Time for action!

It seems as though so many funds are performing above %20 that I hardly bothered looking at anything under that number. But I wasn't sure if I was just being greedy.

 

11% is the long term average if I take my old fund on purchase price the return for the last 6 months is over 50%, my newest fund is targeted at 12% and has had a return for the last year of 14% while it returns 5.15% over holding costs I will be

Oh and franking credits are tax paid at the 30% company rate which you can use to offset your personal tax.

 

Thanks again for all the help.

Just a quick update.

I haven't really made much progress. I have spent alot of time on investsmart.com, using the 'find a fund' page.
I have been looking mainly into the 'Equity Region Australia Large Growth' category, as it seems to be a relatively low risk option with decent returns.

I'm still not sure what I'm actually looking for. I usually just order results by 3 year returns and work my way down the list.

First thing I look at is fund performance / historical returns. But it appears that all the top performing funds are relatively new to the market. And the funds that have been around for longer don't seem to be performing all that well over the long term.

(are managed funds a relatively new product? Where are all the old funds? Do they shut down eventually or what?)

Anyway, I usually have a browse through the fund profile, and if it seems to be performing well I have a browse through the PDS. Most of these seem to say the same thing, they never appear to have any really useful information (maybe I'm not looking hard enough).??

Am I doing the right thing?
I really don't see how I should differentiate one fund from another, other than past performance. Obviously funds invest in different ways, but I don't understand enough about that to make a decision either way.
Everyone keeps telling me to do my research, but I'm not sure what else or where else I should be researching? Everything seems basically the same, nothing really stands out as being the 'right' fund for me.

I was just having a look at this fund:
Fund Profile

I was curious as to why I can't view the PDS online? I noticed it has a large initial investment, but a lower MER than alot of other funds.
Judging by fund performance, this seems to be one of the best performing long term funds in the category I was searching.


So, that's about it. I don't seem to be getting anywhere fast.
Hypothetically speaking, if I chose one of the top 5 funds from the ''Equity Region Australia Large Growth'', ordered by 3 year returns, what are the chances of loosing money?

(I'm not really going to do that, but just wanted an idea of the risk involved with that scenario)

Thanks.

 

Nope.

The right thing would be to pick a fund, any fund, roll a dice if you need to, and then put $1K into it. THEN you've done the right thing. Chances are it will be a better result that what you've done so far...

Sorry, that might sound a bit harsh but you're trying to find the PERFECT answer, and in investing there is no perfect answer. Just a lot of different options with differing risk profiles and return histories. But 90% of them have merit and as such rolling a dice would be better than over-working the thought process. In this regard I guess I am disagreeing with Sim.

Early on in this thread there was a post or two "spelling out a specific strategy" for you, even naming funds. Forget the analysis and just do it. Use the expertise of members on this forum as your guide as to which fund to choose. Of course, we'll all cover our you-no-whats by disclaiming any accountability for advice offered, but at the end of the day that advice will still be pretty sound. So, if you want my recommendation: go NavTrade Aus Retail Blue Chip. It did 20% last year and will probably do more than 10% again next year.

How about setting yourself an immediate goal along your long-term strategy of investing $1,000 in a fund by the end of next week. Go away and do that and then come back here and post which one you invested in and how you found the process. Forget margin loans, forget investsmart, forget any sort of further analysis. You have everything you need already to be able to invest that one thousand dollars. Do that now, and then think about next steps.

I can tell you're a smart bloke, but this procrastination is killing me!

Cheers,
Michael.

 

Well said !!!!

 

Just open a Comsec account, spend $30 on brokerage, and buy stock code "STW"

streetTRACKS

It's not that hard mate

 

That would be tomorrow....

Any news on the investing front?

 

MW

This is very sound advice as always. People spend too much time over
analysing. I'm not saying be reckless but doing nothing is the biggest risk of all. Manage the risks.

Doing nothing will get you nowhere. Pick some quality IPs / Managed funds / LICs and get on with it.

Regards

Luke

 

Compleks

Pick a fund managed that has performed well in all markets over the long term. Not just the last 3 years. I will probably get flamed for this comment, but I would prefer a more consistent return.

Or stick with a low cost index fund as Glebe has suggested.

To get you started

Argo Investments
Australian Foundation Investment Company
Milton Corporation Limited
http://www.vanguard.com.au/
streetTRACKS

All these have a great long term track record. Not to mention low fees. I don't know much about that Amro fund but looks ok at first glance.

 

"Pick a fund managed that has performed well in all markets over the long term. Not just the last 3 years. I will probably get flamed for this comment, but I would prefer a more consistent return."

FrankGrimes,

That is what I would do, paying close attention to funds' performance during the bear market.

 

You better have sent your application form off today? as tomorrow is the 1st of August?

 

Yep. I have no interest in a fund that does 70% one year and then -40% the next. Sure it may average out ok but you have a high chance of getting in when the unit price is high.

Don't just chase "high returns".. I'm not saying pick a dog of a fund, but something consistent. See above, and see Glebe's "Hello LICs" thread.

 

I am not funds fan but +70% and -40% would eliminate fund from my shopping list.
I would say that funds performance should be fairly consistent (in reasonable range). During the bull run everybody is doing O.K. (with some exceptions).
Problem starts during the bear market.
If during downturn and extensive bear/choppy market fund performs reasonably well, it may be a good idea to put some money into it.
But as you know - past performance does not guarantee future results.

 

***Update***

Sorry I haven't replied for a while. I have been reading everything that was posted, but avoided responding because I didn't want to procrastinate anymore. Even though i had many more questions, I decided they weren't that important. At least not as important as taking action.

Firstly, thanks to everyone for all the advice. You have no idea how much I appreciate everyones help. You have all been extremely informative and supportive, which has made a huge difference.

So, it's August 1st and I just got back from mailing my first application form. In the end I decided to invest $5,000 into the CFS - 452 geared Australian share fund. I realised a little late that there were infact two similar CFS geared share funds. I wasn't really sure what the differences were, but decided to go with the 452 fund.
Anyway. I'm sure there were things I overlooked, or could have done better, but in the end I'm just happy to have done something. I know it will take a few days to finalise, which means technically I missed my deadline, but that doesn't matter anymore.

I guess this is the time when I really start to learn something about investing. I'm keen to keep investing, and would like another few funds in the near future. For the time being though I will sit back, see what happens, and keep learning.

I'm just dreading the response telling me what a huge mistake I have made investing in that fund.

Fingers crossed.

Thank you to everyone that took the time to respond in this thread.

Kind regards,
Compleks...

 

well done!

Thats the fund I suggested you pick back on page 1!!

Its a good fund, and they are a value fund manager..

Plus your getting in after the last couple weeks of falls, so your getting in at a discount! Well timed!

Now I don't want to see withdrawals for at least 5 years! even if the market looks 'bad'.. these are the times you should top-up..

 

Haha. Thanks mate.

 

Yeh, it only took me 6 pages to take your advice

As for the timing, we'll put that down to beginners luck. I don't plan to take anything out for a long time. I hope to make regular contributions when I have the cash.

Thanks crc.