All Topics / Hotch Potch / Managed funds the go?

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  • Profile photo of brisbanebrisbane
    Participant
    @brisbane
    Join Date: 2003
    Post Count: 2

    Hi

    I’m new at this, hope somebody can help. I’m looking at investing in managed funds (Navigator)and am wondering if others have found mf’s more worthwhile than shares. Also my partner is in the higher tax bracket, should we put the investment in his name? If we put it in both names do we have to split the tax benefits 50/50?

    [:)]
    Thanks

    Profile photo of jezjez
    Member
    @jez
    Join Date: 2003
    Post Count: 31

    Personally I wouldn’t invest in managed funds. They’re diversified to the max so growth is as low as possible, you don’t get a huge return on your investment at the end of the day, you have no control over how your money is invested and you’re still not 100% safe.

    If you can invest in property then do. If you’re not going to invest in property or anything else though, you may be better off having your money in a managed fund instead of having it sitting in a bank account where interest doesn’t even cover inflation.


    Jeremy Lunn
    Melbourne

    Profile photo of crashycrashy
    Participant
    @crashy
    Join Date: 2003
    Post Count: 736

    Until recently, unless you knew which specific shares to invest in, a managed fund was the only option for the average investor. With the introduction of index CFD’s, it is now possible to invest in any market or sector. Fund managers rarely outperform the benchmark index, in fact it is well known that 80% of fund managers under-perform the index. Fund managers are disadvantaged in numerous ways. Firstly, their fund is forced to be weighted similarly to the index. This in effect means they must buy what is going up, and sell what is going down. As a result they often buy the top and sell the bottom. Secondly, their large size means they must buy and sell large amounts. This volume affects the market, meaning they pay more when buying and get less when selling. The large volumes required mean they must trade in high cap liquid stocks, missing many opportunities in smaller, more volatile stocks.

    http://www.posigear.8k.com

    Profile photo of ez-rentez-rent
    Member
    @ez-rent
    Join Date: 2003
    Post Count: 139

    Crashy is dead right..

    Many active funds are wusses. To beat the index takes skill and risk. WIth increased risk means you may get 30% in one year and -25% the next. Many funds will hug the index in bad times so that they don’t look like they are doing too bad. But then logic tells you that why pay extra fees for a fund that hugs an index?

    I found this to be a good writeup on funds..

    http://www.travismorien.com/investment.ppt

    [email protected]

    EZ-Rent. The free tax and cashflow simulator for Australian property investors.
    http://www.ez-rent.com

    Profile photo of pinit2000pinit2000
    Member
    @pinit2000
    Join Date: 2003
    Post Count: 85

    Navigator? Ouch!

    Wouldn’t suprise me if your financial adviser advised you to put your money there.

    Don’t! You will loose so much money in fees.

    The best advice I could give you now is to educate yourself. (and yes it takes time but will be worth it in the long run.)

    If you are going to go into property remember the 3 most important rules:
    1) Location
    2) Location
    3) Where it is!

    Pin

    P.S: Incase people take me too seriously the “3 important rules” ARE important, but there is a lot more to it than that.

    Profile photo of xyzzyxyzzy
    Participant
    @xyzzy
    Join Date: 2003
    Post Count: 178

    And in shares the most important rule is to avoid having a long term portfolio because you have made a short term mistake

    Profile photo of brisbanebrisbane
    Participant
    @brisbane
    Join Date: 2003
    Post Count: 2

    Thanks guys

    I appreciate your comments.

    Profile photo of bribiebribie
    Participant
    @bribie
    Join Date: 2003
    Post Count: 67

    brisbane welcome – good to see someone else from brisvegas. I agree withe the other comments about navigator and managed funds but to answer your other question, it would generally be more beneficial to have the investment in the name of the higher income earner if you are looking at claiming interest deductions etc

    bribie

    Profile photo of wayneLwayneL
    Member
    @waynel
    Join Date: 2003
    Post Count: 585

    quote:


    And in shares the most important rule is to avoid having a long term portfolio because you have made a short term mistake


    Amen[:)]

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