Help.........dummy needs advise on US stock market

[brit1984]

In response to diceq post:

I would not buy and hold any US or any other stock. My software does however buy and sell daily according to the parameters I set. An brief example: HP bought and held for three years lost $2500. HP bought and traded by the software returned a $5000 profit over the same time frame.

All the replies to deejaiguy were based on gambling the stock or the gold or the whatever would increase in value over time.

I'm suggesting that unemotional trading on slight moves up and down will win the day every day. My day trader friends try to find the buy/sell points according to graphs, rumors, and hocus pocus. In general they lose because they miss the optimum moment.

The stock trading software is linked to an online brokerage, like eTrade, Amritrade, others. The trades are executed nearly instantaneously without human intervention.

Trading can be done on any of the major markets, US or other wise.

Being skeptical is healthy, but for curiosity sake take a good look. www.cooltraderpro.com/traveler

"trading on slight moves up and down will win the day every day"...

unless the price moves the other way or not far enough in the way that you bet to outweigh the transaction costs

your advice is dangerous, wrong and really quite bizarre (although the motivation for your posting is very clear)

in future, please don't spam this site with links to shady commercial sites, and silly preamble

Edited November 26, 2013 by brit1984

[yourauntbob]

Love seeing fellow deadheads in Thailand..

Sell them all now. Open a discount brokerage account online. Wait for a crash, check for the one year trailing earnings on the S&P 500 to have fallen to around 8-12, then buy ticker symbol SPY. It is a diversified exchange traded fund of funds replicating the S&P500. Next bull market you will feel like a genius. When to sell after that will be the tricky part....

Agreed except the part on trying to time the market. Buy ETF's. You can get them for large cap or for small caps, or for Asia, Thailand, world funds etc.

This is the best bet especially for someone who knows little about the market. I used to make a living working in the stock market and even I (not to sound like an authority or anything) stay with ETFs. Spread it into several unrelated funds and forget about it.

A few examples

DJ - DIA

S&P - SPY

Thailand- THD

World- EFG

Gold- GLD

Good luck!

[meand]

If I was you, I'd wit until the annual reports come out. No need to do anything rash or to make any uninformed decisions. Read through the annual reports, check out the numbers, if you like what you see, hold it. If you don't, sell. I like the looks of the US market right now myself.

[fletchsmile]

Sorry to hear of your loss Jaideeguy.

I'm a believer in equities over the long term, but given the circumstances my suggestions would differ a bit to usual.

I'd suggest you sell most of them for the following reasons:

- US stock market has had a good run, and looks quite fully valued

- These were your father's shares so might have an emotional element of attachment to you. People in this situation sometimes sort of feel like keeping them as an emotional link to the past, which is understandable. In reality the equity markets and shares have no feelings towards your situation and will not treat you any different to anyone else, so beware holding poor investments just because they're a link to the past - the markets won't reciprocate.

- You sound like you don't fully know what your invested in and why. Key with investments is to understand what your investments are and why, and make sure they meet your objectives

- You've just come into an inheritance. Let the dust settle. Re-evaluate your own finances circumstances and needs, then how best to achieve them. You now have more wealth than before (at least in money terms) so you should look again at all your finances/ assets/ income and review where you are

- Investments are best made free of emotions. This is not necessarily the best time for this.

- There may be a few big household names/blue chips you're happy with, so you might want to keep a few - even if for sentimental reasons - but anything you don't know well, know why you're holding just sell out.

- The costs of selling are small. You could always buy back later if you decide it is right for you, and the transaction costs will be at most a couple of percent

- The risk of selling is that the market rises significantly and you kick yourself. See the first point though. There is always a risk that you could have sold for more, but on balance there's plenty of risks in the other direction you'll be stepping away from.

As to what to do next, some ideas:

- Take your time, re-evaluate your life and finances. No need to rush anywhere markets of all kinds will still be around. And indeed avoid anyone who pressures you otherwise at this time.

- You might also want to think of making a small charitable donation somewhere in memory of your dad. Under priveleged school/ kid / disease foundation

- Buy yourself something that will remind you of your dad and where it came from. Shares are just digits in cyberspace. Something physical you can see and touch that you've wanted but didn't feel you had the cash for before....

Best Wishes

Cheers

Fletch

[jaideeguy]

Thanks for the input so far and thanks for this Thanksgiving holiday that will allow me to procrastinate a few more days.

