Search found 127 matches

by LondonJimmy
Thu Nov 28, 2013 4:56 am
Forum: Investing - Theory, News & General
Topic: The Three-Fund Portfolio
Replies: 3898
Views: 2434931

Re: The Three Fund Portfolio

I have read this forum a lot and am so grateful for all the amazing advice from the people on here. I feel priveledged and super lucky to have come across such an amazing place. It has also taken me a while to understand the value of indexing. I have followed this thread closely. I know some (or plenty) would hate my style, but I have put everything I have in stocks. I am 100% stocks 0% bonds :D I understand the risks but won't withdraw any money from this until around 20 years from now. I think I will start to rebalance and include some bonds in around 15 years from now. If there is a crash right before I do so then so be it, you can't eliminate all risk, and I am not even that bothered. You only live once. Good luck to all here! :sharebeer
by LondonJimmy
Sat Nov 16, 2013 11:51 am
Forum: Investing - Theory, News & General
Topic: Bond question
Replies: 28
Views: 2158

Re: Bond question

How do you know that you can take on the risk of a 100% stock portfolio? Have you ever lost a serious amount of money before? How would you feel if you lost 10 years worth of savings? No kind of questionnaire is going to tell you what your risk tolerance is. You have to live through it and see for yourself. Therefore, I will go against the grain and say that anyone who has not personally experienced losing a substantial amount of money should just be 50/50 stocks/bonds until they do. After that, you can reassess and make adjustments if necessary. The way to overcome this though is through knowledge. If you are holding and investing for years and years, then you should KNOW that 100% stocks will give you the greatest ROI. [OT comments remov...
by LondonJimmy
Sat Nov 16, 2013 11:48 am
Forum: Investing - Theory, News & General
Topic: Bond question
Replies: 28
Views: 2158

Re: Bond question

I have thought about this over and over again and can't get my head around it. I have never had a response yet to convince me that I should be holding bonds.

My current situation is that I am 29 years old and have a decent amount. Surely 100% stocks would be the best way to go. [OT comment removed by admin LadyGeek] I will simply keep investing every month mo matter where the market is at. I have zero clue as to where the market is going at any time.

What I do know is that I will always be investing and I am giving up/losing loads of money by holding bonds long-term.
by LondonJimmy
Fri Oct 18, 2013 9:03 pm
Forum: Personal Investments
Topic: sellers remorse [Individual stocks to index funds]
Replies: 22
Views: 3454

Re: sellers remorse [Individual stocks to index funds]

Hi everybody, As a fairly recent boglehead, I've been slowly removing individual stocks from my portfolio and converting them to index funds. I sold off (admittedly a small position) in Google about a month ago, and yesterday there was a pop in the share price of about 12%. Arrrg! I'm committed to bogleheading and will keep converting to index funds, and at the moment I'm consoling myself with the knowledge that I've reduced my risk, but it made me wonder: Have other bogleheads done this? How did you deal with it? I would not worry about this at all. Studying all the evidence, indexing is a great choice. Imagine looking back in x amount of years from now and comparing you indexing vs picking stocks. Indexing is by far the better choice and...
by LondonJimmy
Fri Oct 18, 2013 9:01 pm
Forum: Personal Investments
Topic: Maximizing ROI - Three Fund Portfolio
Replies: 12
Views: 1487

Re: Maximizing ROI - Three Fund Portfolio

Maximum ROI (based on past long-term trends, no guarantee that it holds in the future or even if it holds for the infinite future that it holds over your specific timeframe) would be achieved by 100% equities. To maximize ROI put 100% in the highest returning asset. Ben Graham (managed money before, during, and after the Great Depression) said that every investor should have a minimum of 25% and a maximum of 75% stocks. Peter Bernstein wrote an article called "The 60/40 Solution" http://web.archive.org/web/20061214061904/http://dfmadvisors.com/pdf/Bernstein6040.pdf Although as a money manager, he later recanted, you should consider the reasoning. I read recently where Jack Bogle has been buying Balanced Index Fund for his grandch...
by LondonJimmy
Fri Oct 18, 2013 8:56 pm
Forum: Personal Investments
Topic: Maximizing ROI - Three Fund Portfolio
Replies: 12
Views: 1487

