Brilliant video. I am a big stock guy and it has worked well for me, but I also like to have a well balanced, low-cost set of ETFs that keeps the money in my pocket.
JDW is the ticker symbol for JD wetherspoons might as well invest in the company's an investor and owner. Open a T212 account and you never know you might enjoy both.
Hey if you drink a few beers in Spoons and go home you can literally afford about 8 All World Index Shares from the money saved over an expensive cocktail bar or hipster tap room. That is how I manage to stretch out some DCA deeper into the month before payday. 💰
@@ChrisLivingInYork this isn’t true. You can actually do really well with stocks. You just have to pay more attention. Also index funds do better over the long term. This ytd I’m up 23.9% which is beating the s&p 16.72% ytd. However over the last 5 years the s&p has made 89% and I’ve only made 61%. Note that I didn’t “lose money” 61% is good. it’s just the s&p made more.
This channel made me realise how much of a stronger position I'm in compared to most people and not to squander it. I have no debt or family to pay for and I'm in the army so basically pay no rent or bills. I am able to invest about £2000 per month, I csnt wait to see where I am in 5 - 10 years.
Yep - amazing example. A value and dividend trap for many investors. (now who knows the future, nobody does it could do well from here - but certainly a huge amount of risk)
This is great advice for the lament investor, someone who may enjoy reading about the market here and there and understands money Is better placed in assets such as stocks than just sitting in a bank account. But I must say for someone trying to develop themself as a fundamental long term investor it is a knock to what they are trying to do. Everything buffet said in this video is true, do not avoid this advice if you are serious about developing yourself as an investor and stock picker If you just wanna put some money away and continue with life then just buy index funds and block out all the noise.
Yes ..an interesting video filled with advice and tips ..The dial of the risk can be turned up or down depending on the individual investor but if the saver only has a small amount of cash to save each month whether this advice will help them in the long run is debatable when inflation etc are taken into account ( also just look at pensioners for example who have been penalized for having very small private pensions because of the Winter Fuel allowance policy ). .I am more of a short term swing trader and study quite a few shares of large and small companies and have seen countless examples of investors who keep the faith with that particular company that they believe will do well in the long run but lose out because their share portfolio simply goes up and down with the value of the shares they are in simply because they are waiting for the pot of gold🏆 at the end of the rainbow 🌈 that never quite seems to arrive ..🧐
Another great video. Buffet did get my back up a bit when I first saw those comments suggesting that diversification just being for clueless numpties. Picking a single good stock might work for him if he had a huge team of researchers pouring through company information, balance sheets, etc. We don't all have the same level of time and resources that his team has for identifying which stock to go for.
Yes it's all about context :) In those clips he's really talking to professional/ enthusiast investors. Certainly not for retail investors and most people for sure. Plus even with all of their amazing knowledge and research, the professional industry make so many mistakes...they cannot research the future :)
Nice work Toby Really like your very level headed and balanced view of the financial scene You seem to have opened up some of the written in stone investment golden rules Not by saying they are wrong but by not taking them literally as a one size fits all 😊😊😊
Another great video Toby 👍🏻 For the vast majority you cannot go wrong with low cost index funds and should only buy single stocks if you have the time available to research them and keep a constant eye on them too. Also if you do manage to do this then make sure it's a small percentage of your net worth or classed as your fun portfolio due to the high risks involved. I love a dabble but from playing this game for over 25 years I know the peaks and troughs from single stock trading cause more headaches than you will ever get from most of your money placed in a low cost Global index.
I think investing mostly in index funds is a good idea but every so often you’ll see a Messi or a Ronaldo rise up that show great potential, to use the football kid analogy. It’s also true that good companies sometimes trade cheap and offer opportunities like Amazon and meta a few years back .. but I agree that for most people, including myself it’s best to have a majority in index funds. Thank for the videos.
I do have to say that whenever I find myself thinking about individual stock picking I always splash my emotions with the cold water of how rare a high performing company is - that calms me right down :chuckles:
Buying indexes make more sense for me as they pay dividends which technically means cashing out. But for individual stocks, i may feel greedy and not take profits and then regret when they go down. Ofc the performance will be average but gives me a peace of mind.
Lifestrategy 80 & global index fund for me, the other half just holds s&p 500, monthly investments for the next 25 years hopfully were in a good position at the end
If your horizon is 25 years why are you even bothering with bonds? Either LS100 and one global index fund, or just one global index fund. Equities all the way until you’re much nearer retirement would be my suggestion..
Thanks Toby. I agree with most of this but one regret is not buying Apple shares back in the 90,s when I started investing, even though I was an Apple user and fan back then. If you had bought shares rather than the first iPhone or iPad you would have done very well indeed. It’s the same with Tesla.
It's 100% true yes we all wish we did - one thing I always think though - remember that is is SO easy in hindsight. Amazon is another great example. Until AWS, they were not making much money at all, it was a totally different business that faced so many challenges. Investing in Amazon back post dot com bubble would have been such a different proposition than it is now. Likewise Nvidia! I'm a huge PC gamer, always seen Nvidia as the leader in the space, seemed like a no brainer but for years the stock didn't do much - crypto mining threw it into the mainstream and now AI is the hot thing driving all the sales - BUT back in 2011-2012 none of this was forseeable. Such a great topic though - I could talk about it for hours!! :)
@@TobyNewbatt yes, I think all investors have similar stories and sounds like your Nvidia was my Apple. Don’t you ever get tempted to have a bit of a punt and follow you hunch these days? I am up 370% on Rolls Royce so far which has been nice.
@@jonathanreevescad I do have some picks on the side yes! I just keep those out of the public eye :) - It keeps me interested and I'm not immune to speculation (including some Bitcoin!) Done very well over the past couple of years not done a 370% though! :P Now the big question...is that to high and do you sell now!
@@TobyNewbatt exactly this! AWS is the cash cow high margins cash flow driver. It literally enables them to subsidise the razor thin margins on commerce and the loss making last mile delivery service. They'd be on a much much much shakier footing without AWS.
Great video and a very important message, the 200 day MA is a great way to avoid crashes amd it always will, be as mechanical as possible amd invest like Spock
That £200/month for 30 yrs could be into a S&S SIPP or other pension - many people may already be doing this. At 10%/yr gain plus gov contribution of 25% - after 30 years we get £565K (75% of which is taxable). This is why it is so important to check your pension fund performance NOW, because if it makes just 4% a year (which a lot of standard pensions do!) you would end up with £173K instead of £565K - quite a difference!
Wise words Steve! Maybe I need to cover a bit more on pensions...just the very basics not the complex stuff as it's going to be most peoples largest asset outside of their house probably!
@@TobyNewbatt Yep! Very large asset! Maybe ... 1) Identify and record on paper all your private pensions (and partners), esp. from previous work. 2) Check performance of each (how?) what are they invested in, etc. (look out for expensive FTSE funds with low gain and lots of bonds with negative gain - instead of low cost, high gain US and global ETFs) 3) Check if the pension provider now offers alternative schemes - many have 'hidden' options they don't tell you about, some even allow you to now self-invest with limitations (i.e. a 25 year old can afford to take a higher risk/reward ration than a 55 year old). Beware of not having full choice - e.g. Acme Pensions only allow you to invest in Acme funds (with hidden cost of 1.5% a year) not the whole market (with cost of around 0.2%) 4) What alternatives may perform better (e.g. Vanguard 'retire in 20xx' pensions or better yet DIY S&S SIPP, etc.) 5) If any pension performance is poor (say
Exactly this - and as humans we are shockingly bad at this part, which makes investing all the more interesting to look at. If you've not already read The Black Swan by Nassim Taleb you'll enjoy that one.
