Latest / Merryn Talks Money / Your Questions Answered: Pensions, Capital Gains Tax and More

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Your Questions Answered: Pensions, Capital Gains Tax and More · Merryn Talks Money

0:02
Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
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Speaker 2: Welcome to Maren Talks Your Money, the personal finance edition
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Speaker 2: of Maren Talks Money. In these bonus podcasts, we talk
0:24
Speaker 2: about the best reategues making the most of your money.
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Speaker 2: I'm Maren Zums at Web and with the Senior boardroom.
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Speaker 1: Money just sold off for John step back Guy John Hilm.
0:38
Speaker 1: Now John, we are lucky.
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Speaker 2: We get lots of comments and lots of questions coming
0:41
Speaker 2: into the show. There's all sorts of things that people
0:43
Speaker 2: want to know more about, and things that we haven't
0:45
Speaker 2: address they want us to address, and things we have addressed.
0:47
Speaker 1: That they think we've got wrong. Perfectly reasonable. We're not
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Speaker 1: experts on everything.
0:51
Speaker 2: So this week what we're going to do is going
0:52
Speaker 2: to delve into this mailbox a little bit and address
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Speaker 2: some of the comments and the questions that we've been getting. Now,
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Speaker 2: the first one, I am really really interesting because we
1:01
Speaker 2: talk about this all the time. It's about flows. What
1:03
Speaker 2: makes market moves. Everyone goes about valuations, their valuations that
1:06
Speaker 2: get blah blah it flows how much money is coming,
1:09
Speaker 2: how much money is going out. That's what makes the
1:11
Speaker 2: market go up or down. Supply and demand, Hello, so
1:14
Speaker 2: this one is about this. Hi there, long term listener,
1:16
Speaker 2: appreciate the regular podcast, Thanks very much. And his question
1:20
Speaker 2: is something he says he's been wondering about for ages.
1:22
Speaker 2: Have capital flows into the markets over the last six
1:25
Speaker 2: years or so changed, and if so, how has that
1:28
Speaker 2: affected things? And he talks about himself as an example
1:30
Speaker 2: things in his mid thirties, didn't know anything about investing
1:33
Speaker 2: and never thought about investing pre pandemic. But during that
1:36
Speaker 2: that sort of insane lockdown period when he had loads
1:39
Speaker 2: of time and nothing to do, suddenly he's paying attention,
1:41
Speaker 2: looking at crypto, looking at all the meme socks. And
1:44
Speaker 2: now he has an equity portfolio that he manages through
1:46
Speaker 2: a sort of super low cost online broke up, so
1:49
Speaker 2: it's an app he can almost zero cost trades anytimes.
1:52
Speaker 2: He liked twenty four seven totally easy in a way
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Speaker 2: that it absolutely was not.
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Speaker 1: Even a decade ago.
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Speaker 2: So does that ease plus there's a widespread awareness social media,
2:04
Speaker 2: the endless memes, et cetera, that ease of doing it
2:07
Speaker 2: mean that flows into the market have massively increased, and
2:11
Speaker 2: that as a result, the market has just gone up
2:13
Speaker 2: and up and up.
2:14
Speaker 1: And also did that I would say very clearly is yes.
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Speaker 3: Absolutely. The most obvious example of this is all the
2:20
Speaker 3: stuff that happened with the meme stocks and the game stop.
2:24
Speaker 3: And something actually I found really interesting the other day
2:27
Speaker 3: is I was speaking to a friend we popped over,
2:30
Speaker 3: had dinner with them, speaking to his wife, and she
2:33
Speaker 3: was just fascinated by the Reddit thread and I think
2:37
Speaker 3: it's called walk Street bets the one started, yeah, and
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Speaker 3: I mean it's she wasn't a trader, she wasn't particularly
2:44
Speaker 3: interested in betting and stock, she didn't a robin Hood account,
2:47
Speaker 3: but she just loved reading the chat on the thread.
2:50
Speaker 3: And I was just quite surprised because this was clearly
2:52
Speaker 3: somebody who wasn't, you know, especially engaged in kind of
2:55
Speaker 3: trading on investment, but it was very aware of all
2:58
Speaker 3: of the you know, can I.
3:01
Speaker 1: We have numbers for this as well.
3:02
Speaker 2: If you look at the share of US household wealth
3:04
Speaker 2: held in equities as massive as up to nearly sixty percent,
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Speaker 2: that's more than any other country, and of course the
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Speaker 2: US is the biggest market that those flows into.
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Speaker 1: That that's extraordinary.
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Speaker 2: And then there is am a status saw the other
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Speaker 2: day on retail share of trading every day in US dogs, right,
3:20
Speaker 2: that is doubled, doubled in fifteen years. So I've been
3:24
Speaker 2: thirty five to forty percent of all trading every day
3:27
Speaker 2: is retail investors, ordinary people buying and selling.
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Speaker 1: And that that's new. That's new. And this isn't during.
3:33
Speaker 2: A time when people are stuck at home, and you know,
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Speaker 2: it's not a time even when Americans have piles of savings, right,
3:37
Speaker 2: they've been running down their savings. So is there more
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Speaker 2: flow retail flow into the market, particularly the US market,
3:43
Speaker 2: which we went the US market here, into that market,
3:46
Speaker 2: and is that making a difference. I would say absolutely,
3:49
Speaker 2: because that retail army is going out and buying every day,
3:52
Speaker 2: pouring money in. But of course the important thing to
3:55
Speaker 2: say here is that that can reverse. And in the past,
4:00
Speaker 2: when we've seen huge retail excitement and relentless retail flows
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Speaker 2: in the markets, when it has reversed, it's reversed really nastily.
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Speaker 3: Yeah, And I mean, I suppose the other thing is
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Speaker 3: that some of this stuff is hard to split out
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Speaker 3: from the riser passive in general, and they can relentless
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Speaker 3: increase in the amount of money that's just automatically can
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Speaker 3: stuck into markets in the former kind of like pension
4:26
Speaker 3: accounts rather than trading accounts. But yeah, definitely much as
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Speaker 3: a dislike people describing retail as the dumb money.
4:37
Speaker 1: It isn't the dumb money.
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Speaker 3: I think it is.
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Speaker 2: There's lots of evidence that over the last ten years
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Speaker 2: or so, retail investors have unperformed institutions. And you know,
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Speaker 2: we've looked at that data before, John, but who was it,
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Speaker 2: Simon Evan Cook produced all that data showing that, well,
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Speaker 2: the average fund underperforms, the average active fund underperforms, the
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Speaker 2: average retail investor is often in the fund that outperforms.
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Speaker 1: Sorry interrupt you again, I'm doing too much interrupting of
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Speaker 1: you today. What were you going to say? You don't
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Speaker 1: like the phrase dumb money, but.
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Speaker 3: You're quite rightly, No, I mean, I think it's more
5:08
Speaker 3: just it's it's emblematic of enthusiasm and then kind of
5:12
Speaker 3: overall enthusiasm. So it's not the individual investors are daft.
5:17
Speaker 3: It's just that this is the hot area and so
5:20
Speaker 3: people are attracted to it, and the more to that
5:23
Speaker 3: you see, the more it's kind of like, well, okay,
5:26
Speaker 3: but what happens when the enthusiasm runs It's felt like
5:30
Speaker 3: that for a while to.
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Speaker 2: Be okay anyway, So thank you very much Daniel for
5:34
Speaker 2: that question. And at the end of his question he says,
5:36
Speaker 2: is this nonsense just a thought, Daniel, It's not nonsense.
5:39
Speaker 2: You're absolutely right. We think you're absolutely right. Anyway, