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IGSam

IG Portfolio Manager
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About IGSam

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  1. IGSam

    Ocado

    Hi , thought I'd add to your post on what is one of the most shorted UK stocks In the year to 3 Dec 2017, Ocado reported a pre-tax loss. Costs developing IT systems and automating warehouses weighed on profits (-£0.5m versus £12.2m profit the previous year) But they have announced a string of partnerships; French supermarket Group Casino, Sobeys of Canada + another unnamed Shareholders will hope these will allow Ocado to slowly start to turn a profit... Ocado have said they expect earnings to rise significantly in 2019 However since the tweet below went (semi) viral in January the share price is up nearly 50%! For those who are still as sceptical about the business model as they were at the turn of the year, this in theory makes the company an even more attractive short, right? Interestingly, the percentage of its shares on loan to short sellers has fallen to 7.9% from 13.5% back in January Do we think there has been some profit taking by the sceptics or have the winds changed and sentiment about the long-term earnings potential improved?
  2. Hi For this ‘Balanced’ portfolio I used three instruments. The weight in the portfolio given to each is given too... 48% - Developed market equities (MSCI World Net Total Return Index) 48% - UK government bonds (FTSE Actuaries UK Conventional Gilts Total Return Index) 4% - Gold (LMBA Gold Price) I crunched the numbers for you and over this period the FTSE 100 returned 84% while the FTSE 250 grew by 169%. In comparison, the ‘Balanced’ portfolio I constructed using the 3 indices above was up 82%, extremely close to the FTSE 100 total return! However, the maximum drawdown (peak-to-trough) for each index/portfolio shows why diversification across asset classes can help to smooth your investment returns. 2008 was a painful period for most investors (circled in chart below). The largest drawdown was -43% for the FTSE 100, -47% for the FTSE 250. But for this 'Balanced' portfolio it was half that at -21%. This is the ideology that sits behind our suite of Smart Portfolios: Risk and Returns is also completely right. I started the chart before the 2008 financial crisis to show that even investing through the worst market scenarios, a buy-and-hold approach over this period has provided solid returns in comparison to leaving your cash in the bank.
  3. Agreed. Setting aside a portion of your funds for buying opportunities can definitely be advantageous. A key reason we launched Smart Portfolios is to complement our existing Share Dealing offering. We would like to think that our clients will use our range of Smart Portfolios to manage the core of their wealth but use our Share Dealing platform to trade their best ideas. 2016 equity returns and the opportunities arising from the EU referendum provide a good example of how this approach can work successfully. While the FTSE 100 returned around 19% over the course of the year, on the day of the referendum, certain sectors got smashed and in hindsight presented a great opportunity to invest in some good companies at an attractive discount. UK housebuilders being a sector that springs to mind! To-date, Taylor Wimpey, Barratt Developments and Permission are up 58%, 67% and 97% since the 24th June 2016, respectively.
  4. If you are looking to invest in the stock market but want to make a positive impact on environmental and social issues at the same time, how do you decide which stocks or ETFs to invest in? Is this even a consideration when you are looking for investment opportunities? Traditionally, investors used exclusionary screens to omit “sin stocks” in certain industries like gambling, tobacco or weapons. However disregarding entire industries can have negative effects on diversification and portfolio returns over the long run. But now you can buy funds that include companies based on ratings system that consider factors ranging from environmental issues such as carbon footprint, to social issues such as gender pay equality. These scores are known as an ESG ratings, which are compiled by companies such as MSCI or Morningstar. ESG stands for environmental, social and governance. Even though ESG investment products are generally more expensive, excluding companies who are big polluters or have poor working conditions can benefit fund performance. ESG strategies has proven to be very successful in Emerging Markets over the last 5 years. Since the start of 2013, the MSCI Emerging Markets Index (M1EMS) is up 20.0% while the sustainable version - which omits badly behaving companies - MSCI Emerging Markets SRI Index (MXEF) is up 25.8%, an out performance of 5.8%! Check out the full article here, and feel free to take advantage of the IG Community "Ask an expert" feature and drop me a question below.
  5. When it comes to long term investing should you really worry about timing your investment to perfection if you are looking to invest over the next 10, 20 or 30 years? Investing in the stock market can be highly beneficial if you gets the timing just right. But in practice this is particularly difficult to do. Investors who stayed in the market over the past 10 years would have earned solid returns, well above the rate of inflation. Investing £10,000 in the FTSE 100 at the start of 2007 (inconveniently just before the financial crisis) would have generated an 81.5% total return, or 5.6% annualised return, to-date. Not too shabby considering this would have been in the market during one of the worst financial downturns in history! Attempting to time your entry into the market can be costly. We looked at an extreme scenario: what happens to your total return if you miss the best performing day of each year? The same £10,000 investment would have grown to just £11,700, instead of £18,500. While this example is admittedly completely unrealistic, it highlights that if you attempt to time the markets, you may can miss some of the best days which contribute to long term portfolio growth. If you are planning to time your entry into today’s market which fundamentals are you looking at to help your decision? Or, if you are sitting on the sidelines for now, what concerns you the most. High equity valuations? Political uncertainty? The withdrawal of ultra-accommodative monetary policy?
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