I have a very dumb strategy for identifying good companies. I take a small position in a company i belive in, and if it goes up i invest more. If it goes badly i hold on to it for some time and the cut my losses. What many people do wrong is that they are fast to take home proffits in good performing companies, but then they stay with the bad performers and invest more in hope that it will turn around eventually. That is how you lose money on stocks. Weed out bad investments using evolution.
Easy to say find a good company. The issue is that the investors in the markets have researchers who look into the market they are in and do a ton of research, like looking at the exec team, the competition, etc and they still do slightly less than well than statistical random chance.
Precisely what I wanted to highlight :) If people with all the resources in the world to do 'the research' can't do it, then what chance do you have? Sure we can argue that retail can have an edge, we don't have to report to investors, nor do we have limits on what we can allocate in terms of %. Stay humble, speculate if you want (I'm very much all for taking risk!) But just understand the level you are taking :)
@@davideyres955 it does amaze me the huge amount of time and money that goes into researching individual companies for a couple of percent better returns per year But even then they can’t consistently do it.
Sound advice that's why I only listen to the same 4 influencers that I have learnt to put a bit of trust in, and always do my own research and due diligence before making any financial decisions.
absolutely - I just love to get the mental cogs going and help people think critically. But at the end of the day, only you can make the right choice! Just got to get as much of the right info as possible :)
I think you really have to enjoy the challenge & be interested in the process of selecting stocks. I think Buffett himself has said that you don't have to be absolutely right, just about right, which is the reasoning behind margin of safety, as it's impossible to be exactly right about a companies future earnings. Peter Lynch has also referred to investing in stocks as playing a game of stud poker with the cards in your favour. So that's two of the greatest investors admitting that, yes, there is an element of uncertainty to the whole process, which is why many people are put off, or come unstuck.
Indeed it's such a fascinating area Andy - there is so much art behind it, human psychology, strategy, risk you name it. I like to get the cogs going in the mind with videos like this to help people challenge themselves. Thank you as always for the great comments
I think the lesson is, there's investors and investors and not all investors are playing the same game by the same rules. Figure out what game you are playing and make sure you know the rules!
There is plenty of advice both good and bad out there best thing you can do is start early and try to learn along the way and learn about yourself as you have to be happy with the performance / risk along the way. The only shares I had were demutualisation ones and they were epic for a while and are now worth a fraction of the highs so for me i will index invest and let Darwin take care of buisness success or failure.
Re Nokia, they are still a large and successful company - they just don't make mobile phones anymore (they license the name out to a Third Party). But for investors I definitely take your point, their share price tanked and they are nowhere near as large or profitable as they used to be :)
Most of this advice is doled out by people who are not wealthy. Here's my four factors, in order, that influence how much wealth you can accumulate: - regular contribution - maximise tax shelters - temperament - investment return. So yeah, return is on the list but not as critical as the three above it.
Fully respect you Tony and agree with most of if not everything that you say.. would you however lump sum a large amount (200k) into todays market straight away or wait for a correction or DCA over a 12/24 month period? I have seen the research of lump sums and the % chances of investing it straight away vs DCA however valuations in the S&P are rather high and the market has not seen a correction of any relevance for a while now. I would be interested how you would approach such scenario if you was in this position today.
The golden question :) So as you said, lump sum beats drop feeding most of the time...HOWEVER as I say often in answer to this question, all that matters is how you feel and what you are comfortable with. If you want to go all in and continue to invest over your investing timeline (which I am going to assume will be decades!) then fine. My personal view is do what will allow you to sleep at night and cause you the least stress! If thats drip over 6-12 months then fine. Just be careful not to slip into the idea that you can time the market.... Be careful about suggesting that the market is somehow 'overvalued' (there is no way to know as the past is irrelevant, the price is based on future returns) - there will ALWAYS be all time highs created they happen all the time. They are part of the market. If you don't invest at all time highs you are timing the market...and we know what happens to those people :)
Great video, Toby. A certain Tesla and Palantir UA-cam grifter will have a lot to answer for if luck doesn't go their way. I've seen videos uploaded specifically pushing concentration into those two stocks over diversification.
Unfortunately UA-cam finance is filled with grifters and that won't change anytime soon. The incentive is too great especially for the ones based in the US. As you know...they just delete the old videos anyway and move on to whatever popular. Honestly they would have pumped Nokia so hard if UA-cam was around in the past can you imagine :P
That will also be why his channel has stagnated, for nearly a million subs he should be compounding on YT, he lost subs in prior years and he's only grown by 10k in the past year. Thus viewers are seeing through his B.S.
@@BaileyMxX I do hope so..but I also fear that there is always a flow of new people that come across the content and they will have no idea whats gone on before. Anyway..all I can do is combat it with better ideas...at least I hope!
Maybe i wasn't clear enough. Yes, keep cash in an emergency fund. But keeping cash as an investment nope - you are trying to time the market if you are waiting for a crash :)
@TobyNewbatt but i dont get it...if you wait til the market corrects or crashes...and then put your money in etf...wouldn't you still be way ahead when it recovers and grows in 10 to 15 yrs than if you if had put it when it was all time high? i have quite a bit and i wanna put it when market corrects or crashes...and from lookin at history it always always does.
@@jime875 It's a great question but waiting for a crash - which could be many years away, will always be a bad strategy. That money will be sat there doing nothing and being out of the market is terrible advice. There is nobody who can time the market and know when the bottom of the market is, nor when a crash is going to happen :)
@TobyNewbatt are you sure bout that?? cause everytime i read about an imminant crash coming...it happened for sure. now there is talk of a correction by yr end or even a crash from multiple sources. for example...i put a big junk of my money around covid...guess what?? crashed and burned after there were alot of news that it would...and it did...now my money is in negative and never recovered. i guess we will have to disagree. you could have put your money during covid era at the ATH and the it crashes and then you have to wait many yrs til you get even and make a profit...as opposed to eaiting for the crash or correction at least. i will wait it out myself like i said...sooner it always crashes or corrects.
I Think Toby Should Have Gone Just A Little Bit Further With The Nokia Example. As An Individual Stock Investment Toby's Explainaton Was Perfect IMHO However... If Nokia Was In A ETF Fund As It Starts "Crashing" The Fund Automatically "Reblance's" Untill Nokias Position Is Untenable.... Then Nokia Gets Kicked Out Of The Fund. And While This Is Happening As Nokia Falls Out Of The "Top Ten" Number 11 Simply Takes It Place.(And So On) This Is Why I Love ETFs.... 😅
Point 4 doesn't strike me as particular bad advice. If this were still a low interest rate environment then sure, be fully invested. But if you have the option to keep 20% of your investable portfolio in cash earning a risk free 5%, that seems pretty prudent to me. The counterargument people will no doubt make is that by doing so you "missed out" on the current bull run in the market. I would argue that: a) It is only 20%, you still would have captured the bulk of those gains with the remaining 80% you have kept invested, b) The market could have just as easily gone down 10-15% in which case keeping a portion in cash would have been a much better option - after all, for as much as people rabbit on about diversification, the bulk of the S&P500's gains are coming from a handful of companies driven by AI hype, and c) Holding on to a portion of your portfolio in cash gives you the flexibility to invest at bargain prices if there were a crash, something you wouldn't be able to do if you were fully invested.
@@bigjigyeah it’s timing the market 😎. I understand fully what you are saying..but it is literally timing the market :) Investments are for investing. If you want your emergency fund making interest that’s fine.
If you're happy with 20% of your portfolio in cash, then that's perfectly fine. It's not good advice though because it's not universally applicable. If you keep 20% of your portfolio in cash for your entire investing career, that would be a terrible outcome.
I personally try to split my ISA allowance across a S&S ISA and cash ISA. 10k in each is the aim. At 5% it's a decent return. When the saving rates drop I will then add more into the S&S ISA.
Whilst you talk about having a diverse portfolio such as the global all cap - do you think having the FTSE developed and FTSE emerging is a better option? Despite having a lot less companies between the 2 funds in comparison to the global all cap, the % stake in the top 7 is fairly higher, the OFC for the Developed at 0.12% vs the global all caps at 0.23%.
I have 3 funds in my Vanguard SIPP (Global all cap 50%, Developed world ex UK 30% and US Equity 20%). I know there’s a lot of crossover with these funds but I like all three. Is there an obvious disadvantage in holding all three rather than just one e.g. hidden fees? I have a similar situation with my T212 ISA where I have invested in the following three ETFs (all Vanguard): S&P 500 20%; Developed World 30% and All-World 50%.
Great video Toby. In the book "Psychology of Money", one point he makes is that the tails of the market (i.e the very few exceptional companies) make most of the returns, as you say. However how do you identify those few companies driving the returns? I think by buying the whole market in an index fund would be the way. I haven't got the time/expertise to find them myself. Also..I'm keeping my $168bn in cash for the moment too, just to be on the safe side ;)
Re: 1) If you can't find your share certificates, the best thing to do is take a photograph of them with your Kodak camera. I did that with my Nokia and Research In Motion share certificates...
I have been investing in an all world FTSE for a number of years. I'm now getting close to my retirement. I've seen multiple Channels talk about taking 4% or less from the growth each year. But I've never seen a video on how this actually works in practice. Do take 4% as a lump sum once per year or maybe monthly?
Good question and you'd have to really ask those people! I suspect that most people would take their money out on a regular schedule rather than a one off lump as you'd then have a lot of money sat doing nothing!
@@iain777uk You don't withdraw 4% every year - you withdraw 4% in the first year and then increase that amount by inflation every year after that regardless of what the market does. Monthly or yearly makes little difference to the method. But, in general, it's a terrible rule to live by. There's no earthly reason why your lifestyle spend should equal 4%. And also you have state pension to think about. I stopped work 5 years ago aged 51. I hold four years of lifestyle spend in cash and top that up every now and then when the market looks good
Or just invest in the top 10 s and p stocks And if one drops out of the top ten ,replace it with the one that's just come in This will always beat the s and p 500 And the top ten always carry the other 490
@@boyasaka damn son u just cracked the formula for beating the sp500 🤣 How multi billion hedge funds havent thought about this is beyond belief! So you can consistently beat the sp500 index. Damn bro, warren buffet is on line 2 wanting to learn from you. Peter lynch line 3 and the pope line 4
@@DarkoFitCoach well in January I put £7000 into a vanguard VUAG etf And on the same day bought £1000 each of Amazon , Tesla , nvidia, alphabet, Microsoft , meta and Apple My vanguard VUAG is today worth £8010 And my 7 k split with the magnificent 7 is today £9878 So my VUAG has returned just under 15 percent which is Aweosme But my 1000 each in the magnificent 7 has returned 41 percent !! Yes 41 percent And if you wanna do the maths Over the last few years The top ten stocks of the s and p 500 have made most of the gains But don’t just believe a idiot like me Do the maths Do your research and homework And happy investing
I love a bit of stock picks on the side - and I don't doubt the big names will still be around in the next 20 years BUT we are talking about their share price and your returns as an investor (also taking into account risk). Potentially if you buy a great company now - maybe a Mag 7 - there is always risk that the price in the next 20 years of the stock, makes no more returns than the market. And it can still be a great company... :) Any single company has enormous risk and there are plenty of unknowns, and things we cannot know about the future that could change everything.
@@TobyNewbatt Yes, folks would be foolish to use money they couldn’t afford to lose on any gamble and those companies may lose you some money but if you were in at the ground floor, it wouldn’t be too much I guess and if you’d bought apple in 2006, how lucky would that be. I only know of one, just one, successful amateur CFD trader…and that kind of gamble really is a fast way to look silly. I often wonder if stocks and shares could provoke the same addiction as traditional gambling?
It's recommended to save at least 15% of your income in a 401k. You can use online calculators to estimate how much you should save based on your age and income. Saving at least 15% of your income in a 401(k) can help ensure that you have enough money to retire comfortably. By saving this much, you can take advantage of compound interest and potentially grow your retirement savings over time.
Effective personal finance management is more important than the amount of money saved, regardless of whether income is earned through job or investment. Individuals can seek counsel from a certified financial advisor to optimize financial outcomes, who can provide specialized advice and methods to decrease expenses and maximize income.
@@ericgrantl I completely agree; I am 60 years old, recently retired, and have approximately over 2million dollars in external retirement funds. I am debt free and have very little money in retirement funds compared to the total value of my portfolio over the past three years. To be honest, the Fin-advisor can only be neglected, not rejected. Just do your due diligence to identify a fiduciary one.
@@EdwinaLis I think this is something I should do, but I've been stalling for a long time now. I don't really know which firm to work with; I feel they are all the same but it seems you’ve got it all worked out with the firm you work with so i surely wouldn’t mind a recommendation.
@@KateBuesgens I definitely share your sentiment about these firms. Finding financial advisors like Claire Robert’s Durand who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
@@EdwinaLis I greatly appreciate it. I'm fortunate to have come upon your message because investing greatly fascinates me. I'll look Claire up and send her a message. You've truly motivated me. God's blessings on you.
Do you think it's a good time to consider selling some stocks, or is it better to hold onto them for the long term? I’m considering rebalancing my $2M portfolios, So I'm curious about the best strategies to invest this year.
I guess it's important to reassess your investment strategies based on current market conditions. You should also consider a market expert to guide you.
I don't believe this is true. You have to be 18 to have a S&S ISA with a £20k allowance. Junior ISAs have a £9k limit and can be opened below the age of 18 (16 and 17 year olds can open one themselves) but this is still a junior ISA that becomes a normal ISA at aged 18. I don't think there's any maths that allows you to use £29k in one tax year?
@@steve6375 so I remember that there was some quirk with some kind of isa that someone told me a while back BUT it was a loophole that may now have been fixed. I forget exactly what it is now!
@@TobyNewbatt It says 'Remember too, that once your child turns 16, they will be able to open an adult cash ISA of their own (as well as the JISA you opened for them). They’ll be able to add up to the full annual allowance to their own ISA (£20,000 in 2024/2025 tax year) and up to the annual JISA allowance (£9,000 for the 2024/2025 tax year) to the JISA.. Note it says 2024/25 !!!
@@steve6375 right I’ve found the issue I remember. This is from Gov UK newsletter copied below. 1.1 Increase the age for opening cash ISAs from 16 to 18 years old and over. From 6 April 2024 it will not be possible for anyone aged 17 and under to subscribe to more than one cash ISA . This is a mandatory change with transitional arrangements. So basically you could scam the system and use a cash isa as a junior a couple years early…
Oil, Pharma, Food Brands and health care equipment are stable. The market is changing because of technology and innovation. Those things were not massive movers in the 80s. EV, AI, Semiconductors, Biotech, even trading online are new. GPS, Drones, etc, the economy has been upended by progress. Its not a bad thing. Not every company is Coca Cola or FORD. Some lose their civic impact. You want future investments, then invest in the future. Not the past.
@@TobyNewbatt I'm 61. I have seen the Future come, pass by, and come again. My high school buddy has 4600 shares of Apple because his dad bought it in the 80s for a couple of bucks a share. You have to guess on the future. Educated guessing is not that hard
@2:38, no companies are being bought up or outcompeted by larger companies as technology allows them to leverage their advantages and infrastructure to narrow competition to an olicharchy in most industries globaly. It is not that the companies are being caught flat footed as everyone knows that tech is a force multiplier, it is that if everyone has the same multiplier than the other factors are more pronounced because an equal multiplier means it might as well be x1.
