Withstanding the pain!

Hi everbody,
Boy do I wish I knew about this website, before I first started investing. It is well made and well thought out.
Anyway, I am new. I'm in my early 40's and have a disability. In late September 2008 I put all my money into a mastertrust of managed funds. Currently the All Ords is down 1100 from where I bought in.
So far the distributions have equalled the fee's needed to buy in. As this is my only source of income+a small pension, I've had to draw on the funds.
I understand that nobody can predict the future and it was my choice to do what I did. I live a simple life, split between friends and church. While I can read and enjoy "Ascent of Money" most investing books are too heavy.
My funds have gone down from the moment I've had them. Yes I have a budget, Yes I am a spendthrift, No I don't have any debt or card debt. I don't drink, smoke, gamble, go out, buy clothes or own a car. But my funds have been sinking from the moment they hit the water. I don't know how I can withstand the pain. Where do I go from here?


Johny.

This too shall pass.

Live as modestly as you can.

Try to avoid dipping into your capital as much as possible.

Borrow audiobooks & CDs from your local library to increase your financial literacy.

Good luck with it.

Cheers
N

I've looked at my budget, but there isn't much fat I can trim. I guess it is just a matter of how long the period of low distributions lasts. At least I won't be paying much tax this year! My landlord is giving me another years lease (with only a $5 increase).

Some years ago, I learned about credit cards the hard way. I got trapped by a $7K debt and no way to service it. A (very) nice relative payed it all off. Even though so many people have been caught out by the financial crisis, I still feel shame for my underperforming funds. I know I will not be bailed out again!


Johny

Could anyone tell me what the effect of having a wholsale fund against a retail fund over time is?

Thanks, Johny

Hi Johny,

Wholesale managed funds usually have a higher minimum dollar investment value (anywhere from $25k to $500k depending on the fund manager) with a lower ongoing management cost. Find through most wrap services are wholesale though you get charged the wrap administration fee.

Retail managed funds usually have a lower minimum dollar investment value (from $1,000 or $2,000 usually) though a higher ongoing management cost.

As an example, the Advance Australian Shares Multiblend Retail is 1.95% pa ongoing Management Expense Ratio (MER) http://www.advance.com.au/resources/...stment_1_1.pdf page 21 Minimum investment of $1,500

The Advance Australian Shares Multiblend Wholesale is 0.92% pa ongoing Management Expense Ratio (MER) http://www.advance.com.au/resources/...stment_1_1.pdf page 21 Minimum investment of $50,000

Cheers,

Dan

PS This is general information, before making an investment decision speak to your FPA registered Financial Planner.

I have been reading, quite extensively, through old threads (Compleks) ect. and have not heard anybody mention asset allocation. Is there some reason?

Johny.

What is the best way to get exposure to India and China? How long have Ishares been Operating?


Thanks, Johny.

There are a few managed funds which invest in India and/or China. One of the better ones (in my opinion) is Platinum Asia which invests across the entire region. Not a recommendation to invest - do your own due dilligence.

There are also more focussed funds if you prefer to target a specific country - some of the iShares ETF do that I think. I haven't researched them yet, so I can't really comment about them.

Checked out Platinum. It has been very volatile, but has shot up rapidly since march. It seems to be a value fund following the msci asia. My question is this: The income for 09 is 16.5% yet the previous year was near 0%. Do funds hold their distributions when there is a economic slide?

Johny.

Checked out ifa.com 's and spent 1/2 hour on their risk evaluator. The program said I was taking on way too much risk, and that I should go from growth to conservative. Dunno, but sure was flash software! You tried it?

Johny.