FROM THE EDITOR
Hityourinvestment goals with our 2018RatedFunds
Welcome to this third annual edition of Your Fund Choices.We believe it will give you valuable assistance and tips towards reaching your investing goals.
Going your own way in the investment world can be a bit daunting.Now, more than ever,we need some help in an era when individually tailored financial advice is beyond the means of all but a privileged few. We can’t know your own individual financial circumstances,but with the features and profiles inside Your Fund Choices we have put ourselves in the position of typical private investors, to help you on the long slog to financial security and wellbeing.
You may be among the many who invest in funds simply because you want to put savings to work and,eventually,amass a decent pot.Even this aim can be difficult to achieve:it’s not usually as simple as looking at what’s currently topping the shorter-term performance charts.
DIVERSIFICATION ISCRUCIAL Nevertheless,this is an approach to investing that has worked well for many investors in recent years,because of the global bull market that has been running since March 2009 – the second longest on record. However,it does mean there is a heightened risk of piling into the top of the market just before it goes sour.Some investors might then lose their confidence,sell and crystallise losses at the worst possible time, rather than waiting for a recovery.
Having some diversity in what you invest in – from equities to bonds,property and alternative assets – is paramount in today’s market conditions.This is where our asset allocation feature (page 8) can provide valuable pointers and specific suggestions on ideal funds for the job.
Your Fund Choices can make you a better-informed and wealthier private investor
Similar sentiments apply to investors seeking to draw an income from investments.Ensuring you have a decent mix of funds and asset classes is crucial in this ongoing age of ‘yield compression’.The feature on how to invest for a £10,000 annual income may be something of an eye-opener for some,not least because of the capital sum we suggest you will need to achieve that goal.
Whether your aims are to grow your capital or secure a decent income,Your Fund Choices can help you in your investment challenge. Its core focus is a list of what we think are among the best actively managed and passive index-tracking funds (199 actively managed Rated Funds whittled down from a universe of around 3,500,plus 63
passive Rated Funds,including exchange-traded funds).
But we have also sought to demystify some of the industry jargon that can make investing more daunting.One way we have done that is to present our Rated Funds in 15 easy-to-understand asset groups, with further sub-divisions into ‘core’and ‘adventurous’categories,as well as growth and income choices,where appropriate.
Money Observer , the publication that supplied the investing knowhow behind the selection of Rated Funds,has long championed the oft-overlooked and under-promoted merits of investment trusts,so where possible we have ensured that a decent selection of trusts are represented in the Rated Fund asset groups. Self-directed investors should be better fund-pickers by referencing this select list, rather than by ‘pinning the tail on the performance donkey’or excluding investment trusts in their search.
We also regularly monitor the performance of Rated Funds;the fastest way for you to keep up to date is via Money Observer ’s thriceweekly newsletter.Sign up at www.moneyobserver.com/e-update.You can also monitor the day-to-day performance of all Rated Funds on the Money Observer website.There are bespoke factsheets for all funds, and you can browse by asset group or by top and bottom performers. Visit www.moneyobserver.com/rated-funds-2018.
Finally,please bear in mind that successful investing is a blend of art and science.There are no guarantees that what is going up will continue to do so,or vice versa.But we confidently predict that Your Fund Choices can help make you a better-informed and wealthier private investor. Andrew Pitts, Rated Funds editor
The author was editor of Money Observer from 1998 to 2015. He holds 14 of the 2018 Rated Funds in his Isa or Sipp
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