1. Ever notice how non US citizens advocate investing in a "global" index fund. If you live in the US, that investment would be underperforming SPX. Global/ex US has utterly become a waste of time or at least a poor allocation of capital. 2. Investing in individual stocks is not inferior to index investing, some years (like the past 3) personally have been fantastic. I don't want to own piles of poo along with the gems that inherently comes with index investing.
Hmmm, maybe we should all go back in time to the year 2000, go all in on the DotCom stocks going to the moon and then wait 15 years for the NASDAQ to recover from the 75% loss!
Personally I think holding a reasonably large cash reserve isn't necessarily a bad thing at the right age. Warren is 94 next month so already well past his investing timeline! 😂 Obviously his beneficiaries may have a different view.
Oh for sure when you are older - having cash for expenses is super important :) What I wanted to highlight here was holding cash INSIDE your investing account and not doing anything, because you are waiting for a crash is timing the market. But yes, for retirement I would be having multiple years of cash on hand and then investing the rest to manage my risk :)
You should do some research and re-evaluate, currently money market funds are extremely attractive and extremely low risk, you didn't specify your cash position so impossible to understand your point of view, 5%? 70%? Sounds like you are someone that sits on the sidelines for years and tries to time the market
I'm not sure you watched the video :) - it was not about the advice, it was about the context. In the very same clips I shared Buffett specifically talks about diversification being essential for everyday investors and that most people should just invest in index funds. Which bit of advice do you disagree with? :)
I think Buffett's advice is somewhat nuanced. He's talking to the knowledgeable, enthusiastic private investor, not the average member of the public or beginner investor. He's also said just invest in the S&P 500 as well. His advice is correct for the knowledgeable private investor, invest in good companies with a durable competitive advantage & with a margin of safety in the price, and don't over diversify for the sake of it and water down your returns etc. His investing strategy is one of the simplest and easiest to understand as a private investor.
@@TobyNewbatt "Buy good companies". It is actually really easy to identify a good company to be fair. You may have to put up with subpar returns for a year or two due to their volatility but certainly would be better off holding a few companies versus a world index. Most though would prefer not to put in the work in educating themselves about good companies and the volatility that comes with them. Also, I'm not sure who says "never sell"? Certainly Buffet never said that. Yes the big money is in the waiting but one needs to sell when the stocks fundamentals no longer align with their investment strategy.
@@Andygb78 Yes exactly this Andy - and this is what I wanted to highlight in this video. It's all about the context of the advice. It gets taken and clipped and applied to everyday retail investors when this is NOT at all what he meant.
@@ciaramckeown4008 Ok good luck with that :) It's really easy to identify a good company, buy it at the right price and sell at the right price as well? You just put in the work right? What magical work Is this? Look at all publicly available information? Look at all past data? This is literally baked into the price within seconds - but you can disagree if you like :) Please challenge your own assumptions here - if it was easy as you say, then we would all do great! You know, I hope, that this is just not true in reality :)
Great video. I was a process control engineer (just retired 2/21/24) I would always stress test my projects just to make sure it would work under all conditions. Also depending on the government. But I found away of earning more income despite my Retirement. $47k weekly returns has been life changing, after so much struggles.
I have Fundsmith equity fund which is good quality companies with little or no debt, I also have S&P 500 index fund, The index fund has always outperformed Fundsmith equity "good quality companies" fund. At some point the S&P 500 index will pull back/ crash, average time to recover 1 -2 years , I have a pot of invested money (low risk) that would last a potential global crash.
It's an interesting one this isn't it! Terry Smith has a great long-term track record - HOWEVER, lets not pretend that most investors in that fund have probably underperformed as they never got in from the start. Personally, I think underperforming the market in the last few years should be an instant dismissal for money managers :P You could well be right that the S&P 500 pulls back - who knows! This is the fascinating part of the market
If you want to achieve the same returns as Warren buffett over the next five years, you don't need to listen to him, you just need to buy Berkshire Hathaway. If you want to under perform warren buffett over the next five years, listen to him and then apply what he says to your portfolio. If you want to outperform Warren buffett over the next five years ... Don't bother. You can't.
I felt personally offended by the thumbnail as that’s my quote before I even knew Buffet said it. It is surprisingly easy to spot good companies. Not all of them and not 100% but enough to get good returns in a portfolio. I’m just not sharing my secret. It’s easy. But people just prefer doing dumb things.
@@uncountableuk hmm. Not sure how to calculate that. But I know the Dow beat me this year. Not counting dividends. Anyways, good companies are easy, just look at the big ones. Then you don’t buy at the tops :). Over time, you’ll win, eventually.
@@TheBooban if you don't know how to calculate that, then you have no idea whether your strategy has done better or worse than holding an index fund with dividend accumulation. It's pretty easy to pick companies. It's pretty hard to beat the market over a couple of decades
Brilliant video. I am a big stock guy and it has worked well for me, but I also like to have a well balanced, low-cost set of ETFs that keeps the money in my pocket.
Worst mistake is not investing in the first place and spending money in Wetherspoons. Damn I love whether-spoons though!!!
@@Abdul_Rahman86 😂😂😂😂 I’ll add that tip in next time
JDW is the ticker symbol for JD wetherspoons might as well invest in the company's an investor and owner. Open a T212 account and you never know you might enjoy both.
Hey if you drink a few beers in Spoons and go home you can literally afford about 8 All World Index Shares from the money saved over an expensive cocktail bar or hipster tap room. That is how I manage to stretch out some DCA deeper into the month before payday. 💰
Your can’t beat index funds!. I tried along with my wife investing in individual stocks during Covid and we both ended up loosing money.
The cheaper the better, too!
@@EvoraGT430 that goes without saying.
Well done. U learned what we knew decades ago. Atleast u learned
@@ChrisLivingInYork this isn’t true. You can actually do really well with stocks. You just have to pay more attention. Also index funds do better over the long term. This ytd I’m up 23.9% which is beating the s&p 16.72% ytd. However over the last 5 years the s&p has made 89% and I’ve only made 61%. Note that I didn’t “lose money” 61% is good. it’s just the s&p made more.
Just pick the right ones
Great advice, great video as always Toby.
This channel made me realise how much of a stronger position I'm in compared to most people and not to squander it. I have no debt or family to pay for and I'm in the army so basically pay no rent or bills. I am able to invest about £2000 per month, I csnt wait to see where I am in 5 - 10 years.
That is an amazing position to be in honestly - huge congrats! Hope you have plenty to enjoy yourself with today as well :P
That's an amazing position and amount to invest in per month. Well done!
Try to have a life as well it's good to have a solid saving habit but the Forces are for most just one of their jobs,/ careers.
Good lad smart .dont pour all your money down your neck like the rest. Be smart and reap the rewards
Great situation - very smart decision and wishing you every success in your journey.
You can't research the future. That was a great quote.
Walgreens now WBA "used to be" the best pharmacy chain in America, even featured in Collins "Good to Great" Now it stock is down 85% from its peak.
Yep - amazing example. A value and dividend trap for many investors. (now who knows the future, nobody does it could do well from here - but certainly a huge amount of risk)
This is great advice for the lament investor, someone who may enjoy reading about the market here and there and understands money Is better placed in assets such as stocks than just sitting in a bank account. But I must say for someone trying to develop themself as a fundamental long term investor it is a knock to what they are trying to do. Everything buffet said in this video is true, do not avoid this advice if you are serious about developing yourself as an investor and stock picker If you just wanna put some money away and continue with life then just buy index funds and block out all the noise.