What if I make my choices of the ‘dogs’ [low yielding] stocks/funds/ETF’s/etc based on my Fidelity statement which I have easy access to on line which gives ‘change since purchase’ both in Dollar and % and first sell off the losers?? Would a current statement reveal the real losers during these ‘boom times’ by that method??

My objective is to streamline my portfolio and make it as low maintenance as possible.

I’m not much worried about capitol gains as my $ income is quite low [for better and worse] and I will be selling at a loss, right?

I now have a total of 60 holdings and 20% are showing red and maybe the same amount with small % of gains in the ‘change since purchase’.

I’d like to reduce my total holdings to 20 or so…………….a much more manageable number.

I know that’s a simplistic approach, but is it a good one??

Unfortunately Fidelity will not give financial advise or even advise in navigating their complicated and always changing website [by international law].

Still no professional advisory services here in LOS??

Fletch, thanks for your input.

[meand]

I would consider investing much of it in an index fund in the US. Maybe put another part of it in something outside of the US.

Edited November 27, 2013 by meand

[fletchsmile]

Good idea to reduce the number of holdings and make it more manageable - 60 is probably too many

For individual stocks, picking based on past performance alone can be a bad idea. There's a big risk of picking stocks that have already become overvalued, on the other hand stocks that have fallen in price may now be undervalued, so you could be in some cases going in the wrong direction. There's also often research that shows year to year the best performer one year often underperforms the next (on average of course), given stocks often move in cycles. You really want to be looking forward to how you think they'll do rather than driving looking in the rear view mirror. Might help to have a look at a few brokers' forecasts for that, to at least weed out some of the weaker ones.

eg if you look on Digital Look you'll see no. of brokers and whether they rate strong buy > strong sell. Bear in mind they often have an interest in encouraging people to buy as it generates business. On the other hand if a lot are saying sell, unless you know something they don't, it can make sense to sell yourself if you don't know anything about the stocks.

http://www.digitallook.com/cgi-bin/dlmedia/security.cgi?csi=50095&action=constituents&username=&ac=

BTW: US stocks I own and intend keeping longer term - mainly for divs or expectation of - are:

AAPL

GE

GT

INTC

JPM

I'm not a big fan of US equities or USD to be honest and prefer elsewhere, but am comfortable holding these in paricular

BTW: If you live and work in Thailand, park some money in a long term equity fund (LTF). Thai equities/assets, THB, + tax relief at your marginal rate of tax (over 30% for some)

Cheers

Fletch:)

[DogNo1]

It doesn't seem as though any posters have any experience with income security investing. Everyone mentions stocks, mutual funds or ETFs. There are other investment vehicles which don't particularly aim for capital gain but rather for yearly return with (hopefully) low price volatility and qualified (15%) tax liability. I earlier recommended Richard Lehmann's Income Securities Investor Newsletter. There are others besides his. You mentioned that you have a low current income so perhaps you could use a 4.5% - 5% return on your holdings to supplement your present income. Regarding the number of holdings that you should be managing, the issue is that you should have a number that allows you to have no more than 3% - 4% in any one holding. I suggest that you research preferred stocks, closed-end funds, master limited partnerships, dividend oriented ETFs and stable, high-dividend paying stocks. Trying to time the market so that you buy and sell at the optimal moments is very difficult. Older people who need the income should be wringing that income out of their holdings on a yearly basis, not waiting for the optimal moment to realize capital gains. Bear markets do occur and can continue for a long while. In the words of Sir John Templeton, "The market can remain irrational longer than you can remain solvent.". Of course, there is always the individual investor's responsibility of exercising due diligence. Don't depend on tricky schemes such as investing in "The dogs of the DOW" with the expectation that because certain stocks are down for a while, they will necessarily recover and do better than others in the years ahead. They might not. Anyway, good luck with your money!

Sent from my Nexus 10 using Thaivisa Connect Thailand mobile app

Edited November 27, 2013 by DogNo1

[TheNativeSon]

You have definitely come to the wrong place, for advice on that topic. Try a professional financial adviser located in the US, instead.

[TheNativeSon]

You have definitely come to the wrong place, for advice on that topic. Try a professional financial adviser located in the US, instead.

BTW - has "anyone" on this forum given you any "usable" contact info, re: a reliable, knowledgeable and trustworthy broker that they know of?

[meand]

You have definitely come to the wrong place, for advice on that topic. Try a professional financial adviser located in the US, instead.

People always say this, yet ironically I have seen some great posts in this investment forum. I guess knowing who you are listening to helps. I wont name any names, but I think there are some poster in here who understand the Thai and international markets very well, and they are very altruistic with their knowledge.

