Well I have now watched the various suggestions for 'safe havens' for most of the year, and on balance I am unmoved. A real market slump has not happened of course and may not be around the corner ... although some of what I thought were my defensive stocks are well off their highs for various reasons.
The best of the bunch does indeed seem to be RCP, but returns in a mildly bullish market have been weak compared to my diverse portfolio. RCP might not show its true worth until the downturn comes, but it feels the more productive option is to remain largely invested in defensive high yielders. With profits taken periodically and so with cash in hand in order to pick up any bargains ... always the optimist looking for recovery value, and hopeful of picking more winners than losers.
I have even been trading in and out of gold miners on stock volatility, and sold a bunch of bonds thinking I could do better elsewhere. To de-risk a bit next year I will reduce single stock positions.
The option of shelling out to low risk income might lie ahead in the medium term ... low risk govt bond rates should improve, we may even see a return to 5+% annuities. In the meantime it would be a shame to be stuck in the slow lane.
The NAV for 31.10,published on 14.11 was 1813p, actually 4 higher than a month earlier, and thats AFTER paying the 16p dividend as well. So with the SP at 1943p, and the NAV at 1813p, it is now trading at a premium of 7.2% to NAV.
Still one of the best long term investments available in my opinion.
Gives access to certain specialist funds which smaller private investors wouldn't normally be able to get.
I'm holding. And will buy on dips.
Is it because some consider the market overvalued that ironically they trade at a premium? Could the argument be that RIT have historically positioned themselves to make money in falling markets and so if you believe they are so positioned now (holding back current performance) but on a fall they will do better than others you give them a premium as the NAV will fall less than that of others. A genuine question but this is why I (perhaps mistakenly) stay put......
Agreed. The premium worries me. On a market drop the loss would probably be enhances. Ive been with Rcp for over 20 years and it pains me to take profits. On a market fall would probably put half back in RCP and half SMT.
"The most popular investment trust bought among investors on Interactive Investor continues to be LSE:SMT:Scottish Mortgage. James Anderson's technology-slanted global trust continues to enjoy huge popularity. Further, it won Best Global Growth ..."
Merryn post election, FT Money 10/6) post Brexit , post everything ...says " there is one default fund out there for all of you feeling wrongfooted by our endless elections and uncertain about the future - RIT capital partners. .hugely diversified portfolio...and excellent long term performance..."
Comparison of graphs of all three from 2004 is clearly favouring RCP, I have no doubt that with a 3-5 year horizon all three would fare better than cash. I note that RCP was worst affected with the downturn in 2008. However, I believe in 2008 the writing was on the wall and considering the state of financial sector, cash and UK gilts looked safest and saw me through with zero loss, this time there may be a correction but there is no basis for a serious collapse of the markets or any sector.
Reading into what are described as protection investments, designed to preserve capital when there is a downturn, discussions centre on RCP, PNL and RICA where Ruffer is making the news for hedging a crash.
I already have good slices in bonds and proxy/debt trusts, gold (miners) and an international equity spread. My cash pile is now over 10% from realising gains. With a 3-5 year horizon I'm wondering should I hold the cash, re-invest in what look like value stocks, or feed into one or more of these protection trusts.
They seem to be a valid option for preserving capital, income at 1-1.7% is a small net loss to RPI, and they trade at a premium (RCP is 6%, RICA is about 3%, PNL about 1%).
True enough. I'm a "buy and hold" cove mesen and, on 31 December every year, regardless of what I actually paid for summat I reset my "cost" to the price prevailing on that day. I then use a mark one eyeball over the following year to see how my wad is doing against my benchmark.
Each year I promise mesen that I'll set a stop loss (measured against the 31 December price) but I never follow up on that promise. This is because I cannot believe that I have ever bought a real dog so that, if a share falls by, say, 15%, I usually feel that that chust makes it even BETTER value.
Foolish of me, I'm sure, but there you go.
LKH on the flybridge it's hellish difficult to get one's timing perfectly right
A little unfair? ULVR is up 12% and GSK up 10% over the year ... and you've had the divis on top. That's not too bad. If someone offered me a total shareholder return of 15% (including the divis) every year I'd bite his hand off.
I've got 2.9% of my shrunken wad in RCP, 5% in ULVR and 7.1% in GSK and am happy with that. Don't intend to change anything (as regards them three) in 2017 unless some unanticipated event changes my mind, which is always possible.
I thought that RCP was rather uncorrelated with the general market? So, if there is a correction, it may well not affect RCP that much .... but you could well be right to take some chips off the table.
We shall see! Meanwhile I'm leaving my shrunken wad, such as it is, fully invested.
LKH on the flybridge so long as Jake stays in I stay in
I hold Berkshire shares with Selftrade. Through Selftrade I can buy or sell on the NYSE subject to US trading hours. The one piece of compliance required is a one page W8-BEN for the US Internal Revenue people which must be renewed each three years. You may wish to check with your own broker. Seems easy enough, although I know LKH has previously said he does not favour providing Uncle Sam with his data (and the Snowden episode probably supports that view).
Yes I see SZSUSA has outperformed BRK in the last six months, and both have outperformed RIT.
BRK and SZSUSA are very different entities. SZSUSA is a much smaller fund and specialises in US and Canadian smaller companies. I did not recognise any of the companies in their top 10 list. BRK on the other hand is gigantic and only invests in large, mostly US, companies. BRK allows me to sleep well at night and has been a delight to hold.
I assume BRK is not so straight forward to hold from the UK (ADRs?).
But I would not assume that BRK has somehow outperformed from WB's magic touch. I'm also assuming that BRK has a much much heavier US bias than RIT.
I hold Schroder US Smaller Companies UT and (from the charts) it would appear to have outperformed BRK over the 5 year period of the chart previously shown by aspace. And I would guess that there will be some (many?) other US invested funds that have done just as well (in GBP terms). One issue that crops up with getting exposure to the US is the poor performance of UK domiciled US invested funds, consquently a lot of bods end up in US trackers (e.g. from HSBC, Fidelity).
Unfortunately it seems I can't include a copy of a UT chart here. To get the Schroder US Smaller Companies UT chart for the relevant period (5 years) use the fund code SZSUSA (that's an old bundled accumulation fund that goes back that far).
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