Yes ..an interesting video filled with advice and tips ..The dial of the risk can be turned up or down depending on the individual investor but if the saver only has a small amount of cash to save each month whether this advice will help them in the long run is debatable when inflation etc are taken into account ( also just look at pensioners for example who have been penalized for having very small private pensions because of the Winter Fuel allowance policy ). .I am more of a short term swing trader and study quite a few shares of large and small companies and have seen countless examples of investors who keep the faith with that particular company that they believe will do well in the long run but lose out because their share portfolio simply goes up and down with the value of the shares they are in simply because they are waiting for the pot of gold🏆 at the end of the rainbow 🌈 that never quite seems to arrive ..🧐
Another great video. Buffet did get my back up a bit when I first saw those comments suggesting that diversification just being for clueless numpties. Picking a single good stock might work for him if he had a huge team of researchers pouring through company information, balance sheets, etc. We don't all have the same level of time and resources that his team has for identifying which stock to go for.
Yes it's all about context :)
In those clips he's really talking to professional/ enthusiast investors. Certainly not for retail investors and most people for sure. Plus even with all of their amazing knowledge and research, the professional industry make so many mistakes...they cannot research the future :)
Only things certain in life are death and taxes (and market crashes). They will always happen so just get on with living and be balanced.
Nice work Toby
Really like your very level headed and balanced view of the financial scene You seem to have opened up some of the written in stone investment golden rules Not by saying they are wrong but by not taking them literally as a one size fits all 😊😊😊
Another great video Toby 👍🏻
For the vast majority you cannot go wrong with low cost index funds and should only buy single stocks if you have the time available to research them and keep a constant eye on them too. Also if you do manage to do this then make sure it's a small percentage of your net worth or classed as your fun portfolio due to the high risks involved.
I love a dabble but from playing this game for over 25 years I know the peaks and troughs from single stock trading cause more headaches than you will ever get from most of your money placed in a low cost Global index.
Thanks a lot for your great advices
It helped me a lot to clear my mind 👍👍
Always welcome
Another great video.
Thanks Ian!
Good video, well said... indeed learning for us all 🙂
Great job on this video 😊keep up the great work sir 😊
I think investing mostly in index funds is a good idea but every so often you’ll see a Messi or a Ronaldo rise up that show great potential, to use the football kid analogy. It’s also true that good companies sometimes trade cheap and offer opportunities like Amazon and meta a few years back .. but I agree that for most people, including myself it’s best to have a majority in index funds. Thank for the videos.
One of your best videos, jolly good show !
Thanks again!
I do have to say that whenever I find myself thinking about individual stock picking I always splash my emotions with the cold water of how rare a high performing company is - that calms me right down :chuckles:
Buying indexes make more sense for me as they pay dividends which technically means cashing out. But for individual stocks, i may feel greedy and not take profits and then regret when they go down. Ofc the performance will be average but gives me a peace of mind.
Lifestrategy 80 & global index fund for me, the other half just holds s&p 500, monthly investments for the next 25 years hopfully were in a good position at the end
If your horizon is 25 years why are you even bothering with bonds? Either LS100 and one global index fund, or just one global index fund. Equities all the way until you’re much nearer retirement would be my suggestion..
@@mikew5274 tbh 25 years is worst case scenario and is probably the number for my partner who is 6 years younger than me.
@@mikew5274 Likewise, all in LS100. Will use a sensible min/max limit when drawing down with ISA's/cash to see through any crashes.
Thanks Toby. I agree with most of this but one regret is not buying Apple shares back in the 90,s when I started investing, even though I was an Apple user and fan back then. If you had bought shares rather than the first iPhone or iPad you would have done very well indeed. It’s the same with Tesla.
It's 100% true yes we all wish we did - one thing I always think though - remember that is is SO easy in hindsight. Amazon is another great example. Until AWS, they were not making much money at all, it was a totally different business that faced so many challenges. Investing in Amazon back post dot com bubble would have been such a different proposition than it is now.
Likewise Nvidia! I'm a huge PC gamer, always seen Nvidia as the leader in the space, seemed like a no brainer but for years the stock didn't do much - crypto mining threw it into the mainstream and now AI is the hot thing driving all the sales - BUT back in 2011-2012 none of this was forseeable.
Such a great topic though - I could talk about it for hours!! :)
@@TobyNewbatt yes, I think all investors have similar stories and sounds like your Nvidia was my Apple. Don’t you ever get tempted to have a bit of a punt and follow you hunch these days? I am up 370% on Rolls Royce so far which has been nice.
@@jonathanreevescad I do have some picks on the side yes! I just keep those out of the public eye :) - It keeps me interested and I'm not immune to speculation (including some Bitcoin!)
Done very well over the past couple of years not done a 370% though! :P
Now the big question...is that to high and do you sell now!
@@TobyNewbatt exactly this! AWS is the cash cow high margins cash flow driver. It literally enables them to subsidise the razor thin margins on commerce and the loss making last mile delivery service.
They'd be on a much much much shakier footing without AWS.
Watch the video again and try to absorb the message
Great video and a very important message, the 200 day MA is a great way to avoid crashes amd it always will, be as mechanical as possible amd invest like Spock
How do you feel about Berkshire stock? Is this similiar to an index fund??
That £200/month for 30 yrs could be into a S&S SIPP or other pension - many people may already be doing this. At 10%/yr gain plus gov contribution of 25% - after 30 years we get £565K (75% of which is taxable). This is why it is so important to check your pension fund performance NOW, because if it makes just 4% a year (which a lot of standard pensions do!) you would end up with £173K instead of £565K - quite a difference!
Wise words Steve! Maybe I need to cover a bit more on pensions...just the very basics not the complex stuff as it's going to be most peoples largest asset outside of their house probably!
@@TobyNewbatt Yep! Very large asset! Maybe ...
1) Identify and record on paper all your private pensions (and partners), esp. from previous work.
2) Check performance of each (how?) what are they invested in, etc. (look out for expensive FTSE funds with low gain and lots of bonds with negative gain - instead of low cost, high gain US and global ETFs)
3) Check if the pension provider now offers alternative schemes - many have 'hidden' options they don't tell you about, some even allow you to now self-invest with limitations (i.e. a 25 year old can afford to take a higher risk/reward ration than a 55 year old). Beware of not having full choice - e.g. Acme Pensions only allow you to invest in Acme funds (with hidden cost of 1.5% a year) not the whole market (with cost of around 0.2%)
4) What alternatives may perform better (e.g. Vanguard 'retire in 20xx' pensions or better yet DIY S&S SIPP, etc.)
5) If any pension performance is poor (say
The important thing with investing is not just to know what you know but to know what you don't know
Exactly this - and as humans we are shockingly bad at this part, which makes investing all the more interesting to look at. If you've not already read The Black Swan by Nassim Taleb you'll enjoy that one.
@@TobyNewbatt thanks I'll give it a read
As Yogi Bear often said "Hey, Hey, Hey"...
Though he wasn't necessarily talking about investing... 😊
😂😂😂
Hi Toby. Love the channel and I’m quite new to investing- can you do a video explaining whether/when it’s best to go with an ISA or SIP? Thanks
Already done…go back through my videos and you’ll find it not long ago 😊
@@TobyNewbatt amazing, thanks
I have a very dumb strategy for identifying good companies. I take a small position in a company i belive in, and if it goes up i invest more. If it goes badly i hold on to it for some time and the cut my losses.
What many people do wrong is that they are fast to take home proffits in good performing companies, but then they stay with the bad performers and invest more in hope that it will turn around eventually. That is how you lose money on stocks.
Weed out bad investments using evolution.
Thx for the vid. I feel people use the third point to justify lousy investments and not do any DD .
Easy to say find a good company. The issue is that the investors in the markets have researchers who look into the market they are in and do a ton of research, like looking at the exec team, the competition, etc and they still do slightly less than well than statistical random chance.
Precisely what I wanted to highlight :)
If people with all the resources in the world to do 'the research' can't do it, then what chance do you have? Sure we can argue that retail can have an edge, we don't have to report to investors, nor do we have limits on what we can allocate in terms of %. Stay humble, speculate if you want (I'm very much all for taking risk!) But just understand the level you are taking :)
@@davideyres955 it does amaze me the huge amount of time and money that goes into researching individual companies for a couple of percent better returns per year But even then they can’t consistently do it.