Re: Maximizing ROI - Three Fund Portfolio

I could be 100% stocks and simply NEVER care where the market is at, Come on, get real. I think your naivete is showing. That's just not realistic for all but the superhuman. Keep some dry powder on the side so that when the next inevitable bear market happens, you have more to do than merely watch the last several years of returns evaporate: you can judiciously move in and buy low. If you want to be aggressive, go ahead and stick with your 80/20 split. Value average to ensure you're buying into the bear market, and you'll do fine. Or get greedy and (most likely) get slaughtered eventually. You don't have to be super human at all. I don't understand why people act irrationally here. You are not even holding a particular stock (which entail...
by LondonJimmy
Fri Oct 18, 2013 8:05 pm
Forum: Personal Investments
Topic: Maximizing ROI - Three Fund Portfolio
Replies: 12
Views: 1487

Re: Maximizing ROI - Three Fund Portfolio

I had £250,000 held all in gold and silver. This was a GREAT percentage of my net worth. I slept like a baby at night, even when I was losing bundles.

Risk is not an issue with me in the slightest. Holding stocks or indexes feels like extremely low risk compared to what I am used to - even if the market dropped 50%, I wouldn't feel bothered in any way. I will be holding it for years.

Do people only advocate bonds then due to peoples weakness (if they are of young age)?
by LondonJimmy
Fri Oct 18, 2013 7:18 pm
Forum: Personal Investments
Topic: Maximizing ROI - Three Fund Portfolio
Replies: 12
Views: 1487

Maximizing ROI - Three Fund Portfolio

I am wondering what my play is here. If an individual (me) is focused on investing for the long-term, say 20 years, what proportion should they invest in stocks provided they can stomach basically anything? Their goal is to maximize their ROI over the long haul. I was thinking about this and I thought of simply being 100% equities and worrying about switching a certain amount to bonds when I am older. However, if I am in 100% equities then I can’t sell my bonds during a major bear market/recession/collapse etc and buy the equities which are going cheap. Being able to do this would clearly be very good from a long-term point of view. Then again, is this going against the Boglehead mentality as you should never try to time markets? I am tryin...
by LondonJimmy
Mon Aug 19, 2013 4:43 pm
Forum: Personal Investments
Topic: I soooo want to pile in large here...
Replies: 53
Views: 8152

Re: I soooo want to pile in large here...

One of the real things holding me back is that long-term you can't just buy and sell and expect to make money. The real way to make a lot of money is if you really understand something and invest and hold. You have to be right about the business and the fees won't kill you. Thus it is so much easier indexing unless you really want to do this and be in the business of doing so.
by LondonJimmy
Mon Aug 19, 2013 4:05 pm
Forum: Personal Investments
Topic: I soooo want to pile in large here...
Replies: 53
Views: 8152

Re: I soooo want to pile in large here...

I think this really sums up the situation on investing. Nice to hear Buffett finally asked this question, however, indexing is an excellent and the best choice for the majority.

http://www.youtube.com/watch?v=NsueA-_ilxA
by LondonJimmy
Mon Aug 19, 2013 9:36 am
Forum: Personal Investments
Topic: I soooo want to pile in large here...
Replies: 53
Views: 8152

Re: I soooo want to pile in large here...

Do you worry about the future of BRK? It must be getting harder and harder.

By the way, I am a big fan of indexing and the Three Fund Portfolio. I do know though that now and again you can get a good idea.
by LondonJimmy
Mon Aug 19, 2013 8:27 am
Forum: Personal Investments
Topic: I soooo want to pile in large here...
Replies: 53
Views: 8152

Re: I soooo want to pile in large here...