Even more ironically, I think paid advice can be horrendously self serving for the "professional".

Nothing wrong with asking here, and doing your due diligence when it comes to who knows what they are talking about, of which I am certainly not one who does

[meand]

Sorry to hear of your loss Jaideeguy.

I'm a believer in equities over the long term, but given the circumstances my suggestions would differ a bit to usual.

I'd suggest you sell most of them for the following reasons:

- US stock market has had a good run, and looks quite fully valued

- These were your father's shares so might have an emotional element of attachment to you. People in this situation sometimes sort of feel like keeping them as an emotional link to the past, which is understandable. In reality the equity markets and shares have no feelings towards your situation and will not treat you any different to anyone else, so beware holding poor investments just because they're a link to the past - the markets won't reciprocate.

- You sound like you don't fully know what your invested in and why. Key with investments is to understand what your investments are and why, and make sure they meet your objectives

- You've just come into an inheritance. Let the dust settle. Re-evaluate your own finances circumstances and needs, then how best to achieve them. You now have more wealth than before (at least in money terms) so you should look again at all your finances/ assets/ income and review where you are

- Investments are best made free of emotions. This is not necessarily the best time for this.

- There may be a few big household names/blue chips you're happy with, so you might want to keep a few - even if for sentimental reasons - but anything you don't know well, know why you're holding just sell out.

- The costs of selling are small. You could always buy back later if you decide it is right for you, and the transaction costs will be at most a couple of percent

- The risk of selling is that the market rises significantly and you kick yourself. See the first point though. There is always a risk that you could have sold for more, but on balance there's plenty of risks in the other direction you'll be stepping away from.

As to what to do next, some ideas:

- Take your time, re-evaluate your life and finances. No need to rush anywhere markets of all kinds will still be around. And indeed avoid anyone who pressures you otherwise at this time.

- You might also want to think of making a small charitable donation somewhere in memory of your dad. Under priveleged school/ kid / disease foundation

- Buy yourself something that will remind you of your dad and where it came from. Shares are just digits in cyberspace. Something physical you can see and touch that you've wanted but didn't feel you had the cash for before....

Best Wishes

Cheers

Fletch

Fletchsmile,

What do you think of the assertion that the S&P 500 is near its long term annual average of about 7 or 8%, and thus not into the "scary height" zone? I take it you disagree? I would love to hear your thoughts

[fletchsmile]

Fletchsmile,

What do you think of the assertion that the S&P 500 is near its long term annual average of about 7 or 8%, and thus not into the "scary height" zone? I take it you disagree? I would love to hear your thoughts

I'm not quite sure which metric you are referring to for "near its long term average of about 7 or 8%"

For why I don't find US equities / S&P particularly attractive, though, there are a variety of reasons as to why I prefer other markets.

Core reasons that will always be there include:

- I'm not American, so that significantly reduces reasons for holding. I'm a believer that a core part of your investments as a general rule should be equity investments from your own country, as equities are a great asset class over time that should help offset inflation, and help you share in wealth increases in your country. If your country does well you want to share in it. On the other hand if it does badly, relatively you will be like others. So it's a case of matching. If I were American and lived there my weighting would be much higher.

- I don't have any natural use for USD so don't want too much currency exposure. I believe you should have key holdings in currencies where you expect to spend your time and money, (and where you came from/may go back)

- I grew up and have spent most of my life in other countries, so my first hand knowledge of US companies is more limited. In UK and Thailand for example I grew up seeing first hand companies there and they are part of my way of life. I like investing in what I know, understand and can see/experience

Long-term views on the US include:

- I think America's best days, relatively speaking are behind it. It's a country that was once dominant. That will continue to be eroded, and as we're seeing some of the balance of power will naturally shift to Asia

- USD will be on a long term decline and will continue to see its importance eroded. In the last few years in particular people are looking for alternatives. It's dominance as the world's reserve currency will unlikely ever be so high again and will continue to decline.