Another brilliant video
Thank you!
Sound advice that's why I only listen to the same 4 influencers that I have learnt to put a bit of trust in, and always do my own research and due diligence before making any financial decisions.
absolutely - I just love to get the mental cogs going and help people think critically. But at the end of the day, only you can make the right choice! Just got to get as much of the right info as possible :)
So interesting...all evidence is clearly against you picking individual stocks...yet It IS so difficult to stop doing It!
I think you really have to enjoy the challenge & be interested in the process of selecting stocks. I think Buffett himself has said that you don't have to be absolutely right, just about right, which is the reasoning behind margin of safety, as it's impossible to be exactly right about a companies future earnings.
Peter Lynch has also referred to investing in stocks as playing a game of stud poker with the cards in your favour. So that's two of the greatest investors admitting that, yes, there is an element of uncertainty to the whole process, which is why many people are put off, or come unstuck.
Indeed it's such a fascinating area Andy - there is so much art behind it, human psychology, strategy, risk you name it. I like to get the cogs going in the mind with videos like this to help people challenge themselves.
Thank you as always for the great comments
Young people have a huge disadvantage in investing - they have no money😂
better get to work! :P
Enjoy your content mate, deffs got a good look and voice for youtube 👍
Much appreciated
Excellent; all true!
I think the lesson is, there's investors and investors and not all investors are playing the same game by the same rules. Figure out what game you are playing and make sure you know the rules!
There is plenty of advice both good and bad out there best thing you can do is start early and try to learn along the way and learn about yourself as you have to be happy with the performance / risk along the way.
The only shares I had were demutualisation ones and they were epic for a while and are now worth a fraction of the highs so for me i will index invest and let Darwin take care of buisness success or failure.
Re Nokia, they are still a large and successful company - they just don't make mobile phones anymore (they license the name out to a Third Party). But for investors I definitely take your point, their share price tanked and they are nowhere near as large or profitable as they used to be :)
Oh, and on a separate note, love the Fractal North in the background - I am a huge fan of their scandi minimalism designs :)
Thanks! It's the XL version as I needed a bit more room. I needed something a bit more adult looking and less RGB :)
Wait, you mean my stagecoach companies aren’t coming back?
Most of this advice is doled out by people who are not wealthy.
Here's my four factors, in order, that influence how much wealth you can accumulate:
- regular contribution
- maximise tax shelters
- temperament
- investment return.
So yeah, return is on the list but not as critical as the three above it.
Fully respect you Tony and agree with most of if not everything that you say.. would you however lump sum a large amount (200k) into todays market straight away or wait for a correction or DCA over a 12/24 month period?
I have seen the research of lump sums and the % chances of investing it straight away vs DCA however valuations in the S&P are rather high and the market has not seen a correction of any relevance for a while now.
I would be interested how you would approach such scenario if you was in this position today.
The golden question :)
So as you said, lump sum beats drop feeding most of the time...HOWEVER as I say often in answer to this question, all that matters is how you feel and what you are comfortable with. If you want to go all in and continue to invest over your investing timeline (which I am going to assume will be decades!) then fine. My personal view is do what will allow you to sleep at night and cause you the least stress! If thats drip over 6-12 months then fine. Just be careful not to slip into the idea that you can time the market....
Be careful about suggesting that the market is somehow 'overvalued' (there is no way to know as the past is irrelevant, the price is based on future returns) - there will ALWAYS be all time highs created they happen all the time. They are part of the market. If you don't invest at all time highs you are timing the market...and we know what happens to those people :)
Great video, Toby. A certain Tesla and Palantir UA-cam grifter will have a lot to answer for if luck doesn't go their way.
I've seen videos uploaded specifically pushing concentration into those two stocks over diversification.
Unfortunately UA-cam finance is filled with grifters and that won't change anytime soon. The incentive is too great especially for the ones based in the US.
As you know...they just delete the old videos anyway and move on to whatever popular. Honestly they would have pumped Nokia so hard if UA-cam was around in the past can you imagine :P
remember Tom - 'you just have to do the research bro and' (insert sarcasm here)
That will also be why his channel has stagnated, for nearly a million subs he should be compounding on YT, he lost subs in prior years and he's only grown by 10k in the past year.
Thus viewers are seeing through his B.S.
@BaileyMxX Ah I had a much smaller UK based UA-camr in mind haha. But yep applies to anyone pushing Tesla and Palantir constantly
@@BaileyMxX I do hope so..but I also fear that there is always a flow of new people that come across the content and they will have no idea whats gone on before.
Anyway..all I can do is combat it with better ideas...at least I hope!
i disagree with last thing...having cash reserve is very important. never put all your cash in or most of it!!
Maybe i wasn't clear enough. Yes, keep cash in an emergency fund. But keeping cash as an investment nope - you are trying to time the market if you are waiting for a crash :)
@TobyNewbatt but i dont get it...if you wait til the market corrects or crashes...and then put your money in etf...wouldn't you still be way ahead when it recovers and grows in 10 to 15 yrs than if you if had put it when it was all time high? i have quite a bit and i wanna put it when market corrects or crashes...and from lookin at history it always always does.
@@jime875 It's a great question but waiting for a crash - which could be many years away, will always be a bad strategy. That money will be sat there doing nothing and being out of the market is terrible advice. There is nobody who can time the market and know when the bottom of the market is, nor when a crash is going to happen :)
@TobyNewbatt are you sure bout that?? cause everytime i read about an imminant crash coming...it happened for sure. now there is talk of a correction by yr end or even a crash from multiple sources. for example...i put a big junk of my money around covid...guess what?? crashed and burned after there were alot of news that it would...and it did...now my money is in negative and never recovered. i guess we will have to disagree. you could have put your money during covid era at the ATH and the it crashes and then you have to wait many yrs til you get even and make a profit...as opposed to eaiting for the crash or correction at least. i will wait it out myself like i said...sooner it always crashes or corrects.
13:10 where can you find these stats?
I use a platform called Koyfin and then I screen the market based on total returns over that time period.
@@TobyNewbatt Thank you, its quite surprising.
I Think Toby Should Have Gone Just A Little Bit Further With The Nokia Example.
As An Individual Stock Investment Toby's Explainaton Was Perfect IMHO
However...
If Nokia Was In A ETF Fund As It Starts "Crashing" The Fund Automatically "Reblance's" Untill Nokias Position Is Untenable.... Then Nokia Gets Kicked Out Of The Fund.
And While This Is Happening As Nokia Falls Out Of The "Top Ten" Number 11 Simply Takes It Place.(And So On)
This Is Why I Love ETFs.... 😅
Point 4 doesn't strike me as particular bad advice. If this were still a low interest rate environment then sure, be fully invested. But if you have the option to keep 20% of your investable portfolio in cash earning a risk free 5%, that seems pretty prudent to me.
The counterargument people will no doubt make is that by doing so you "missed out" on the current bull run in the market.
I would argue that:
a) It is only 20%, you still would have captured the bulk of those gains with the remaining 80% you have kept invested,
b) The market could have just as easily gone down 10-15% in which case keeping a portion in cash would have been a much better option - after all, for as much as people rabbit on about diversification, the bulk of the S&P500's gains are coming from a handful of companies driven by AI hype, and
c) Holding on to a portion of your portfolio in cash gives you the flexibility to invest at bargain prices if there were a crash, something you wouldn't be able to do if you were fully invested.
@@bigjigyeah it’s timing the market 😎. I understand fully what you are saying..but it is literally timing the market :)
Investments are for investing. If you want your emergency fund making interest that’s fine.