Thanks for the replies everyone. I realise some of the comments made here show that particular person believes that markets are 100% efficient at all times. I respectfully disagree. Regarding gold stocks, they are so cheap and with negative sentiment already priced in. When gold went down the stocks got crushed. I think these companies will show good profits in the future and I believe the price of gold will rise. What makes me bullish is that the fundamentals are really strong but the sentiment is really bearish. So many people are short and people have sold already. Companies are also limiting the amount of gold they will mine in the future - I don't see that much supply. A company like Barrick could buy out their competitors with stocks ...
by LondonJimmy
Sun Aug 18, 2013 11:01 am
Forum: Personal Investments
Topic: I soooo want to pile in large here...
Replies: 53
Views: 8152

I soooo want to pile in large here...

Not Boglehead style I know...but I have only ever picked 4 stocks in my whole life (or over the last ten years). Every stock proceeded to increase over 100% in a short-time. I mainly did this by buying when people were panicking and acting irrational.

I have not really looked into this yet, but the price of Barrick Gold is under 20 bucks. That is super cheap and lower than the price in 2008. The price is off its high of around $55. I am sure people panicked and sold during the recent gold selloff.

Worth jumping in? Barrick gold is a good company and that price is just SOO cheap!!!
by LondonJimmy
Fri Jul 12, 2013 5:36 am
Forum: Personal Investments
Topic: Talking With My Sister About Investing and Risk
Replies: 22
Views: 2573

Re: Talking With My Sister About Investing and Risk

nodenuff2 wrote:Another thought to give her. It is only truly GREAT when it is converted into real dollars and diversified. Rest is just numbers on a page.

Really? Then what do you do with the dollars? Dollars are a terrible investment and loses value.
by LondonJimmy
Thu Jul 11, 2013 7:12 am
Forum: Personal Investments
Topic: Talking With My Sister About Investing and Risk
Replies: 22
Views: 2573

Re: Talking With My Sister About Investing and Risk

How about pointing her to this forum and simply explaining to her the risks inherent in a single firm. Explain how so many 'professionals' underperform the market and why. Explain how the chances are that her firm will not earn above avergare returns and she will not be compensated properly for the amount of risk she is taking. Chances are the massive growth and returns have already been experienced. She should thank her luck and now invest her large amount in indexes and bonds. A properly diversified portfolio should grow well and provide her with sufficient income in her retirement when she switches to more bonds. If she wants to take a chance and gamble then fine, provided she understands the risks and that she might lose it all. If she ...
by LondonJimmy
Wed Jul 03, 2013 8:48 am
Forum: Investing - Theory, News & General
Topic: Merriman - Buffett is more myth than legend
Replies: 21
Views: 3786

Re: Merriman - Buffett is more myth than legend

I didn't like the article. It is pretty simplistic and not accurate.

It says that Buffett's speciality is value investing. It isn't. Value investing is what Warren refers to the 'cigar butt apropach'. Where you search around for cigar butts and there is one puff left in it, you have it then move on to the next one...but it is free. You won't get rich that way but you can make a small amount.

Warrens skill is investing when he understands a business and can see where it will be in the future. The best buys for him has been where the numbers have told him not to buy, but he understood so much about the business that he felt very strongly about it. Those are the best buys, if you have that great skill.
by LondonJimmy
Wed Jul 03, 2013 5:36 am
Forum: Investing - Theory, News & General
Topic: My Take on Gold
Replies: 213
Views: 28208

Re: My Take on Gold

Great article from 1976 when gold lost 50% from its highs. The usual sentiment in the media about gold, and then gold went to hit new highs... " Two years ago gold bugs ran wild as the price of gold rose nearly six times. But since cresting two years ago it has steadily declined, almost by half, putting the gold bugs in flight. The most recent advisory from a leading Wall Street firm suggests that the price will continue to drift downward, and may ultimately settle 40% below current levels. The rout says a lot about consumer confidence in the worldwide recovery. The sharply reduced rates of inflation combined with resurgence of other, more economically productive investments, such as stocks, real estate, and bank savings have combined ...
by LondonJimmy
Fri Jun 28, 2013 4:41 am
Forum: Investing - Theory, News & General
Topic: My Take on Gold
Replies: 213
Views: 28208

Re: My Take on Gold

Rick, shouldn't gold be compared to paper currency? I don't think gold should be compared to stocks. Gold was traditionally money and as such, it should be compared to your currency. Since the Fed was established hasn't paper money lost around 99% of its value, whereas gold maintains value over a long period of time. Granted, it can stay down in dollar terms for a long amount of time, and you can earn interest on paper money (although not much over the last few years) but comparing gold to stocks is not correct in my opinion.

