was berating the Fund Management industry for failing to heed its own advice – to stay true to core principles and the long-term strategy. He points out that for almost every new fund launch another is closed. He states that since 1999 2,660 funds were launched and 2,486 were closed. As a result, invariably the duff funds (or “poorly perfoming” funds) are regularly taken out of the statistics, which in turn hides the real story of massive under performance of the market. As a result the “league tables” or rather performance tables are highly inaccurate and should not be relied upon. Add to this the comings and goings of Fund Managers, mergers of Investment Houses and you quickly get a sense that perhaps the investment industry does just as much shuffling of the pack as the football business. However rather than farming out an under performing striker to lesser divisions they simply get discarded to non-league and non-statistic status.

This explains why Fund Management groups have a reasonably large marketing budget. It would certainly be a full time job trying to massage data to show a poor fund in a good light, making it appear difficult to select anything else. Yet selecting the right Fund Manager is a process that is riddled with problems, so much so that to pick the winning team in say 10, 20 or 30 years time is about as pointless a task as gluing the leaves back onto trees in the hope of delaying Autumn. This merely adds to my conviction that in practice selecting the best Fund Manager is not possible consistently and why we use cheaper funds that track the market, providing a market return less costs. This is something that over the long-term the overwhelming majority of Fund Managers fail to achieve. You may find the document on my website a helpful resource in this regard. In truth, I have no idea who the next “Anthony Bolton” will be any more than I know who will be the next Alex Ferguson.

We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
Call us today or visit our website for more information and to arrange a meeting

Its not just Fantasy Football but fantasy Funds tooDominic2023-12-01T12:49:14+00:00