Managed Funds buying units when they've dropped in price: a good idea?

I would analyse market - not managed fund.

 

Thanks guys, all your comments are appreciated as it feels a bit like buyers remorse to me.

Sim, you mentioned:

As for me, i think CFS have done a great job with the global resources fund... but of course that's been made a lot easier with the resource sector booming during this period. I'd like to think the sector still has some legs left in it (China & India), hence my thoughts on putting a bit more $ into it.

BladeCA, thanks for sharing. I also think this is a good fund and will most likely put some more into it in the near future, maybe about $5k in $500 lots to average my buy in price.

Tropo, you mentioned that averaging down is the worst idea but i still think it's a good fund and one i'd like to build up units in. To be honest, i'm hopeless with shares and feel that a MF is the best way for me to invest in the market without having to constantly monitor what's going on. Maybe i should just buy some bank shares and set & forget?

Hiflo, you make me feel better I've also tried to diversify a bit by having some $ in Platinum's Asia fund (+ive), Navra's Aussie retail fund (+ive), Macquarie equinox 6 (not doing very well) and CFS property security (+ive).

I guess i probably should have named the thread something like what are people's thoughts on the CFS global resources fund. Are there any others here who have put $ into this apart from myself, hiflo and blade?

Tropo, you mention analysing the market, not the fund. May i ask what are your thoughts on the resource sector? Specifically, what do you think of holding the CFS global resources fund long term?

 

Analyse market charts (long term/short term trends etc) in relation to particular Fund you are interested in. You should get a picture.

 

"Tropo, you mention analysing the market, not the fund. May i ask what are your thoughts on the resource sector? Specifically, what do you think of holding the CFS global resources fund long term?"

Transit,

As you know Resources are in decline right now, so your Fund may be in decline as well.
Nobody can tell what will happen say... 5 years from now. I am not CFS follower.

 

If Fund is investing in say FTSE and or Nikkei check those
charts...Yep.....A lot of work...
A lot can be read from the chart. The only limit is the ability to read it
correctly.
You are correct. Few managers (only few) are able to make
money in the different market conditions. The only problem is to find
right managers to manage your money.
Running portfolio hands on I would allow 2% stop loss per stock.

 

Currently only NI.

 

NI strategy does not worry me a bit as long as NI is above sea level.
If worse comes to worse I can cover potential loss by my own trading (some people call it hedging) if NI is substantially down.
Hands on trading is another game which to some extent I can control. I can not control NI.

 

Nice line of questioning Sim, could be some help for Tropo as well. I seem to remember I have read your strategy somewhere? Sim, or maybe you just told me in chat?

I laughed out loud when you said you invested in NI as a MF after your 'averaging down' comment Tropo, interesting how our mind can reconcile anything I say!

Averaging down is not the worst strategy ever, it's simple another trading cliche that needs further explanation before it can dispense any true wisdom. an AIM system is a potentially valid way to make money I think. I have done some very basic testing that replicated published NI results for a share (LEI), so I believe I have a fairly good understanding of the mechanics of this particular averaging down. AIM also violates another oft quoted cliche 'Let your profits run' (yes it's great wisdom but you need more explanation than just the soundbite). Last I heard I understood NI had a 10% portfolio cap on any share which is a decent enough start for disaster avoidance.

I think the key is having a strategy, continuing to improve it and continually implementing it.

Kind of like despite all the sophisticated things you know about money one of the most powerful ideas is to 'pay yourself first' and save x% of your take home pay.

Simple ideas can work well.

 

Sim, did you get that margin facility sorted and put some $ into the CFS Global Resources Fund? I'm a bit slack with keeping on top of things and i've been o'seas for the last 4 weeks but i just checked the unit price and it's now back up to 1.3961 so i'm now up $110!

Damn, i should have put that $5k into some more units when i was thinking about it! Aah well, at least i (currently) have my capital back and am back in the black.