1st time buying shares

Thanks for the share, great link.

Cheers

 

Sorry to point out the obvious...but I suggest from the OP this is someone new to this and looking for a bit of general advice from the more experienced such as those like yourself who have been shorting the market for 1.5m at a time. I thought the idea of this forum was to share and encourage not make 1 line remarks that probably don’t help the OP.

As I said sorry if I’m staring the obvious to you...if I’m not then...

 

Well it’ll give him/her the impulse to rethink. Besides it’s just my view - maybe it turns out to be great

 

Horrible advice

 

here is a really good short podcast series that will answer most of your early questions.

Get Started Investing with Equity Mates

 

Ahahahahah why

 

Every investor should invest in accordance with their knowledge, capital, risk profile and investment strategy.

For a 30 to 40 year hold, I would not touch.a managed fund. I would go index all the way.

index funds tend to perform better over the long term than actively managed funds, making them ideal for people investing for retirement.

Index funds are more popular than ever—here's why they're a smart investment

lol

 

Wow completely disagree. For a 30-40 year old I would absolutely go an actively managed fund

The articles and broad bushed statements you talk about are based on the entire universe of active fund managers. Of course there are lots of duds in there, like the Goldsky guy. But if you stick with the top proven names - like Paradice - as I said, who I think has been punching around 20% IRR over 20 years, that extra 10% compared with an index fund will make you many times richer than investing in an index fund.

Also if your target is just 10% I’d rsther chuck my money into something like Valarah with monthly liquidity that makes 9-10%.

 

You are entitled to your opinion.

There has been a lot of research into whether managed funds beat index funds over time and there are also other disadvantages to managed funds that a first time share buyer should be aware of (and wouldn't be). Everyone should share what they know then the first time share buyer can make up thier own mind.

Bottom Line
As with many investment decisions, the best type of funds to buy depends on the individual's personal circumstances and financial objectives. While history shows that there are good active managers, finding such managers in advance of their out-performance is difficult. Since index funds have historically beaten the majority actively-managed funds for periods of 10 years or more, long-term investors should seriously consider passive investing.

Compare Index Funds to Actively-Managed Funds

 

Well as I said the research is based on a large universe of active managers. That’s why you pick the ones with consistent record over a long period of time. But if you’re happy with 10-11% IRR good on you.

 

I can't access this article but I would love to read it

Losses turn ugly for top boutique funds | The Australian 25 Nov 2019 · Firms controlled by prominent fund managers such as Peter Cooper, Anton Tagliaferro and David Paradice were...

NoCookies | The Australian

EDIT: got it. Looks like a mixed bag



Australia’s most successful boutique fund and asset managers have suffered big profit falls and falling dividends as a volatile market took its toll on their financial results.

The accounts of the privately owned firms, some of which are controlled by rich-list members and others by little-known portfolio managers, reveal the net profits of 10 firms fell by 10 per cent in 2019.

Some defied the tougher times on the market. Firms controlled by prominent fund managers such as Peter Cooper, Anton Tagliaferro and David Paradice were among the big earners, though there were some little-known names that paid themselves huge dividends.

Ashok Jacob, the founder of Ellerston Capital and a respected name in the investment market, recorded a net loss in 2019, accounts for his company showed.

Ellerston Capital, backed by billionaire James Packer, suffered a $2.2m loss for the 12 months to June 30, after making a net profit of $2.98m in the previous year.

Performance fees for Mr Jacob’s firm fell from $11.6m in 2018 to only $558,900, while management fees fell about $2m to $29m.

Ellerston has faced some investor backlash regarding its listed investment company Ellerston Global Investments, which has been trading at a discount to its net tangible assets. Mr Jacob said earlier this month he was “not prepared to tolerate the discount” and was restructuring his LIC into an unlisted trust.

His private investment company Ellerston paid a $1.48m dividend for the 2019 financial year, down from $3.32m a year ago.

Elsewhere, prominent fund managers such as Paradice Investment Management, Vinva and Greencape Capital all recorded profit and revenue falls.

David Paradice’s eponymous firm had its revenue drop more than $50m in the year to finish at $85m. Though his firm’s profit fell from $55m to $38m, the result was still the biggest among the boutique fund managers.

Mr Paradice has opened a new Paradice Emerging Markets Fund, run out of San Francisco by recruits Edward Su and Michael Roberge. The fund started in May and has already recorded a 15.13 per cent return, outperforming the MSCI Emerging Markets Index by 5.36 per cent in that time.

