Investment funds advice

laoisman11

Looking for advice on investment funds.......

Mid-30's, currently based in France, searching for employment here. Have €40k to invest, will need to keep it accessible as will either build/buy here in the next 2-3 years, or will have to move elsewhere for work in the next year.

I could only claim to have peripheral knowledge about investment funds, but am nervous about limited knowledge being a dangerous thing! Definitely wouldn't know enough to have a feeling for which way individual stocks or currencies might go. Have been checking out different investment funds, looking to invest in med-high risk in emerging markets, green energy, industry.

Apart from looking at the fund's details on their website, is there anywhere else I should be looking for back-up information?
Often the funds give Morningstar rating - what does this signify exactly?
If a fund has performed extremely well in the previous 6-12 months, would you generally give it a skip? (sorry, I realise that's a very broad question)

Have come across this one http://www.dwsinvestments.fr/MediaLibrary/Document/000330_FR_fr.pdf which seems interesting (sorry, in French), one downside is that 14% is invested in Russia, and I don't think things will be politically stable there for the next 5-10 years.

Would like to achieve 10-15% p.a., and looking to spread the €40k over 8-10 funds.

All advice appreciated. Just to add, I don't feel I have the time to build up the knowledge to go for individual stocks, so am happy enough with the investment funds route.

pog it

The majority of investment funds will charge you in and out fees, commission, etc. so 8-10 funds sounds like a lot for 40k and anyway why be so insistent on investment funds? So many people have gained so little or lost a lot investing in this way that unless you are an insider/lucky/good timing with luck it's risky and not worthwhile business. You could end up with just 6% on it.

If you change your mind about being open to individual stocks let us know.

Why not start researching yourself though? 40k is an excellent base point and well worth reading and learning for yourself and finding out what works for you.

laoisman11

pog it wrote: »

The majority of investment funds will charge you in and out fees, commission, etc. so 8-10 funds sounds like a lot for 40k and anyway why be so insistent on investment funds? So many people have gained so little or lost a lot investing in this way that unless you are an insider/lucky/good timing with luck it's risky and not worthwhile business. You could end up with just 6% on it.

If you change your mind about being open to individual stocks let us know.

Why not start researching yourself though? 40k is an excellent base point and well worth reading and learning for yourself and finding out what works for you.

I suppose I don't feel confident enough to invest in individual stocks at the moment, and I want to do something with the money rather than leave it sit around, or stuck in a deposit a/c for a 2 or 3 yr term. My first dip into shares (BoI) was a disaster (to put it mildly).

I feel I really need to learn a lot more about trading, and am willing to lose a few % pts to investment brokers at this time. And yes, 8-10 funds is a bit extreme in retrospect.

But seeing as I have a lot of spare time on my hands at the moment (the benefits of unemployment ) where would you suggest I start?

pog it

I'm off for the weekend now but a quick message.

You have loads of options- you could consider investing at least some of it in stocks and then place another portion in a high deposit rate type account?

Pocketdooz mentioned high rate airport bonds a while back, maybe do a search on this forum and find that info- that could make up the guaranteed part of your portfolio.

Reading-wise, get reading as widely as possible.

FT, Wall Street Journal, www.zerohedge.com, www.fool.com, www.marketoracle.co.uk.


There is an excellent financial paper Dagens Industri in Sweden:

http://www.di.se

It's in Swedish and they don't translate it into English themselves but you can download Google Translate and have the whole site translated in a click.. they do good coverage and stock tips also.

A few months of reading all these various sources and you'll have a much better idea- you'll have your own reading at the end of it.

Eddie Hobbs has a newsletter Eddie's Rocket that you can sign up for and also get the magazine.

Honestly.. it all helps.

But lastly, be wary in general at the moment, commodities are on the up and there are a lot of unknowns in the stock/bonds/funds markets
So you couldn't be researching at a better time!

Bonne chance!

laoisman11

Merci pog it, plenty of reading material there.

I'm struggling a bit though for the basics on shares/share markets (how to analyse financial reports etc.). It's a long time since I did accountancy/commerce in school, but will read up on it over the coming week. Might be back on to you soon, if you don't mind.

Merci encore.

Raskolnikov

laoisman11 wrote: »

I suppose I don't feel confident enough to invest in individual stocks at the moment, and I want to do something with the money rather than leave it sit around, or stuck in a deposit a/c for a 2 or 3 yr term. My first dip into shares (BoI) was a disaster (to put it mildly).

I feel I really need to learn a lot more about trading, and am willing to lose a few % pts to investment brokers at this time. And yes, 8-10 funds is a bit extreme in retrospect.

But seeing as I have a lot of spare time on my hands at the moment (the benefits of unemployment ) where would you suggest I start?

8-10 funds is definitely too much. I would even go as far as saying that 1 fund is too much (over an extended period, 95% of funds will fail to outperform the average).

Secondly, you want to avoid trading. I have several years of experience with the stock market at this stage, but if I was to try and "trade" stocks in the short-term (time period less than a year) I would lose money. 95% of investors are awful short-term traders, it's only over the long-term that an individual investor has a chance at out-performing.

Finally, remember that boring is beautiful. If you watch CNBC or read stock market sites like morningstar.com, you'll see a gazillion articles on stocks like Amazon and Apple. People love speculating about tangible, exciting things like Kindle's and iPad's. Inevitably, this means that stocks like Amazon and Kindle get bidded up to ridiculous prices. If history is anything to go by, "hot stocks" that are favoured by the general populace are usually lousy performers over a long-term period.

Before you buy any stocks, you need to invest in a few books. For a complete beginer, I would recommend these books.

Beating the Street - Peter Lynch: Peter Lynch was fund manager who got rich by buying things that were out of favour and selling them when they recovered.
You Too Can Be a Stock Market Genius - Joel Greenblatt: Ok, the title is completely ridiculous, but Joel Greenblatt has a long history of out-performing the market. In his book, he's essentially talking about buying out of favour stocks at a low price and selling high.
Financial Statements: A Step-by-Step Guide - Tomas Ittelson: This is the only book I've ever bought on analysing balance sheet statements and I found it more than adequate.

These are about as basic books as you can get on the stock market so if you can't get through these, investing isn't for you.

laoisman11

thanks for the advice pog it and raskolnikov, I've pondered over this long enough, it's time to do something.

I've put in my order today for the books recommended by raskolnikov, and have had a quick look at the websites recommended by pog it - they're all bookmarked now for daily reading. Haven't figured out how to get google translate to work yet on the swedish page as the webpage seems to be in flash?? format but will keep trying it.

Cheers again guys, I'm sure I'll be back with one or two(!!) questions.

pog it

The Dagens Industri site won't work with a single click of Google Translate anymore- any attempt to Google Translate defaults back to an advertisement!

If anyone knows how to get around this, please let me know!

dunkamania

your time horizon is too short to be looking at these kind of investments. you should be keeping the bulk of it in cash/bonds

pog it

dunkamania wrote: »

your time horizon is too short to be looking at these kind of investments. you should be keeping the bulk of it in cash/bonds

Bonds are also dangerous territory- as soon as they look good or safe, watch out. But if you have specific recommendations, it would be better for you to name them specifically- broad sweeping 'buy bonds' isn't much help if you don't know much about them!

This is why it is best for OP to hold back until he knows properly what he is doing and what's going on in the markets! Fools rush in.