Over 80% of active fund managers lose money for their clients after charges are included.
The only reason day traders might win more than half of their bets is because the market has drifted upwards for the last 125 years on average, within a random walk.
Or else they were insider trading, or had non-public information.
On three or four occasions since 1900 the market has stayed down for a decade or more:
WW1?
Great Depression
WW2?
Dot.com boom/GFC?
The best indices to watch are none if you’re an amateur long-term investor.
Otherwise they only made you twitchy when you’re not going to sell when they drop (or when they rise).
The exception to this of course is when you’re in the research phase of making your long-term investment in the first place.
And perhaps when making a biannual or annual review of how things are going.
Ramin Nakisa of pensioncraft is the most brilliant analyst I have ever come across.
His historical and latest videos will run you through the relevant indices with the most insightful analysis you’re likely to come across as far as I know.
Can you advise the provenance of that first statement? It’s usually said that 80%(++) of active fund managers don’t outperform passive index trackers. If a market is rising say 3 or 4% p.a., then charges would be unlikely to wipe out any gains.
There are some successful day traders or personal trading investors, but many either break-even or make losses, as the amounts of capital they can commit within the realms of safety, are relatively small. And trading on ‘insider’ or ‘non-public info’ isn’t anywhere near prolific as some think - and it’s often easily detectable nowadays.
On the subject of funds, how’s that Sharia fund doing now, post the tech market reverse?
In order to answer that you would need to know what their overall goals are in retirement.
After looking after the children, they could think about whether there are any expensive things that they are currently not doing that they would like to do as part of that plan?
Any capital that is not needed for a long time should probably be invested in stock markets which generally have a good return over the long term.
Obviously, you want to get this money into the markets in a tax efficient way, i.e. through ISAs and pensions in the UK.
Right now is probably not the best time to shove a big lump of capital into shares as equities are mostly overvalued by historical measures.
So you could put small amounts in in a tax efficient way on a regular basis, and then keep the main bulk of powder dry and be ready to buy a lot on a correction, bull market, or crash when there is one.
If they want to DIY then Ramin Nakisa of Pensioncraft is excellent for info and analysis.
Yes, apologies, I meant to say that clients will typically lose money investing via active fund managers as opposed to passive, market tracking funds (partly because the fees are almost always higher on actively managed funds and because nobody actually knows what companies the winners will be in future beyond what the market has already priced in, and how to time the market on the way in and the way out).
You had me worried there 
Careful though about using the term ‘lose’, as passive tracker funds (which aren’t 100% passive as they trade to index movements/weightings) are denoted ‘higher risk’ due to their 100% equity component and the market volatility thereof e.g. if you’re retired with modest income v commitments, so you may need access to capital in short order for life’s unexpected events, holding a passive tracker in isolation wouldn’t be recommended.
No he said £80K gross, that is before deduction of tax.
Trackers will eat themselves.
Yes.
That’s why I said above:
“Any capital that is not needed for a long time should probably be invested in stock markets which generally have a good return over the long term.”
Yes, probably so.
But so will stock markets in the current system.
The question is, when will they decisively eat themselves?
And is it sensible to stay out of them now because they may one-day eat themselves?
Almost everyone with a Pension is Directly or indirectly invested in bond and equity markets…
Trackers/ETFs are a useful tool. But eventually the maths doesn’t work.
Sorry Jim, but that is highly incorrect information from a completely uninformed, biased source. (possibly not you). Btw, where did this edict come from, you appear to be more accepting of other’s styles than this.
People who don’t have the mental and emotional fortitude/training/practice, prefer to believe that successful swing-trading is impossible. They require an out, to feel satisfied, and vanquish the fear that they are not making as much investment profit as they could be. Much easier to just disbelieve.
Btw, swing -trading is much different than day-trading. Generally, one is in a swing-trade for one to four weeks, not 1-4 minutes or hours. There are thousands of STs making many millions of dollars a month with less exposure to market fluctuations than Long-term investors.
These very experienced and highly-controlled investors know enough to banish words like ‘hope’ from their investing vocabulary.
I know of a friends’ father who had about $800k in Nortel shares at retirement after working there.
They were initially at $110, and he watched and waited and hoped that they would turn around, right down to $5 and then bankruptcy. This has happened to many long-term investors over the years. They haven’t learned to cut a loss and move on. they want revenge on the market.
This describes most amateur investors, although a lot of forum members seem to have a grasp on some of these important skills.
Jamie definitely has these mastered and, as such, is the calming influence on this thread.
Anyway, food for thought, Jim.
Very true. However, I do believe that of the two reasons you’ve mentioned, the main culprit is the active managers thinking they can consistently guess what the market will do and beat the indices. They will luck-out a few years usually, but really I think Index funds will always outperform their guesses.
Whether the fees are 1 or 1 1/2 %, I don’t think that plays as large a part of the overall process.
I wonder how many people have the fortitude to only review their investments once or twice a year though? I don’t. I’ll check out the video thanks.
I never look unless I’m on the USS site anyway for some other reason.
I’m too busy with work, kids, exercise, and listening to music! 
(Not to mention the vital task of hanging around on this forum).
A sad and familiar tale.
I never suggested that it was wise to invest extremely heavily in one firm’s shares and then cling on forever when that firm has failed to adapt to changing technology.
One thing I absolutely recommend to everyone who is interested in their portfolios, and investments in general, is to read The Intelligent Investor. I have the original book by Benjamin Graham, but it was not a particularly easy read. There is another version of the book written by a disciple of Graham’s, Albert Alan.
This new version is called ‘the intelligent investor for the modern reader’ and is apparently an easier read and a tad more up to date, with information from Warren Buffett as well. I will be getting a copy of this new one and having a re-read of it.
The valuable information in this book is helpful for both experienced investors and new investors, but especially recommended for new investors that haven’t taken any investment courses.
The hardcover can be had on the 'zon $25 CAD, so I suppose about 18 pounds. The paperback of course is less.
Happy reading …
Have deferred taking my NHS pension but am now panicking that the autumn budget is going to take a bite out of my ‘pot’. Trying to decide whether to take it ASAP and accept reduction for early withdrawal or sit it out until December???
Can you say more about why you are feeling that way?
Have you got any good sources of information or speculation about what that budget could contain and is likely to contain?