- I haven't been bullish long term on USD for over a decade. I was also happy to have low exposures to US in the 2000's and not partake much in the lost decade

- It's a developed country, so harder to make sustained high growth compared to other countries in emerging markets or frontier markets which start from lower bases, and more growth potential

- In many areas it's a saturated and mature market. That applies to the equity markets as well. Part of the reason the US did well in the 20th century was the extension of equity ownership with more people entering the market. That had in my view significant demand influences which helped drive prices higher. If you compare say Thailand share ownership is not so wide (something like less than 5% of the population have equity exposure), once it increases that's a lot of future demand to come for the same companies and their shares, albeit there'll be some new ones but supply growing less than demand

- Unfavourable demographics and aging population

Current Views on the US:

- Above historical P/E rates and other measures

- Already had a good run

- Lack of leadership in government

- QE creating artificial scenarios that have over inflated the market

- There are many other artificial and manipulated parts in the system

- Large economic imbalances - serious deficits and debts that can't balance its books

- Politcians and system that has lost its way

- Better opportunities elsewhere in a changing world

That said, from time to time it does have its attractions, and it does have some good points, eg relative stability. Also I appreciate the use as diversification for equities as well as currencies. Although in decline it's worth a small part of my portfolio for diversification.

Cheers

Fletch

Edited November 29, 2013 by fletchsmile

[DogNo1]

For those who are talking up equities (stocks, mutual funds & ETFs) this implies a dependence on capital gains for the source of income which requires a good knowledge of when to buy and when to sell. It's very easy to get this wrong. All of the financial advisors I've employed thus far have made serious mistakes in their advice. By using income-security investments, I've largely removed buying and selling timing from the picture.

[brit1984]

For those who are talking up equities (stocks, mutual funds & ETFs) this implies a dependence on capital gains for the source of income which requires a good knowledge of when to buy and when to sell. It's very easy to get this wrong. All of the financial advisors I've employed thus far have made serious mistakes in their advice. By using income-security investments, I've largely removed buying and selling timing from the picture.

not really sure what you mean... by investing in fixed income securities you may be achieving a higher nominal yield today but you are doing so by sacrificing inflation protection (through the potential for share price appreciation and dividend growth)

[brit1984]

^ and fixed income securities do not always trade at par... over recent years lots of credit investors have made capital losses / gains by selling / buying paper on the secondary market

[DogNo1]

brit1984: I didn't say "fixed.". Most of my investments, though not all, do allow for capital and dividend/interest growth, just not as much as equities that are focused on the growth of the price of their shares. My investments make capital growth a secondary goal, while providing a high monthly income is their primary goal. For example, the shares of BTE may rise or fall in value and the dividend that they pay may rise or fall depending on 1. the price of the shares, and 2. the amount of dividend the board is willing to pay, but historically, the dividend has been generous although the price has fallen recently. Income securities will have price volatility but their payouts remain pretty steady. I'm willing to ride out price volatility so long as my income stream remains pretty steady and I don't suffer significant capital loss. It's a different game than following the S&P. I won't gain (or lose) as much as the index does in the short run but my income stream should match or better its gains over time. In the meantime, I have that money to spend every month.

[NeverSure]

How anybody can have their money in the U.S stock market is beyond me. If it wasn't for the FED propping it up it would have collapsed already. Just a matter of time until the pyramid scheme collapses like a deck of cards.

Like so many others, you don't seem to be able to separate the US private sector from the government. It is possible for the government to engage in massive waste and incur extensive debt while the private sector booms, goes global, and sets new records for profits and surplus cash.

Have you heard of the US oil boom? The US is loaded with natural resources, leads the world by far in technology, and corporations are booming. If you write it off instead of investing in its "emerging markets" you may - may - miss some big opportunities. That said, I wouldn't buy US stocks at random at these highs.

I am buying some stock in start up oil companies which have actually found oil and gas.

"Impact of US oil boom: Global reordering."

"With reliance on foreign oil waning, the balance of power is shifting around the globe with unexpected winners and losers and a renewal of US power.

MEXICO CITY — For the past 40 years, U.S. presidents have launched distant wars, allied with autocratic sheikhs and dispatched naval fleets to protect sea lanes, all for the imperative of keeping foreign oil spigots flowing.

That imperative has now subsided. Rather suddenly, the center of gravity of global energy production has swung toward the Americas as shale oil and gas fields in North Dakota and Texas hum with activity. America is moving to the fore as the world's largest producer of petroleum and natural gas.

