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Chairman2
Posted: 08 September 2010 18:26:54(UTC)
#11

Joined: 26/06/2009(UTC)
Posts: 11

For KJ

You appear to have an unsuitable portfolio to put it mildly

Chalk up another black mark for Financial advice.

If it wasnt for the thousands of examples like your's the Financial services industry
might have justification for its existence. Financial advice is badly needed - but I
personally wouldnt recommend buying it.

You say you need an incolme stream. That means converting your bonds as they fall due
into and income producing fund. Financial advisors will rabbit on about risk, and tell you
to diversify - and you should depending on the practicalities of how much you have to invest.

There are masses of opportunities at the moment to invest for income - producing higher
net yields than bonds. I would go for a managed mixed fund combining some bonds and
some equities.

You have correctly identified charges and commissions in a low yield environment as
absolute performance killers. You will not find them recoomended by almost any
financial advisers 'cos they pay no commission but with Total exp[ense Ratios (the key
metric you should always ask about) The US owned Vanguard Funds now available in
the Uk but not from brokers like Hargreaves Lansdowne have the lowest in the biz - down to
lower than 0.5% - and that is not at the expense of performance since Vanguard buy
funds from the best perfoming Fund Managers in the business. Oh and in the States Vanguard are
one of the biggest - bigger than Fidelity for example.

PS keep you IS but switch investents -
stormdog
Posted: 08 September 2010 19:02:09(UTC)
#12

Joined: 04/02/2008(UTC)
Posts: 56

Mr. Johnstone, Sir,

I am in fact questioning the alleged competence of the majority of people whose job it is is to offer financial advice and charge for it

In my near sixty years of involvement in financial markets it is patent that the best method is to do your own research and then when getting utterly stuck be prepared to pay through the nose for the best advice that is available.

People who have money, and are not just plain incompetent, should take full responsibility for their finances to themselves by getting involved and not relying solely upon 'professional' advisers who have 'all of the power and none of the responsibility'.

Of course I am not saying that people should just trawl the web and so on, oh please Sir!
Are you so threatened that you now have to become silly?

When dealing with matters financial, all information is welcome, no matter the source, this also includes the views of so named experts who are in the main middle of the road employees, the most skilled having left to make money on their own accounts.

I quite agree that professionals have some uses, however to consider them to be any more competent than anyone else is not necessarily borne out by recent experience as is clearly evidenced by the dire state of our economy.

Please understand well, whilst you are now talking about out and out fraud, I was not, except in the case of the Sarth London car dealer.

If one of your cherished professionals gives incompetent advice then all can be lost and the victim has effectively had all his money ripped from him, there is nothing left.
If the car dealer sells you a dressed up dud then the outcome is the same, except that the victim is left with a heap of scrap metal that today has value.

So in short:

Do your own research.
Be sceptical and investigate everything that soi-disant 'professionals' want you to do or buy into.
Always your own decisions, at least then if it goes wrong it is your own fault and then stand tough!

I fear for people like our Mr Jefferies, from what he writes he hasn't got much of a chance. If he trusts his financial affairs to someone else he will be like the old Lloyd's members who just paid over their money to agents in trusting that the income would pay the school fees and ended up losing their houses and sometimes their lives. However Mr Jefferies states that he wishes to go his own way, yet he lacks knowledge, he may well end up as a sitting duck, I hope not.

Finally.

In fact I think that know you.

I totally and utterly understand where you are coming from and I agree with some of that which you have written.

Despite this I feel you have not as yet demonstrated sufficient vision to enable your arguments to really stand up and win through in today's slightly topsy-turvy world of finance.

Good luck to you though.


satish mittal
Posted: 08 September 2010 22:04:37(UTC)
#13

Joined: 21/04/2006(UTC)
Posts: 271

Mr johnstone said 'I am stunned you actually expect to get professional advice for free? If that is true then can I start by saying attitudes like the 'something for nothing' approach is ruining this country hence I do hope that posting on Citywire is not simply a means of getting free advice from an unqualified and unregulated source.'
Mr Johnstone should prove his allegations that Citywire s not simply a means of getting free advice from an unqualified and unregulated source.' I have been investin in stocks & share since 1980. Initially I used Professional advisors but got frusted and subsequently managed my porfolio myself but with some ups and down but more ups than down. Getting advice from Citywire , Finacial pages of daily papers or magazine is not actually free as they earn money indirectly through some other sourse.
Having compared the portfolio of Citywire, Hargreaves Lansdown, Best Invest, fidelity, I find Citywire most trustworthy. I have no finacial interest in Citywire. I am a reired GP. Mr Johnstone should substantiate his claims which he can do by mentioning the funds by nane which Citywire have have excluded from their recommendations. I read their recommendations and compare before investin in the funds. If Mr Johnstone is right, I will not waste my time readind Citywire reports anymore.
Satish Mittal
Rick. Y.
Posted: 08 September 2010 23:49:32(UTC)
#14

