I wrote on Monevator here about the possibility of investing in City of London back in mid-2008. It was yielding a lovely 5% at the time.

Do you have any examples?
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Be warned, this is NOT a high yield portfolio equivalent. People who bought it as a cheap income fund were severely burned in the bear market. It’s more like a play on beaten down markets and recovery, with High Yield acting as a signal.

Personally I think it’s hard to beat a good Income Investment Trust on a discount if you want someone to manage a portfolio of decent yielding shares for you. If you can buy when the discount is very high due to panicky conditions you can take away some of the fee pain over the long-term, too.

Do you know of any index/etf ‘s that track the top yielding shares from the UK/Europe/US/Japan?

Thank you
.-= David de Souza on: Tax Rebate Scam Emails Continue – Beware - =-.

In investing terms, I’m glad I saw a couple of small caps blow up on me early on in me investing days. One was was down to fraud – totally unknowable. Anyone who puts all their money into one (or even a tiny handful) of listed companies better hope they never learn the lesson that you can’t 100% trust any directors. (I was pretty diversified, happily enough).

In terms of financial advisers, I think a lot of people never even realizing what they’re losing from the relationship. Same thing with expensively managed pensions. Or by the time they do, their working life is over – too late.

THE INVESTOR .. have you noticed though , alot of the greatest lessons we learn in life do come from painful experience of loss , the pain itself either paralysing us into inaction or forcing a change

That isn’t to say we cannot learn useful things from others , it’s just that paradoxically loss maybe the exact thing we sometimes need

Maybe that’s abit contrarian to this article though

I’m glad this route has worked out for you, and if you’re going to invest in managed funds then discounts from the supermarkets is definitely the way forward, I agree. It keeps the Financial Adviser’s hand out of your pocket, as well as refunding other initial charges.

However I still think it’s a poor strategy for new investors.

Even leaving aside the known problems of picking fund managers (costs, survivorship bias, style drift etc) I think new investors are paradoxically the *least* likely to be able to hone in on decent managers. There are thousands of managed funds available to UK investors and, what, less than 100 that have delivered over the medium to long term? The chances of a new investor (or even an older one, but that’s another matter) picking a winner is in my view extremely slim.

To get around this, some investors buy several funds, but then you’ve basically created a pseudo-tracker but with much higher annual charges. If you’re going to invest in managed funds, conviction holdings are required in my view.

Incidentally, if you like Woodford you might want to look at the Edinburgh Investment Trust, which is run by him in his usual fashion and on a big discount at the moment so cheaper than buying the managed fund. (It’s carrying some expensive debt though, as a caveat).

Thanks for presenting the other side with your comments, and each to their own!

I agree that simple is best. Indexing is the simple approach to stock investing. I don’t believe in Buy-and-Hold (ignoring valuations when setting your stock allocation). Investors need to have confidence in their plans and I don’t think it is possible to maintain confidence in a plan that does not call for allocation changes in response to big price changes. So I would advise a newcomer to consider a modified approach to indexing in which valuations are taken into account (Valuation-Informed Indexing).

Rob