Therefore if we ignore speculation, a small amount of gold (say 5% of ones portfolio) could be held for diversification benefits.
by LondonJimmy
Wed Jun 26, 2013 3:54 pm
Forum: Personal Investments
Topic: Buying physical gold
Replies: 53
Views: 10142

Re: Buying physical gold

Ill believe that 2% claim when I see the receipt - does that include both the amount you pay over spot buying the coin (typically 3%, already larger than the number you quoted) and the ebay and paypal fees on selling? I must be crazy, but seem to remember Ebay charging a 10% flat rate on auction listings, is that not correct? That sounds like a 13% round trip to me, plus paypal. Even if you avoid taxes - which is perhaps not the smartest move when dealing with $25,000 worth of gold. Let's be generous and call it a 3% round trip (not using ebay, as we have just demonstrated) then the question remains - would you ever buy a fund with a 3% load? I would not. I love the idea of having to list my investments on Ebay when I want to redeem them.....
by LondonJimmy
Wed Jun 26, 2013 7:02 am
Forum: Personal Investments
Topic: Do you sell gold here in my situation?
Replies: 14
Views: 1205

Re: Do you sell gold here in my situation?

Yup, 3 kilos which = roughly 96 troy ounces.

I made £48,500 profit on the silver and £20,000 on the gold. So I am up £68,500.

The 3 kilos I have left cost me £69,900 or £23,300 per bar. So basically I am freerolling or have these bars for nothing right now....if I look at it that way.
by LondonJimmy
Wed Jun 26, 2013 6:35 am
Forum: Personal Investments
Topic: Buying physical gold
Replies: 53
Views: 10142

Re: Buying physical gold

imperialyoyo wrote:
dimdum wrote:I know lots of bogleheads owe precious metal and gold.
Is this true? I read that commodities are more speculation than investment.
Of course it is speculation. Investment is putting out money now in order to get more money back later on at an appropriate rate.

However, owning a small amount of say gold, may provide diversification benefits.
by LondonJimmy
Wed Jun 26, 2013 6:20 am
Forum: Personal Investments
Topic: Do you sell gold here in my situation?
Replies: 14
Views: 1205

Re: Do you sell gold here in my situation?

I trust that you realize that you purchased a purely speculative asset. There are various ways to attempt to place a value on gold, but there is no assurance that it will ever trade close to this estimated value. Why did you buy gold to begin with? Why aren't those reasons still valid? To be honest, I thought the QE by the central banks would devalue paper currencies and I thought other people would think this and also move into gold. I was not sure where to put money since interest rates were also so low and looked to stay that way. I felt that the majority of people didn't realise this (although some did) and if I were right gold would go high. I think I was kind of right as people seemed to start thinking this and investing in gold. How...
by LondonJimmy
Wed Jun 26, 2013 6:07 am
Forum: Personal Investments
Topic: Do you sell gold here in my situation?
Replies: 14
Views: 1205

Re: Do you sell gold here in my situation?

wesleymouch wrote:You are reacting to the falling price of gold. I would hold it at 10-15% of allocation. Given what is happening in the world it is a prudent hedge. Generally doing the opposite what you are feeling is profitable in investing. This forum, however, hates gold and bashes it constantly. Personally I would stay the course. However, you should own some stocks and bonds also.
Yeah I think that is great advice. Doing the opposite of what you feel is probably one of the best bits of advice in investing.

I guess holding the gold and putting the rest into something like the three fund portfolio should be good from a long-term point of view, plus I would be diversified.
by LondonJimmy
Wed Jun 26, 2013 5:59 am
Forum: Personal Investments
Topic: Do you sell gold here in my situation?
Replies: 14
Views: 1205

Do you sell gold here in my situation?