@@TobyNewbatt Guess we're going to have to agree to disagree on that one then. Best of luck in your investing journey :)
If you're happy with 20% of your portfolio in cash, then that's perfectly fine.
It's not good advice though because it's not universally applicable.
If you keep 20% of your portfolio in cash for your entire investing career, that would be a terrible outcome.
I personally try to split my ISA allowance across a S&S ISA and cash ISA. 10k in each is the aim.
At 5% it's a decent return.
When the saving rates drop I will then add more into the S&S ISA.
Whilst you talk about having a diverse portfolio such as the global all cap - do you think having the FTSE developed and FTSE emerging is a better option?
Despite having a lot less companies between the 2 funds in comparison to the global all cap, the % stake in the top 7 is fairly higher, the OFC for the Developed at 0.12% vs the global all caps at 0.23%.
I have 3 funds in my Vanguard SIPP (Global all cap 50%, Developed world ex UK 30% and US Equity 20%). I know there’s a lot of crossover with these funds but I like all three. Is there an obvious disadvantage in holding all three rather than just one e.g. hidden fees? I have a similar situation with my T212 ISA where I have invested in the following three ETFs (all Vanguard): S&P 500 20%; Developed World 30% and All-World 50%.
A lot of duplication, but no harm done
Great video Toby. In the book "Psychology of Money", one point he makes is that the tails of the market (i.e the very few exceptional companies) make most of the returns, as you say. However how do you identify those few companies driving the returns? I think by buying the whole market in an index fund would be the way. I haven't got the time/expertise to find them myself.
Also..I'm keeping my $168bn in cash for the moment too, just to be on the safe side ;)
I'm also keeping billions in cash too - makes sense right :P
Re: 1) If you can't find your share certificates, the best thing to do is take a photograph of them with your Kodak camera. I did that with my Nokia and Research In Motion share certificates...
@5:30 I see we were thinking of the same example..
Great minds Declan 😉
Great video Toby. We should work on a collab.
I have been investing in an all world FTSE for a number of years. I'm now getting close to my retirement. I've seen multiple Channels talk about taking 4% or less from the growth each year. But I've never seen a video on how this actually works in practice. Do take 4% as a lump sum once per year or maybe monthly?
Good question and you'd have to really ask those people! I suspect that most people would take their money out on a regular schedule rather than a one off lump as you'd then have a lot of money sat doing nothing!
@@iain777uk You don't withdraw 4% every year - you withdraw 4% in the first year and then increase that amount by inflation every year after that regardless of what the market does. Monthly or yearly makes little difference to the method.
But, in general, it's a terrible rule to live by. There's no earthly reason why your lifestyle spend should equal 4%. And also you have state pension to think about.
I stopped work 5 years ago aged 51. I hold four years of lifestyle spend in cash and top that up every now and then when the market looks good
Sp500 index, hold and chill for decades
Thats about it
Or just invest in the top 10 s and p stocks
And if one drops out of the top ten ,replace it with the one that's just come in
This will always beat the s and p 500
And the top ten always carry the other 490
@@boyasaka damn son u just cracked the formula for beating the sp500 🤣
How multi billion hedge funds havent thought about this is beyond belief!
So you can consistently beat the sp500 index. Damn bro, warren buffet is on line 2 wanting to learn from you. Peter lynch line 3 and the pope line 4
@@DarkoFitCoach well in January
I put £7000 into a vanguard VUAG etf
And on the same day bought £1000 each of
Amazon , Tesla , nvidia, alphabet, Microsoft , meta and Apple
My vanguard VUAG is today worth £8010
And my 7 k split with the magnificent 7 is today £9878
So my VUAG has returned just under 15 percent which is Aweosme
But my 1000 each in the magnificent 7 has returned 41 percent !!
Yes 41 percent
And if you wanna do the maths
Over the last few years
The top ten stocks of the s and p 500 have made most of the gains
But don’t just believe a idiot like me
Do the maths
Do your research and homework
And happy investing
I guess ETFs for the long while and individual stocks for a considered gamble, like Palantir and Qualcomm…Broadcomm…Meta…
I love a bit of stock picks on the side - and I don't doubt the big names will still be around in the next 20 years BUT we are talking about their share price and your returns as an investor (also taking into account risk).
Potentially if you buy a great company now - maybe a Mag 7 - there is always risk that the price in the next 20 years of the stock, makes no more returns than the market. And it can still be a great company... :)
Any single company has enormous risk and there are plenty of unknowns, and things we cannot know about the future that could change everything.
Oh dear
@@TobyNewbatt Yes, folks would be foolish to use money they couldn’t afford to lose on any gamble and those companies may lose you some money but if you were in at the ground floor, it wouldn’t be too much I guess and if you’d bought apple in 2006, how lucky would that be. I only know of one, just one, successful amateur CFD trader…and that kind of gamble really is a fast way to look silly. I often wonder if stocks and shares could provoke the same addiction as traditional gambling?
@@kippsguitar6539 yes, so many things can get that comment I guess
It's recommended to save at least 15% of your income in a 401k. You can use online calculators to estimate how much you should save based on your age and income. Saving at least 15% of your income in a 401(k) can help ensure that you have enough money to retire comfortably. By saving this much, you can take advantage of compound interest and potentially grow your retirement savings over time.
Effective personal finance management is more important than the amount of money saved, regardless of whether income is earned through job or investment. Individuals can seek counsel from a certified financial advisor to optimize financial outcomes, who can provide specialized advice and methods to decrease expenses and maximize income.
@@ericgrantl I completely agree; I am 60 years old, recently retired, and have approximately over 2million dollars in external retirement funds. I am debt free and have very little money in retirement funds compared to the total value of my portfolio over the past three years. To be honest, the Fin-advisor can only be neglected, not rejected. Just do your due diligence to identify a fiduciary one.
@@EdwinaLis I think this is something I should do, but I've been stalling for a long time now. I don't really know which firm to work with; I feel they are all the same but it seems you’ve got it all worked out with the firm you work with so i surely wouldn’t mind a recommendation.
@@KateBuesgens I definitely share your sentiment about these firms. Finding financial advisors like Claire Robert’s Durand who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
@@EdwinaLis I greatly appreciate it. I'm fortunate to have come upon your message because investing greatly fascinates me. I'll look Claire up and send her a message. You've truly motivated me. God's blessings on you.
Be greedy when others are fearful, not a foolproof plan?... except with Pelaton, I'll keep putting in, and eventually, I'll be less than 90% down 😢
Exactly….buy the dip right? 😂
Do you think it's a good time to consider selling some stocks, or is it better to hold onto them for the long term? I’m considering rebalancing my $2M portfolios, So I'm curious about the best strategies to invest this year.
I guess it's important to reassess your investment strategies based on current market conditions. You should also consider a market expert to guide you.
Exellent video but are you sure it was norwegian kronas because Nokia is a finnish company?Must be finnish marks that time.
forgive me you may be right here! Getting my currency mixed up because of the NOK ticker... :P
Hey Toby, is it true that people between the ages of 16 and 18 can save up to 29k a year tax free into a JISA plus an ISA? Wish I or my son was 16!
I don't believe this is true. You have to be 18 to have a S&S ISA with a £20k allowance. Junior ISAs have a £9k limit and can be opened below the age of 18 (16 and 17 year olds can open one themselves) but this is still a junior ISA that becomes a normal ISA at aged 18.
I don't think there's any maths that allows you to use £29k in one tax year?
@@TobyNewbatt hmmm, seems I found an old Barclays page that specifically said you could do this. Thought it was too good to be true!
@@steve6375 so I remember that there was some quirk with some kind of isa that someone told me a while back BUT it was a loophole that may now have been fixed. I forget exactly what it is now!
