GoSeigen wrote:Ignoring the sarcasm, anyone who trades without a care about price is a muppet in my book, sorry. I'm not being personal about it.
What sarcasm? When it comes to investing, I am a muppet.
GoSeigen wrote:As for never selling, that is only true for a small subset of investors and you know that.
I have absolutely no idea what you are referring to here?
GoSeigen wrote:It still doesn't stop the poor price problem every time a purchase is made. The fact is if you buy/sell a collective you have no control over the price of the constituents (or indeed the aggregate price if you're "just buying a tracker and never selling it".) If you are trading the components individually you have granular control of the price. If a large number of people participate in this sort of scheme then it is open to abuse profit harvesting by both the sell side and the rest of the market.
Ah - that explains why active funds are so much better than passive ones. (That was sarcasm
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GoSeigen wrote:If anyone hasn't realised it yet -- the whole thrust of my posts on the topic is that ETFs are NOT very low cost and not even low cost. Yes they have low headline fees but my point is that there are hidden costs that need to be taken account of.
Indeed. To my mind, the cost of a tracker is the gap between its performance and the index it tracks. OCF is just part of this, but it's still very small.
GoSeigen wrote:Investing is not a simple thing solved by the magic of buying a tracker and then sitting back and watching the wealth roll in. It is an active process which requires revision of your ideas and continually applying basic principles like avoiding the latest fad.
I used the term "quasi" passive. (e.g. I completely avoided the .com debacle, both up and down. "Truly" passive would be all in a global tracker, I guess, whereas I, and many others, prefer to at least tweak the weightings by using other collectives, added in because I like the price and sold off again when I don't.
I think you are being almost philosophical here whereas I am just concerned with the practicality of generating a pension fund. Would you tell a twenty/thirty/forty-something he (or she of course) should pull back from his family and career responsibilities to develop the knowledge necessary to beat the market with his SIPP, even though he likely won't anyway, or stuff the cash under a mattress, or buy some trackers? They are basically the options for many of us. I fully accept that global trackers may be in for a very extended period of poor performance and that active may come to the fore, but at my age, my response, as retirement looks, is simply to take some reasonably hefty profits (by my muppet standards) and allocate them to some (shortish) bonds, cash even, and accept the small but real gains currently on offer there.
If, however, you ever decide to launch an IT/fund though, I'm in with my "fun" money (that is not sarcasm).