Back in the 1988, my dad had to set an appointment to gather advice from his bank manager whom could access a fund manager to get an agreement organise to invest in his funds. Shares and index were not easily accessible in the country of residence. In those days these funds were about 10-15% charges. I told my dad to sack his bank manager fifteen years later.*Please note that my reference of ‘FUND MANAGER’ is the high street supermarket funds which are publicly accessible. NOT the Fund manager which are invitational only to the rich boys club*
With advance mobile technology and fast 4G internet in your palms, trading can be executed anywhere in your daily routines. Accommodated with fast news, data analysis apps, watchlist and alerts; traders and investors can easily make decisions to support their next moves.
Warren Buffett always and still advising younger generation to put money in index rather than fund managers.Funds are simply a pot of money raised by high profile manager in various countries to invest in specially hand-picked shares hoping to generate a steady growth over a long period of time. Fund managers always claims to beat the market with their high expensive funds. Many famous fund managers rise to stardom but either long term consistency OR claim to pillow from a financial crash.
Index are slightly different. Managed by a common index to follow the market trend. The timing of an index investment is highly critical to dictate the future growth.
I started this post simply because a friend invested on a share on a good discount which dropped 20% on the trading day. He spend £120 on the trade and didn’t realised the fees was £20 in total. After the trade he was already on a 16% loss instantly. If he spent £1200 on the trade he would still be charge for round about £25 and would only be 2% of the cost.
Share picking may sound straight forward by googling information from the world wide web. If we can spent a little time studying the business, accounts, cash flow, anticipate the future of the company; an investor can potentially save alot of fees from fund managers by tailoring a personal portfolio.
Today I am presenting three different scenario which could have an impact on the decision you make between Funds, Index and individual shares buying. You need to consider the fees as they will make or break your portfolio profits.
- £1,000 for ten years investment
2. 10,000 for ten years investment
3. £100,000 for ten years investment
Lastly, if you have £100,000 to invest and manage to earn a 4.5% dividend yearly and also a small 3% average growth for ten years. You could potentially double the capital in ten years…….
Examples of shares performing in this manner:-
UNILEVER, P&G, Reckitt Benckiser, Diaego and many more.