Hi A few years ago I invested £25,000 in silver at £10.90 per troy ounce. I then invested another £40,000 and £14.5 per troy ounce. I sold the lot when the price was £25.5. I also bought 5 kilos of gold at the same time as when I first bought the silver. I have sold two kilos of gold making roughly £10,000 on each. I now have 3 kilos left. The price with the premium paid when I first invested was £725 per troy ounce. It went up to roughly £1120 but is now roughly £810. There are plenty of people thinking the 'bubble has burst' etc and we are in a long painful road from here. I am not sure if we are or not but I am also not sure if I should sell (and move into what?) or simply hold for 20 years if need be. I originally invested roughly 40% o...
by LondonJimmy
Wed Jun 26, 2013 5:50 am
Forum: Personal Investments
Topic: Buying physical gold
Replies: 53
Views: 10142

Re: Buying physical gold

I know the best people here in the UK. I bought kilo bars because I wanted the most amount of gold for my money with the lowest premiums.

Are you in the US?
by LondonJimmy
Fri Jun 21, 2013 4:44 am
Forum: Personal Finance (Not Investing)
Topic: Career as a trader
Replies: 32
Views: 4785

Re: Career as a trader

I have traded for over 20 years. I began working on the floor of the CBOT in the mid 1980's. I have traded electronically from an office since 2001. I am from Chicago and I trade my own capital. The trading business has changed dramatically over the past 5 years and I guess it is always changing. I could write a book about my experience as a trader. I have seen guys who have it 'big' on the floor and traded as big as the wall street firms. I was in a room with a guy who made $250k on the sunday night that lehman collapsed in 2008. In 2006 I knew a 28 year old kid who made $6 mln dollars. I have a friend who started a high frequency firm and probably is a billionaire. My first year of trading I made over $250k and for over 10 years I never ...
by LondonJimmy
Fri Jun 21, 2013 4:38 am
Forum: Personal Finance (Not Investing)
Topic: Career as a trader
Replies: 32
Views: 4785

Re: Career as a trader

How long have you been trying to make it as a poker player? The landscape has changed and I am not sure it is a realistic option. Only the few sponsored pros get a stready paycheck, the rest just grind out a boring, stressful existence. I used to do it prety successfully but I keep playing too big lol. I need to sort that out. In my view the game will always be there and it will always be a realistic option. People are better players nowadays but the fundamental fact is that no player on earth plays as good when they are losing as they do when they are winning. Every player has some sort of emotion and there is always a difference - abit like stocks when people panic and sell as the price goes down when in fact, they should be buying more ...
by LondonJimmy
Fri Jun 21, 2013 4:36 am
Forum: Investing - Theory, News & General
Topic: 401k and investing in stocks is for idiots -Robert Kiyosaki
Replies: 21
Views: 4662

Re: 401k and investing in stocks is for idiots -Robert Kiyos

wastenot wrote:"'Rich Dad, Poor Dad' Author Files for Bankruptcy..."


http://abcnews.go.com/Business/rich-dad ... cMkeIzD-1s

Sound slike he is hiding his assets while getting out of the debts...
by LondonJimmy
Wed Jun 19, 2013 4:04 pm
Forum: Investing - Theory, News & General
Topic: 401k and investing in stocks is for idiots -Robert Kiyosaki
Replies: 21
Views: 4662

Re: 401k and investing in stocks is for idiots -Robert Kiyos

Mill wrote:I had to click...


Access Denied (policy_denied)


nice. :happy
??
by LondonJimmy
Wed Jun 19, 2013 6:12 am
Forum: Personal Finance (Not Investing)
Topic: Career as a trader
Replies: 32
Views: 4785

Re: Career as a trader

Yeah I did consider this. I was going to register on ACCA to become a chartered accountant, but to be honest, it is not me. I know it is a safe bet but I really would rather do something I enjoy in life.

You only live once right.
by LondonJimmy
Wed Jun 19, 2013 5:48 am
Forum: Personal Finance (Not Investing)
Topic: Career as a trader
Replies: 32
Views: 4785

Re: Career as a trader

fatlittlepig wrote:go back to school my friend, get a degree and then a job, rather than dreaming of making it rich as a trader.