Peter Cooper, another member of The List — Australia’s Richest 250, received the bulk of the $28m dividend his firm paid after recorded a $4m increase in revenue to $29.5m for 2019.

But David Pace and Matthew Ryland’s Greencape saw its revenue fall from $62m in 2018 to $39m, while profit fell about $12m to $20m.

Greencape paid its founder shareholders a $32m dividend, up from $19m last year. The firm garnered performance fees of only $137,877 in 2019, compared with $28m a year earlier.

Another firm to suffer a revenue and profit decline was Vinva, a quant-driven fund which keeps a low profile but manages money for some of Australia’s biggest funds.

Established by a team led by managing director and head of equity investments Morry Waked after he left BlackRock in 2010, Vinva had about $28.7bn in funds under management at June 30, according to its financial accounts. Only $973,360 of that was in global stocks. The group oversees a combination of active long-only and long-short strategies.

Vinva paid Waked and his shareholders and management team, including ex-Blackrock employees Nick Burt and Andrew Jackson, dividends of $31m in November last year in relation to its 2018 financial year, down from $49m the year before. A decline in performance fees contributed to a net profit fall of about $4m for 2019 to almost $27.2m.

Paul Moore’s PM Capital also suffered a net profit fall, though Maple-Brown Abbot and Investors Mutual were among the firms to enjoy profit rises.

 

David Paradice set to break the $10 billion fund mark 2015 article. “The fund has made about 10.5 per cent in the last quarter and 19.7 annually since inception, having been formed in July 2010 after a chance meeting on holidays between Mr Paradice and Denver-based portfolio manager Kevin Beck.” That extra 9-10% over 15 years would’ve made you how much more money? We all property guys we know how compound works.

His main fund is his small cap fund which I believe is founded around 2000. There’s a bunch of other funds but kind of not his bread and butter.

Its like L1’s long short. If you been around you’d be on 25-30% IRR not withstanding he’s had a horrible 12 months. I mean these guys don’t deliver exceptional returns every year, you need to ride out the fund’s returns.

 

You need to know what his flagship fund is. What these guys do is have 1-2 really good funds, and then stick a brand over a bunch of other funds.

 

any article > google : search "link address"

Boom works

 

Good point. I don't have a clue, which is another reason why people like me should not invest in products we don't understand. I'll leave that to the pros.

It is still good to have the discussion.

Every investor must do their own research and undertake their own due diligence.

They also need to invest in line with their goals and financial strategy. You can suggest this fund or that fund but you really don't know if that is a suitable investment for a particular investors unless you know what that investor's financial goals are.

 

haha this has come very true for me in the property game. it is hell on the ground with property. with exchange its hell on the screen that's for sure..

 

The title of this thread is 1st time buying shares. I think the more experienced investors need to remember that we all need to start somewhere. So maybe an investor should not be trying to short the market as their first foray into share investing. They need to learn to walk before they try to sprint.

When I started out in property investing, I purchased a 2 bedroom unit. It was great for me because it was low cost, low risk and provided reliable income. Of course the returns were not spectacular, but with my knowledge, capital and risk profile, a unit was a suitable investment. Over time, I have developed my knowledge and capital and I am in a position where I can take on more debt and more risk. I would not touch a unit now, but that doesn't mean that units are bad investments for all investors.

My most recent acquisition was a triplex potential site with an existing dwelling to be retained. I have already added one house to the site and have the option of demolishing the existing house and building two additional houses in the future, and the numbers look great for this type of re-development.

This was a great investment for me at this stage of my property investing but I would not suggest that every first time property investor buy a three unit development site.

We all have to start somewhere and I don't think the more advanced type investments are always suitable for first time investors.

 

View attachment 36831

Here is the Paradice Large Cap Fund vs VAS (Vanguard Index) fund over the past year (based on Sharesight figures).

I struggle to see any advantage from the active management.



Here is the Small Cap fund:



Small caps is often stated here to be an area where active management can be of value.

Not, it seems, in this case.

Here's what you'd be hoping for:

 

Good graphs. I have been tossing up between VAS and STW. Considering I am investing for income, I'm not sure how the dividends and franking differ between the two. I assume the increase/decrease in price should align fairly closely with the underlying index over time?