Managed Funds Income Funds

Mr D, can I ask another idiot's question ?

With all care and no responsibility, do you think the likely economic environment for the next few years will suit NI and should we expect similar, worse or better returns than we got in the last couple of years ? (which accoriding to Steve were some of the worst possible conditions for NavTrade to perfrom well)

Basically I am considering a decent amount of gearing but I will be very reliant on the income generated. I can accept a moderate degree of risk, but too many quarters without income could quite quickly destroy me.

Obviously I don't expect 'advice' about the above, just anyone's opinion if the likely economic environment would mean this is a case of bad timing to consider borrowing to invest more heavily in the fund.

Thanks for your patience !
Carl

 

"The bit that worries me is having all my eggs in one basket, as the only real exposure to equities I have is all Navra-related."

Carl,

Some investors/traders are saying that, if you get one good horse ride him as long as you can...
Putting your money in the different Fund will not "diversify" much because most of the funds invest in the same shares (more or less). But again...it's only up to you to decide what to do.
No pain - no gain.

 

Good point Tropo - with the horse comment I nearly made a rude joke about my wife, but one day she'll log on to this website and discretion is the better part of valour ;-)

Both the points yourself and Mr D made are perfectly sensible to me - but at least going through the discussion its forcing me to think. Maybe a bit too much


Thanks loads
C

 

Sure, and have no doubt you'll get an idiot's answer!

I don't know if future market will suit NI better or not,but I am comfortable with their system to make cash returns in most markets. The income is good, it helps me reach my goals sooner, but long term the growth of assets will make me rich not the income. I can survive with no income for a long time, but by doing so am slowing those goals.

But for me the most important thing is preservation of capital. Loose the capital, those goals are shot for a long, long time. And I am a little worried about this in the next 2-3 years based mostly on my uneducated fear and distrust of the share market, so I keep most of my share investments a little liquid.

This is a little at odds with the heavy gearing into funds such as CFS, but it is about 10% of portfolio (NI is 25%) so I have afford to take a hit there and consider it worth the risk.

 

It was a great answer thanks !

I get the point about the capital. Actually my foray into direct shares saw my capital plummet about 35% in 2 weeks and it took about 6 months to recover 15-20% of it before I lost my nerve and bailed with a "never again"

Fortunately the only other shares I had went up by the same amount to offset the loss, but it still felt painful

Even at worst, my capital in NI has not yet varied by more than a few percent (touch appropriate wooden things) - its definitely got the SANF they talk about as long as I don't overanalyse it to the point I get sleepless again

 

"I get the point about the capital. Actually my foray into direct shares saw my capital plummet about 35% in 2 weeks and it took about 6 months to recover 15-20% of it before I lost my nerve and bailed with a "never again"

Fortunately the only other shares I had went up by the same amount to offset the loss, but it still felt painful".

Carl,

" The greatest misconception about the market is the idea that if you buy and hold stocks for long periods of time, you'll always make money. Let me give you some specific examples.
Anyone who bought the stock market at any time between the 1896 low and the 1932 low would have lost money.
In other words, there's a 36 years period in which a buy-and-hold strategy would have lost money.
As a more modern example, anyone who bought the market at any time between the 1962 low and the 1974 low would have lost money ".
- Victor Sperandeo.

 

Stop it Tropo - I'm never going to sleep again ! ;-)

 

O.K....Never again !!

 

Hi MrDarcy,
Agree with your views, and this may not add much to discussion, however in above example, if you contrbute 100K plus borrow 100K from margin lender, you could purchase 200K of CFS/GSF units. Then CFS at 50% internal gearing using your 200k would borrow anther 200K giving 400K dollars exposure to shares, giving an exposure to share ratio of 4:1. Still only 2:1 for your personal gearing, but the exposure to shares of 4:1 would be increasing the potential gains or losses on your $200k purchase.

Cheers

 

Thanks! When I was typing something seemed not quite right, I must have been distracted by work at the time

 

I think you'll find that NI has ONLY safe blue chips, ones that meet very strict criteria.

NI has its stock selection criteria somewhere on the web. check it out.

I wish NI would startup another fund that only uses higher volatile mid-larg cap stocks.

T.

 

If anyone from NI is reading, what a great idea to look into ;-) I guess there's a pretty massive overhead to the watching brief NI needs to keep ? - maybe it would be too hard to manage ? Or is it just a matter of appointing one specialist, setting some buy and sell points, and using the same system ? I'd definitely sell the first born to throw some dollars in ;-) (sorry one and only daughter - just joking)

 

I've asked Steve that question. From memory his response was something along the lines of "look at my client's risk profile...they're Mums and Dads. I don't want them to take on unecessary risk if they can achieve their goals sticking with blue chips".

Maybe down the track if we bend his ear enough...

N.

 

Yes, I know what is in NI and why, I'll rephrase:

NI is quite a safe fund, but it also doesn't get enough exposure ALL of the safe blue chips.

There are only about 20 in the fund out of many, so we can miss out on some good trading gains and mentioned. But, I'm sure the boys and girls at NI know what they are doing and playing it safe means we don't get burned, I hope.

 

Blue Chips

Music to my ears....

Bob