I personally am not sure how important having a degree is. It seems people graduate nowadays with not many job prospects and a lot of debt.

That being said, I already have a degree in Accounting and Finance. Got pretty good grades too.
by LondonJimmy
Wed Jun 19, 2013 4:29 am
Forum: Personal Finance (Not Investing)
Topic: Career as a trader
Replies: 32
Views: 4785

Re: Career as a trader

Ranger wrote:Some what related to your background which might interest you.

http://sports.espn.go.com/espn/poker/co ... id=4381359

Thanks a lot for that!

I've played with Phil before when he came to London in the Victoria Casino. That article really relates to me because I always did have bad bankroll management. Usually people have to go through real pain before they can stay disciplined. I am still having trouble with that.

I have also spoken to a few traders. Maybe just investing my money in an index and playing poker as a career would be the best route for me. I imagine trading has got to be much tougher.
by LondonJimmy
Mon Jun 10, 2013 9:24 am
Forum: Personal Finance (Not Investing)
Topic: Career as a trader
Replies: 32
Views: 4785

Re: Career as a trader

Many people have the right attributes for it. That is what can be called "necessary but far from sufficient." How old are you? What's your background? What do you bring to the table? Who do you know? I am 28 years old. My background is a long varied one. I used to box for England, hated school (worst kid and most popular kid in the school lol). Left school at 16, went through a bit of a troubled time, nothing major. I think of it as living life and growing up. Became a tout on the street at 18, would take people to strip clubs. Earned more money doing that in a week than most people in a job earn a month (before they pay tax). Went to university, studied accounting and finance. People thought I was fairly smart, I thought most ov...
by LondonJimmy
Mon Jun 10, 2013 9:06 am
Forum: Personal Finance (Not Investing)
Topic: Career as a trader
Replies: 32
Views: 4785

Re: Career as a trader

I do not know a single trader who began any later than as a 25 year-old. Many of them fizzle out before 30. Many never get past the first year. Did they basically work like a dog and not make any money? I remember speaking with my Dad, he worked for a very rich guy in the 1970's. I think this guy was worth like $100m back then! Apparently he was still at it at around 60 years old. I imagine he must have died from a heart attack lol. My Dad would be very pro me doing this. He seems to think I have the right attributes for it, but I don't know where my edge would be and I would be competing with bundles of super smart people in fields they know. I was wondering how to get my foot in the door. I think I would enjoy it though - which is what l...
by LondonJimmy
Mon Jun 10, 2013 8:30 am
Forum: Personal Finance (Not Investing)
Topic: Career as a trader
Replies: 32
Views: 4785

Career as a trader

Hi all

I was wondering if anyone knows how hard it is to berak into a career in trading? It seems very tough to get in and I was wondering the best way to go about it. Should I just contact every prop firm I can?

Also, isn't it extremely tough to make money trading? Or do traders have massive advantages in banks/prop firms?

Thanks.
by LondonJimmy
Mon May 13, 2013 10:15 am
Forum: Personal Investments
Topic: Mother found dream house - spending too much?
Replies: 15
Views: 2052

Re: Mother found dream house - spending too much?

I would say it depends on what NHS covers, which is not something I know anything about. Will it cover assisted living and long-term care? The concern about having too little cash is that one will have unexpected expenses that exceed the cash reserves. In the US, extremely often this is health-related. This may really be a country-specific question. I'm not sure too many on this board would be in a position to assess a) how secure her pension is, b) how likely one might be to have a physical condition or health event not covered by NHS, which in my mind are the two biggest factors that need consideration. The NHS basically covers you for operations, hospital treatment etc. However, it does not cover you for care when elders go into a home....
by LondonJimmy
Mon May 13, 2013 9:20 am
Forum: Personal Investments
Topic: Mother found dream house - spending too much?
Replies: 15
Views: 2052

Re: Mother found dream house - spending too much?

I believe her pension is partly inflation adjusted - according to the CPI I presume.

She is in good health and is fit. Obviosuly you do not know what is around the corner but she is healthy and I would guess that she will live for a long time. She turns 63 years old in July.

