Pensioncraft: Sell off Half Way?

[JohnW]

Oops, reading failure on my part. Make that about 80% of 3.9%, so 3.1% of global. That seems to forego a lot of diversification benefit for too little home bias advantage.

[tjh290633]

Look how long it took the FTSE100 to return to its high point at the end of 1999. That's the trouble with tracking indices.

The trouble here is perhaps the short-cut of using an index as a proxy for investor returns. With dividends reinvested, the FTSE 100 total return is 116% since 1999 (source: AJ Bell). Certainly a laggard, but not zero return by any means.

Yes, but all that return is down to reinvesting dividends when the index was much lower than now. Avoiding the dot-com shares back then was a much better policy, rather than blindly following the market.

Look at the number of advocates for passive investing, which essentially means investing in trackers.

TJH

[TedSwippet]

The trouble here is perhaps the short-cut of using an index as a proxy for investor returns. With dividends reinvested, the FTSE 100 total return is 116% since 1999 (source: AJ Bell). Certainly a laggard, but not zero return by any means.

Yes, but all that return is down to reinvesting dividends when the index was much lower than now.

Of course it is. You say that like it's something bad. It isn't. It is precisely why total return passive investing gives worthwhile results in both "rising" and "falling" markets.

[CliffEdge]

If I had the brains I would follow the TJH investing strategy which seems the best way. But it's very hard to understand and implement unless you're a genius.

[monabri]

If I had the brains I would follow the TJH investing strategy which seems the best way. But it's very hard to understand and implement unless you're a genius.

I thought HYPTUSS might help?

[tjh290633]

If I had the brains I would follow the TJH investing strategy which seems the best way. But it's very hard to understand and implement unless you're a genius.

I am certainly not a genius. I do follow my own rules which have developed over the last 35 years, but the fundamental key is to invest in companies with yields at least as high as that of the FTSE100 index, from which most will be drawn. I built my portfolio gradually over the years, adding more companies with time. As indicated above, the HYPTUSS provides a convenient way of managing a portfolio and of deciding where to reinvest accumulated dividends. I found out about the turn of the century that my own methods were very similar in share selection to the guidelines for HYP selection.

Might I suggest that a little more reading is required?

TJH

[JohnW]

If I had the brains I would follow the TJH investing strategy which seems the best way. But it's very hard to understand and implement unless you're a genius.

Sadly, that makes it no use to the great majority of us who might need to be satisfied with getting market returns less costs.
After being discussed for years on a well known public internet forum you might imagine a clever aspiring fund manager looking for the best way might have picked it up and be able to offer us a fund using the strategy.

[GeoffF100]

Look how long it took the FTSE100 to return to its high point at the end of 1999. That's the trouble with tracking indices.

The trouble here is perhaps the short-cut of using an index as a proxy for investor returns. With dividends reinvested, the FTSE 100 total return is 116% since 1999 (source: AJ Bell). Certainly a laggard, but not zero return by any means.

Yes, but all that return is down to reinvesting dividends when the index was much lower than now. Avoiding the dot-com shares back then was a much better policy, rather than blindly following the market.

Look at the number of advocates for passive investing, which essentially means investing in trackers.

We have done very well out of it too. Much better than we would have done if we had bet all our money on the FTSE 100. For every dollar that beats the world index, there is another dollar that trails it.

[AWOL]

Will the stock market be higher in eleven years time than it is now?

We don't know. We do know that the yield curve inverted yesterday and CAPE is 1.1 standard deviations above trend. Let us hope it isn't like the US market from 1803-1871 https://www.researchaffiliates.com/Our% ... egend.aspx

My current strategy involves crossing my fingers while sitting on my hands.