Investing in funds..how do you research?

techguy

I am using rabodirect to invest in funds at the moment but i'm pretty new to this.. I have invested a few in hundred in both the MLIIF New Energy and the Robeco Lux-o-rente.
The new energy was a bit if a punt, we'll see how it does. And the lux-o-rente was for a bit of security.

My main question is how do you guys choose what to invest in? I know the title of these funds tell you what sector but do ye look into the main holdings in the share and see what they are doing etc?

And if a fund you are interested in takes a bit of fall how do you find out why?

Basically how do you make an educated investment, not just a matter of ok,property,check,energy,check etc...Although I do know it's good to have a well balanced portfolio..

Thanks..

hmmm

techguy wrote:

My main question is how do you guys choose what to invest in? I know the title of these funds tell you what sector but do ye look into the main holdings in the share and see what they are doing etc?

I look at the holdings or fund aims and decide if it's somewhere I want to be invested.

I look at 5 year/10 year returns and disregard any lesser time period.

I look to see whether the manager of the fund is the same as the one who has made the previous returns.

These days though I almost exclusively buy index funds.

Most importantly - are the fees low?

techguy

I see,
There's a few funds on rabo that are going down a few euro in the last week or so..I have been watching one or two of them. Would you ever buy a fund if its after falling a bit because it will surely come back up again?
Is the stock market still falling?

hmmm

techguy wrote:

I see,
There's a few funds on rabo that are going down a few euro in the last week or so..I have been watching one or two of them. Would you ever buy a fund if its after falling a bit because it will surely come back up again?
Is the stock market still falling?

Personally I'd only buy funds with money I can afford to leave for 5 years at a minimum, so I don't pay much attention to short term fluctuations. Nothing ever "surely comes back up" I'm afraid. Most times they will, but you could be years waiting - look at biotech, prices shot up in mid 1990s and have been in the doldrums ever since. It's sexy, goes up 30% one year, drops 30% the next year, but you'd have made more money just sticking it into boring European equities.

On the other hand look at it this way - if you were looking to buy a house for investment purposes and it's price dropped 10% today, wouldn't you be happy? So why do people think its a good time to buy shares and funds only when they've gone up over the previous year?

techguy

I was just thinking that it might be a good time to buy because nearly everything is suffering at the moment.. will these still take ages to recover? Even the blue chips??
At the start of feb I had €2200 and my father said that if I invest it all he will guarantee to €2500 next feb.. I'm thinking 6 funds, 2 low risk,2 medium and 2 high.. about €350 each.. Would this be a good idea??

hmmm

He'll guarantee it? You should put it all on a horse

The market could be high now, so what many people do to try and protect themselves is to put in small amounts every month to even out their contributions. (if the market goes down, you end up buying more shares for your money).

If it was me, I'd open a Quinn Life account and select a similar breakdown of low/medium/high risk funds like you are thinking of. I'd then put in a regular contribution of say €200 a month into Quinn.

Quinn's charges are lower than Rabo (check that first though, particularly check to see if you get charged for regular monthly contributions) and because their funds are index funds in the long term they should be better performers.

SteadyEddie

Tech, Im afraid its close to impossible that you will get those returns in todays current environment. Bear in mind, markets are at the end of close to 3-4 good years of growth. My advice to you is suss out funds that you think could buck the market if everything was going downward. I right now think for example, a new energy fund sounds interesting as I feel growth in the sector looks likely.

techguy

I'm not trying to reach €2500 I think that was more of an incentive for me to learn about the stockmarket and funds etc..I plan on leaving that money in there, for long term unless I really need it.. The money I make from this summer will be left on deposit until this time next year when I will begin to put that into funds/stocks aswell..depending on how the current lot do..Just for the rainy day really.. Better than leaving it all on deposit yes??