We have the NHS here for healthcare and everyone is basically covered. She does not have private health care. Everyone is covered anyway. The pension will still cover the increase in costs in the new house.
by LondonJimmy
Mon May 13, 2013 9:03 am
Forum: Personal Investments
Topic: Mother found dream house - spending too much?
Replies: 15
Views: 2052

Re: Mother found dream house - spending too much?

ieee488 wrote:What if she no longer can live independently, will her pension be able to cover several years of assisted living?

I agree that buying a more expensive house is crazy considering she has no other assets.

No it wouldn't.

That makes me wonder what percentage of wealth people usually have in their house. I always thought it was the majority of it.

She wtill would have 265k in cash left over if she sold her house - or a house with rental income if she keeps it.
by LondonJimmy
Mon May 13, 2013 8:54 am
Forum: Personal Investments
Topic: Mother found dream house - spending too much?
Replies: 15
Views: 2052

Re: Mother found dream house - spending too much?

OverTheHill wrote:To answer this question, it would be good to know her living expenses and total investable assets apart from her real property. Unless she has a whole lot of money somewhere, buying this new house seems like a totally crazy idea. If she has sufficient investable assets, then buying the house might make sense. Only you guys know the answer.
I can get back to you on her living expenses. It is basically covered by her pension.

Her total investable assets are simply her house now and her cash.

Why does it seem like a crazy idea? Is it because she would have all her eggs in one basket (real estate)? We are based in London and long-term real estate should go up....but she won't have any stocks or bonds etc.

Thanks.
by LondonJimmy
Mon May 13, 2013 8:42 am
Forum: Personal Investments
Topic: Mother found dream house - spending too much?
Replies: 15
Views: 2052

Mother found dream house - spending too much?

Hi

My mum has around 565k in cash and owns her own property which is worth around 300k.

She always did want to move (my area has gone downhill) and we found a really nice place in a nice area. The house costs 600k.

So she has around 865k in equity.

A) Do you think she should keep her house and me and my sister can take a small mortgage on the new house (say for 100k or slightly more)? We can then rent her house out and keep it.

B) Sell her house now and buy the new house in cash. That will leave her around 265k in cash. She can then invest this in something like the three fund portfolio.

C) Advise her against buying (although she seems to have enough money imo).

She gets a pension which covers her cost of living.

Thank you.
by LondonJimmy
Fri May 10, 2013 9:45 am
Forum: Investing - Theory, News & General
Topic: Austerity in UK - Do I try timing the market?
Replies: 22
Views: 2234

Re: Austerity in UK - Do I try timing the market?

Thanks a lot LadyGeek.

I will have a proper study.
by LondonJimmy
Fri May 10, 2013 9:08 am
Forum: Investing - Theory, News & General
Topic: Austerity in UK - Do I try timing the market?
Replies: 22
Views: 2234

Re: Austerity in UK - Do I try timing the market?

wriggly wrote:VWRL provides access to all stocks in developed countries, but no access to stocks in emerging countries.

Is this true?

From Vanguard:

"This Fund seeks to provide long-term growth of capital by tracking the
performance of the Index, a market-capitalisation weighted index of
common stocks of large and mid cap companies in developed and
emerging countries
"

So would investing in emerging markets seperately still make sense?
by LondonJimmy
Thu May 09, 2013 10:35 am
Forum: Investing - Theory, News & General
Topic: Austerity in UK - Do I try timing the market?
Replies: 22
Views: 2234

Re: Austerity in UK - Do I try timing the market?

With 90% in equities, you could easily lose 45% of your money in a short space of time. Happy to enjoy that level of risk? I have a very very strong stomach for risk. This is one of the things that attracted me to this forum - if I follow the advice I will control myself. I recently had 50% of my net worth (which is a large amount) in gold and silver LOL!. Anyway, losing 45% wouldn't make me happy, but I wouldn't be that bothered as it would be in an index - so over time I would feel very confident of making it back since I am just holding it. As I get older I would accumulate more and more bonds. Thanks for making the interesting point about not being sure if EM pays for the extra risk. I will think about it. I think I have to run over nu...
by LondonJimmy
Thu May 09, 2013 8:14 am
Forum: Investing - Theory, News & General
Topic: Austerity in UK - Do I try timing the market?
Replies: 22
Views: 2234

Re: Austerity in UK - Do I try timing the market?