That change will reorder the globe in ways large and small." (emphasis mine)

MSN News November 28, 2013

[paddyjenkins]

It doesn't seem as though any posters have any experience with income security investing. Everyone mentions stocks, mutual funds or ETFs. There are other investment vehicles which don't particularly aim for capital gain but rather for yearly return with (hopefully) low price volatility and qualified (15%) tax liability. I earlier recommended Richard Lehmann's Income Securities Investor Newsletter. There are others besides his. You mentioned that you have a low current income so perhaps you could use a 4.5% - 5% return on your holdings to supplement your present income. Regarding the number of holdings that you should be managing, the issue is that you should have a number that allows you to have no more than 3% - 4% in any one holding. I suggest that you research preferred stocks, closed-end funds, master limited partnerships, dividend oriented ETFs and stable, high-dividend paying stocks. Trying to time the market so that you buy and sell at the optimal moments is very difficult. Older people who need the income should be wringing that income out of their holdings on a yearly basis, not waiting for the optimal moment to realize capital gains. Bear markets do occur and can continue for a long while. In the words of Sir John Templeton, "The market can remain irrational longer than you can remain solvent.". Of course, there is always the individual investor's responsibility of exercising due diligence. Don't depend on tricky schemes such as investing in "The dogs of the DOW" with the expectation that because certain stocks are down for a while, they will necessarily recover and do better than others in the years ahead. They might not. Anyway, good luck with your money!

Sent from my Nexus 10 using Thaivisa Connect Thailand mobile app

The trouble is many of the high income securities you mention could also also fall massively in a stock market crash. None of them are riskless. For example just look at how far some preference shares fell in the last crash, and if the issuer fails, they will fail before even the company bonds. As for high dividend stocks, they are also subject to market volatility. What is worse is that if a company pays out too much in dividends and is left with little cash then it can neither invest for growth or have any cushion in a downturn. In fact, its even worse than that because high dividend payers often raise cash through rights issues that then dilute the equity value. Similar arguments apply to MLP's and closed end funds.

I am not saying it is bad to invest in these things, indeed I have quite a few myself, but I am saying it is wrong to regard them as significantly lower in risk then a regular stock that pays an average dividend. There is a price for everything, I am concerned that the chase for yield has created a bubble in some high income securities, just as low rates has created a bubble in just about all other risk assets that I know of.

I think what is needed is evidence that high dividend securities have as a class out performed low dividend stocks in a risk adjusted way, eg, long term Sharpe ratio. Meanwhile, we need to be highly selective in which high dividend securities we purchase.

Edited December 1, 2013 by paddyjenkins

[Gonsalviz]

I just sold out 90% of my stocks and am now sitting on cash. I made 14% on this last climb and am certain that that will suffice me for a few years considering the current interest rates.

[brit1984]

brit1984: I didn't say "fixed.". Most of my investments, though not all, do allow for capital and dividend/interest growth, just not as much as equities that are focused on the growth of the price of their shares. My investments make capital growth a secondary goal, while providing a high monthly income is their primary goal. For example, the shares of BTE may rise or fall in value and the dividend that they pay may rise or fall depending on 1. the price of the shares, and 2. the amount of dividend the board is willing to pay, but historically, the dividend has been generous although the price has fallen recently. Income securities will have price volatility but their payouts remain pretty steady. I'm willing to ride out price volatility so long as my income stream remains pretty steady and I don't suffer significant capital loss. It's a different game than following the S&P. I won't gain (or lose) as much as the index does in the short run but my income stream should match or better its gains over time. In the meantime, I have that money to spend every month.

sorry your previous post was not so clear and i was worried you were misunderstanding (and spreading misunderstanding to others)... but it seems you well understand the sacrifices you have made (in future value) to achieve that higher yield today... that is a personal choice and the right balance in any portfolio varies for each individual... for some people, especially (dare i say it) those who are coming towards the end of their life and expect their heirs to cash in / re-allocate their assets thereafter, but want to maximize their income to enjoy life in the meantime, an investment strategy focused on income (as you prescribe) makes a lot of sense

[DogNo1]

Paddyjenkins is quite right in saying that income securities also carry risks, especially the high dividend payers. I've tried to select those which pay a moderate income and have stable financials with a good history. I have been burned by a few which have suddenly lowered their dividends or resorted to returning capital to maintain their dividends, thus lowering the value of their shares but overall I have been able to earn around 4.5% while maintaining my capital. To respond to Brit 1984's comment - you have defined my strategy. I'm now 71 and don't feel that I need to accumulate any more for my daughter to inherit. Of course, as paddyjenkins observes, if there is a severe market crash, I also stand to lose a lot. I could SURVIVE a 40% downturn but it would impact my ability to stay in five-star hotels and fly first class. I'd just have to live more modestly but I'd still survive with enough income for necessities.

Sent from my Nexus 10 using Thaivisa Connect Thailand mobile app

[fletchsmile]

DogNo.1 re post#44

There are plenty of stocks mutual funds and ETFS that are aimed at generating income.

