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Bets value/performance fund

Discussion in 'Managed Funds & Index Funds' started by ef_paddy, 5th Aug, 2009.

  1. ef_paddy

    ef_paddy New Member

    Joined:
    5th Aug, 2009
    Posts:
    2
    Location:
    Sydney
    Hi Guys,

    I'm after some help. I'm 21 and have saved a few grand. I'm wondering if you guys could recommend a fund that would be good to go with?

    I have researched it for a little while now but haven't really gotten very far so figured i'd ask people who are knowledgeable in the area.

    Look forward to your responses.
     
  2. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Location:
    Sydney, Australia
    What is your goal for this money? What is your timeframe for the investment?
     
  3. ef_paddy

    ef_paddy New Member

    Joined:
    5th Aug, 2009
    Posts:
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    Location:
    Sydney
    Hi Sim,

    Thanks for the reply. I'm basically just trying to get a decent return from it. Ideally i want to keep the money invested long term, I'm going to be putting $200 a fortnight towards where ever i put my money, however in the next 3 years it may have to be used as part of a home deposit but hopefully not.

    Cheers,

    Pat
     
  4. Johny_come_lately

    Johny_come_lately Well-Known Member

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    1st Jul, 2009
    Posts:
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    Location:
    SE Queensland
    Hi ef_paddy

    Good on you for starting your quest at age 21! All I did at that age was spend money.

    You have a few grand. You can get a term deposit or a retail managed fund.

    You have to decide what time frame you wish to invest. It would be foolish to invest in a product that requires time, then withdraw for a deposit.

    Read Compleks:cool: 2007 threads. Brilliant!

    go to the managed funds forum

    chose a financial product that allows regular deposits.

    MANAGED FUNDS ALLOCATIONS

    Large Cap Aussie
    Growth
    Value

    Mid Cap Aussie
    Growth
    Value

    Small Cap Aussie
    Growth
    Value

    Large/mid/small foreign(Growth,value)

    property trusts

    Licensed invesment companies

    Resources

    Financials

    Consumer discretionary

    Technology

    Medical

    Emerging markets

    Exchange traded funds

    index funds

    fixed interest

    cash

    bonds

    gobal funds


    Is that enough?

    If you want short term you wouldn't pick index funds, and if you want long term you wouldn't pick cash....So do some reasearch, and narrow down what are your goals and we can go from there.


    Cheers Johny
     
  5. APerry

    APerry Active Member

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    Location:
    Melbourne
    You'd probably want to explain this statement considering that for the last 10 years you would have been better off in cash and the recent months far better off in index funds.
     
  6. Johny_come_lately

    Johny_come_lately Well-Known Member

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    Location:
    SE Queensland
    Risk & Return

    Credit risk: a company might fail. ei ABC

    Low diversification risk: loss of value from credit risk

    Market risk: volatility in the market. ei prices can go down and up

    Mismatch risk: choosing a product that has the wrong timeframe for your personal goals.


    Different asset classes have different market risks. Traditionally over a long time frame(100 years), cash provide a low return and low risk while geared, emerging, foreign, small cap, growth funds provide high returns and high risk.

    And once a century we get bowled a wobbly, with cash not LOSING as much as shares. You take your risk and you get your return.



    Johny.
     
  7. APerry

    APerry Active Member

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    Location:
    Melbourne
    The statements that are frequently made by financial advisors regarding expected growth and risk levels have been shown to be a fallacy, or irrelevant at best. People don't invest for 10 years and it is quite clear that shares (the indicies) have been a very poor inverstment over the past 10 years, they might be great for the next few years or they might not. Growth over 100 years is particularly irrelevant as there have been some fairlly large changes in the world over this time.

    What should people do then? I don't know, but I do know that the statistics that are used to indicate indicative growth and risk are BS.
     
  8. Johny_come_lately

    Johny_come_lately Well-Known Member

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    Are there any stats. guys out there that would validate this assumption?



    Johny.
     
  9. APerry

    APerry Active Member

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    Posts:
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    Location:
    Melbourne
    In Jan 1990 the all ords was at 2847.2 this morning it is at 4345, that is a 53% gain in a period of over 10 years. Very, very ordinary. Worse still, if you invested in an All Ords tracking fund in Aug 2005 you would have lost money.

    In contrast, if you invested in March this year you would be up over 30%.

    The point is not that shares arte a good or bad investment, it is that you can't trust statistics, especially if you don't have a good understanding of their background. Even if you do, it is quite clear that past performance is not always a good indicator of future performance. This is frequentlty stated by investment professionals, who then happily go and sprout off that shares grow faster than cash. It is all crap, sometimes they do, sometimes they don't.

    For most people 10 years would be considered a long term investment period. The fact is that over the last 10 the index has been a poor investment, but it has been good recently.

    The point is people should make their own informed decisions, not be sheep and blindly follow garbage statistics.