@@TobyNewbatt It says 'Remember too, that once your child turns 16, they will be able to open an adult cash ISA of their own (as well as the JISA you opened for them). They’ll be able to add up to the full annual allowance to their own ISA (£20,000 in 2024/2025 tax year) and up to the annual JISA allowance (£9,000 for the 2024/2025 tax year) to the JISA.. Note it says 2024/25 !!!
@@steve6375 right I’ve found the issue I remember. This is from Gov UK newsletter copied below.
1.1 Increase the age for opening cash ISAs from 16 to 18 years old and over. From 6 April 2024 it will not be possible for anyone aged 17 and under to subscribe to more than one cash ISA . This is a mandatory change with transitional arrangements.
So basically you could scam the system and use a cash isa as a junior a couple years early…
When you started talking phones I thought you were going to say black berry:)
The examples never end
Oil, Pharma, Food Brands and health care equipment are stable. The market is changing because of technology and innovation. Those things were not massive movers in the 80s. EV, AI, Semiconductors, Biotech, even trading online are new. GPS, Drones, etc, the economy has been upended by progress. Its not a bad thing. Not every company is Coca Cola or FORD. Some lose their civic impact. You want future investments, then invest in the future. Not the past.
The future always changes - that is all we know - you can't research the future :)
@@TobyNewbatt I'm 61. I have seen the Future come, pass by, and come again. My high school buddy has 4600 shares of Apple because his dad bought it in the 80s for a couple of bucks a share. You have to guess on the future. Educated guessing is not that hard
I am the special one.....
I have no doubt at all if you watch this channel you must be :P
I am Excellent in finding amazing companies...
Decades down the line 😂
😂😂😂😂😂
@2:38, no companies are being bought up or outcompeted by larger companies as technology allows them to leverage their advantages and infrastructure to narrow competition to an olicharchy in most industries globaly. It is not that the companies are being caught flat footed as everyone knows that tech is a force multiplier, it is that if everyone has the same multiplier than the other factors are more pronounced because an equal multiplier means it might as well be x1.
Index and Chill 😎
Buffett also says 99% of ' normal people , including his WIFE , should index invest ".
Precisely 😀
Ok so I’m sensing what you’re trying to say was investing is not worth it, and just keep your money in the bank.
Oh dear
1. Ever notice how non US citizens advocate investing in a "global" index fund. If you live in the US, that investment would be underperforming SPX. Global/ex US has utterly become a waste of time or at least a poor allocation of capital. 2. Investing in individual stocks is not inferior to index investing, some years (like the past 3) personally have been fantastic. I don't want to own piles of poo along with the gems that inherently comes with index investing.
Hmmm, maybe we should all go back in time to the year 2000, go all in on the DotCom stocks going to the moon and then wait 15 years for the NASDAQ to recover from the 75% loss!
... and yet the index investor beats the individual stock investor most of the time, even whilst owning piles of poo.
Personally I think holding a reasonably large cash reserve isn't necessarily a bad thing at the right age. Warren is 94 next month so already well past his investing timeline! 😂
Obviously his beneficiaries may have a different view.
Oh for sure when you are older - having cash for expenses is super important :)
What I wanted to highlight here was holding cash INSIDE your investing account and not doing anything, because you are waiting for a crash is timing the market. But yes, for retirement I would be having multiple years of cash on hand and then investing the rest to manage my risk :)
You should do some research and re-evaluate, currently money market funds are extremely attractive and extremely low risk, you didn't specify your cash position so impossible to understand your point of view, 5%? 70%? Sounds like you are someone that sits on the sidelines for years and tries to time the market
Think I would prefer to take Buffets advice than yours. No offence
I'm not sure you watched the video :) - it was not about the advice, it was about the context.
In the very same clips I shared Buffett specifically talks about diversification being essential for everyday investors and that most people should just invest in index funds. Which bit of advice do you disagree with? :)
I think Buffett's advice is somewhat nuanced. He's talking to the knowledgeable, enthusiastic private investor, not the average member of the public or beginner investor.
He's also said just invest in the S&P 500 as well.
His advice is correct for the knowledgeable private investor, invest in good companies with a durable competitive advantage & with a margin of safety in the price, and don't over diversify for the sake of it and water down your returns etc. His investing strategy is one of the simplest and easiest to understand as a private investor.
@@TobyNewbatt "Buy good companies". It is actually really easy to identify a good company to be fair. You may have to put up with subpar returns for a year or two due to their volatility but certainly would be better off holding a few companies versus a world index. Most though would prefer not to put in the work in educating themselves about good companies and the volatility that comes with them. Also, I'm not sure who says "never sell"? Certainly Buffet never said that. Yes the big money is in the waiting but one needs to sell when the stocks fundamentals no longer align with their investment strategy.
@@Andygb78 Yes exactly this Andy - and this is what I wanted to highlight in this video. It's all about the context of the advice. It gets taken and clipped and applied to everyday retail investors when this is NOT at all what he meant.
@@ciaramckeown4008 Ok good luck with that :)
It's really easy to identify a good company, buy it at the right price and sell at the right price as well? You just put in the work right?
What magical work Is this? Look at all publicly available information? Look at all past data? This is literally baked into the price within seconds - but you can disagree if you like :)
Please challenge your own assumptions here - if it was easy as you say, then we would all do great! You know, I hope, that this is just not true in reality :)
Great video.
I was a process control engineer (just retired 2/21/24) I would always stress test my projects just to make sure it would work under all conditions.
Also depending on the government.
But I found away of earning more income despite my Retirement. $47k weekly returns has been life changing, after so much struggles.
Haha
I have Fundsmith equity fund which is good quality companies with little or no debt, I also have S&P 500 index fund,
The index fund has always outperformed Fundsmith equity "good quality companies" fund.
At some point the S&P 500 index will pull back/ crash, average time to recover 1 -2 years , I have a pot of invested money (low risk) that would last a potential global crash.
It's an interesting one this isn't it! Terry Smith has a great long-term track record - HOWEVER, lets not pretend that most investors in that fund have probably underperformed as they never got in from the start. Personally, I think underperforming the market in the last few years should be an instant dismissal for money managers :P
You could well be right that the S&P 500 pulls back - who knows! This is the fascinating part of the market
@@TobyNewbatt too many active funds under perform.
Oh dear, is he the next Woodford? You are timing the market here
That's wierd, because I have fundsmith as well and have held for 7 years. Performance over that period has been excellent.
@@shadeofheresy if you compare Fundsmith with the S&P 500 over the same seven years, S&P 500 comes out as a better investment.
So… don’t listen to Warren Buffet, listen to you tubers??!
If you want to achieve the same returns as Warren buffett over the next five years, you don't need to listen to him, you just need to buy Berkshire Hathaway.
If you want to under perform warren buffett over the next five years, listen to him and then apply what he says to your portfolio.
If you want to outperform Warren buffett over the next five years ... Don't bother. You can't.
Yay first (sensible) comment :)
🥇
Step 1 move to Dubai
Buy the indexes cheaply is my advise. For regular folks
I felt personally offended by the thumbnail as that’s my quote before I even knew Buffet said it. It is surprisingly easy to spot good companies. Not all of them and not 100% but enough to get good returns in a portfolio. I’m just not sharing my secret. It’s easy. But people just prefer doing dumb things.
Remember it’s easy you are the special one 😎.
@@TobyNewbatt not really. You know its not hard. Right Price is a bit harder, but just a bit.
What are your average annual returns over the last ten years?
@@uncountableuk hmm. Not sure how to calculate that. But I know the Dow beat me this year. Not counting dividends.
Anyways, good companies are easy, just look at the big ones. Then you don’t buy at the tops :). Over time, you’ll win, eventually.
@@TheBooban if you don't know how to calculate that, then you have no idea whether your strategy has done better or worse than holding an index fund with dividend accumulation.
It's pretty easy to pick companies. It's pretty hard to beat the market over a couple of decades