Since my dad passed away I manage my mum s money for her particularly on investments. The aim is mainly to generate income with some small potential for capital growth. To exceed cash rates by taking some small extra risk. 75% plus of investments are in unit trusts/ mutual funds designed to generate income.

OP didnt mention much about his objectives. Only that he is interested in US stock market.

Your strategy is a reasonable one for your objectives - similar to my mum s. I suspect his objectives are different given age and not retired.

One reason I prefer income based unit trusts to individual stocks for someone your or my mum s age is to minimise admin. Also when my mum eventually passes away the admin is much easier dealing with a portfolio of unit trusts all under the same umbrella as the provider I use for myself. There s a lot more admin dealing with individual shares in someone s estate once they pass on.

Cheers Fletch

Sent from my GT-I9152 using Thaivisa Connect Thailand mobile app

Edited December 2, 2013 by fletchsmile

[Berkshire]

How anybody can have their money in the U.S stock market is beyond me. If it wasn't for the FED propping it up it would have collapsed already. Just a matter of time until the pyramid scheme collapses like a deck of cards.

But you can still make money in the market, regardless of whether it goes up or down. It's like the old saying....bulls and bears make money, but pigs and sheep get slaughtered.

[SheungWan]

Thanks for the replies so far. It seems that the general consensus is to sell ASAP and that is my gut feeling too.

But my home currency is US$ and I don't have much faith in that hanging in there for much longer.

All the holdings are with a reputable broker [Fidelity] and their [cash] money market pays next to nothing in interest, but is secure.

Assume that the THB is not too secure now and I have way too much invested here already.

I'm past my mid 60's and can live out my life, but would like to leave something for my Thai family.

What about gold [physical or futures or mining]??

And no resources here in LOS for US financial planning??

Gold has dropped near 30% this year. Do you wish to be glutton for punishment?

[puukao]

remember to take advice from ONLY those who prove they have made money. credibility is everything.

since 90% lose at trading, always think the person giving advice is in the 90%.

if they sell "expert advice".... run.

[Ludacris]

Read "A Random Walk Down Wall Street" by Malkiel.

I strongly recommend you follow his portfolio and indexing recommendations instead of asking for advice here.

[DogNo1]

Hi fletchsmile: What is a unit trust? You wrote unit trust/mutual funds so I am guessing that a unit trust would be a collection of securities (stocks, bonds, etc.) managed under one name. I own some shares of the Fairholme Fund (FAIRX) which is managed by Bruce Berkowitz and his team. It's not great for income but has gained 47% in value since I bought it. At present, it's my only play for capital gains other than the occasional synthetic long option on promising companies. I'd appreciate knowing more about what a unit trust is. Thanks.

[paddyjenkins]

Thanks for the replies so far. It seems that the general consensus is to sell ASAP and that is my gut feeling too.

But my home currency is US$ and I don't have much faith in that hanging in there for much longer.

All the holdings are with a reputable broker [Fidelity] and their [cash] money market pays next to nothing in interest, but is secure.

Assume that the THB is not too secure now and I have way too much invested here already.

I'm past my mid 60's and can live out my life, but would like to leave something for my Thai family.

What about gold [physical or futures or mining]??

And no resources here in LOS for US financial planning??

Gold has dropped near 30% this year. Do you wish to be glutton for punishment?

yes and where have all those gold bugs gone...the ones that bleat on about fiat currencies, new world orders, hyperinflation...all that stuff they get from the gold bug websites and repeat like parrots....they've been awfully quite recently

[fletchsmile]

Hi fletchsmile: What is a unit trust? You wrote unit trust/mutual funds so I am guessing that a unit trust would be a collection of securities (stocks, bonds, etc.) managed under one name. I own some shares of the Fairholme Fund (FAIRX) which is managed by Bruce Berkowitz and his team. It's not great for income but has gained 47% in value since I bought it. At present, it's my only play for capital gains other than the occasional synthetic long option on promising companies. I'd appreciate knowing more about what a unit trust is. Thanks.

Unit trusts are open ended funds, very similar to what Americans call mutual funds. Mainly a UK/ European term.

Worth noting that generally US companies pay lower dividends than their UK counterparts, and particularly their Australian counterparts, but retain more earnings for capital growth. For an internationally minded/ based person who can tolerate some foreign exchange risk (depending on base currency), funds focusing on UK or Aus generating income securities offer an opportunity to diversify holdings and a higher level of dividend income than just US focused funds.

Cheers

Fletch