Thanks for all of the replies.

I am thinking something along the lines of 10-20 % in U.K. Government Bond ETF - VGOV, 20-30% FTSE Emerging Markets ETF - VFEM and 60% in FTSE All-World ETF - VWRL.

I am not really sure why people hold an Index mutual fund instead of an Exchange-traded fund. I thought the fees for an ETF were lower.
by LondonJimmy
Thu May 09, 2013 4:32 am
Forum: Investing - Theory, News & General
Topic: The Three-Fund Portfolio
Replies: 3898
Views: 2434931

Re: The Three Fund Portfolio

What do people here think of the portfolio I want to have?

I am 29 years old and want to invest a lump sum in 30% bonds, 70% stocks. I am from the UK and this will be from a long-term perspective.

I was thinking simply 30% in U.K. Government Bond ETF - VGOV, and 70% in FTSE All-World ETF - VWRL. Could also add emerging markets too and maybe hold less bonds?

Out of curiosity, why would some people hold an Index mutual fund instead of an Exchange-traded fund? I thought the fees for an ETF were lower.
by LondonJimmy
Wed May 08, 2013 10:24 am
Forum: Investing - Theory, News & General
Topic: Austerity in UK - Do I try timing the market?
Replies: 22
Views: 2234

Re: Austerity in UK - Do I try timing the market?

Sorry to ask a silly question, but wouldn't it be a two fun portfolio if I invest in VWRL and say, VBMFX?

Would anyone recommend investing another fund for stocks? VWRL looks to have it pretty covered. I just saw in another thread something about total stock market, total international, and total bond market.

Thanks again.
by LondonJimmy
Wed May 08, 2013 8:08 am
Forum: Investing - Theory, News & General
Topic: Austerity in UK - Do I try timing the market?
Replies: 22
Views: 2234

Re: Austerity in UK - Do I try timing the market?

Thanks for all the excellent replies everyone. I will look into exactly what is said and also post what I do. I really like the advice that you have given to me.

Just to discuss the austerity (which I would usually be for) I believe all the cases where it works is with either a) we have had much higher interest rates and could have brought them down, and b) where there was a major currency devaluation which helped exports. However, we can't devalue our currency due to there being no currency to devalue against. Thus we have everyone, the private sector and government, slashing at the same time which leads to no competition for resources and a depression.
by LondonJimmy
Wed May 08, 2013 4:47 am
Forum: Investing - Theory, News & General
Topic: Austerity in UK - Do I try timing the market?
Replies: 22
Views: 2234

Austerity in UK - Do I try timing the market?

So there is a great debate whether we need stimulus of austerity in our current climate. I am generally of the view that we need stimulus now and worry about making cuts when employment picks up. We have seen European countries facing massive trouble with austerity and the economy getting worse. I live in the UK and the government seems adamant on getting the debt down. This leads to unemployment and resources not being used. This could depress the economy. If we take away stimulus stock prices will fall. They are already high in nominal terms. This leads me to my question. I am 28 years old and have a fairly large amount to invest. I want a low cost index-fund like from Vanguard and I will follow the three-find portfolio. 1) Since this wil...
by LondonJimmy
Thu Apr 25, 2013 3:58 am
Forum: Personal Investments
Topic: Friend is inheriting money and needs investing advice
Replies: 4
Views: 1044

Re: Friend is inheriting money and needs investing advice

I spoke to my friend. The parents will work out anything that they possibly might need. For example, I think they might move houses. If they do, they could keep their existing house and rent it out, and then basically buy another one paying the vast majority in cash and then owning a small amount. They would have income off their existing property to pay the small mortgage left. Then again they might not move, in which case a large sum will be invested in the son and daughters name. This leads me to three questions. 1. From a long-term point of view, if they do move houses, would it generally be better to sell their existing house and buy a new one by paying in full with cash, then investing the rest in something like the Three Fund Portfol...