Joined: 16/06/2010(UTC)
Posts: 1

Dear Keith,
Like you, I have become disillusioned with "Independant" financial advice over the years and am self investing. I have tried to maximise my ISA's for both myself and spouse and am also deal directly in Stocks and Shares. I have tried to diversfy my ISA's far and wide and my share portfolio is a mixture of high yielding,growth stocks and some speculative.
Hargreave Lansdown are a good company to put your ISA.s into, as they provide a reduced charging system which allows more of your investment to stay within your fund and not your IFA's account.
David Johnstone is correct in saying there is no such thing as free advice, so I pay for a share analysis service up-front.
There are other websites you can use apart from Citywire, which although very good, is populated with a lot of afore-mentioned IFA's .
A good initial point to start would be to join the Motley Fool, which is primarily similar minded people. Look at their forums but take share tips with a pinch of salt.
Trustnet is also a good resource for researching Funds and you can monitor all your funds within their website
I would not like to advise you what to invest in for such a short time frame, but I'm sure there will be some ideas on the "Fool".
Finally, I would like to say that it whilst you may not be able to maximise your returns by going it alone, you do have the satisfaction of making your own decisions, you know where to point the finger for any mistakes made,and you can act far quicker to minimise your errors.
I hope this has been of some help,
Yours Sincerely,
Rick Yorston
Ivor Nestegg
Posted: 09 September 2010 08:43:58(UTC)
#15

Joined: 16/07/2009(UTC)
Posts: 48

Re; "My point is simple. Some people expect the earth and pay nothing for it. "

And equally some people expect to be paid fees even when their services have cost their clients money.

Your arrogance astounds me sir!
keith jefferies
Posted: 09 September 2010 08:50:48(UTC)
#16

Joined: 06/01/2010(UTC)
Posts: 7

Thank you stormdog, rick Y and everyone for their positive support and helpful answers.
Roger May
Posted: 09 September 2010 09:49:33(UTC)
#17

Joined: 03/08/2010(UTC)
Posts: 4

What worries me is the "tunnel-vision" approach to growth and income stocks.

It seems to me that if you have £1,000 and invest it in a blue-chip share, or a unit trust, which gives a dividend of 5% but zero growth, at the end of the year you have £1,050 (ignoring the effects of inflation). If you choose poorly (say BP) you could end up with £900.

If, on the other hand, you invest the £1,000 in Scottish Oriental Smaller Companies investment trust (which I must admit sounds horrendously risky, but has beaten the FTSE All-Share for the last 5 years), you could well end up with £1,500. You then sell enough of the shares to give you the required level of income, 5%. You still have £1,450. In practice you would probably sell something else in your portfolio that wasn't performing so well, so you would get the further benefit of compounding for the next year.

This is NOT rocket science. It needs a good deal of homework and the courage of your convictions, and an acceptance that the good old days of "buy-well-and-hold" are gone forever. But you CANNOT treat equities or unit trusts as if they were bank accounts. You have a pretty good chance of losing money. If the banks won't play ball and give you a decent rate of interest on a deposit, you have no real option but to take the initiative yourself.

I am not an IFA, I am a private investor. In my experience good IFAs are like hen's teeth.
keith jefferies
Posted: 09 September 2010 10:16:39(UTC)
#18

Joined: 06/01/2010(UTC)
Posts: 7

Thank you Mr Johnstone..............light the blue touch and retire to a safe distance.

Your replies have have provoked some useful viewpoints and entertaining discussion, exactly as intended.
Malcolm Lewis
Posted: 09 September 2010 16:23:30(UTC)
#19

Joined: 04/03/2007(UTC)
Posts: 3

Interesting discussion which perhaps best illustrates why investors are best protected by doing their own research and then making their own decisions.

As has been mentioned there is a lot of free information out there on trustnet and on Citywire for investors to use and then make their own decisions.

placing investments via Cofunds and Hargreaves Landown - both of which are proven, excellent organisations will then save the investor money.

Of course this will leave out the "wrinkles" mentioned by Mr Johnstone but the investor will have formulated his own rationale for investing as he did, will probably do as well as the expensive IFA who may know a lot about investment vehicles which pay him the best commisssion but probably does not know a lot about the funds themselves.

Importantly too the investor will save alot of money in so called "professional" fees.
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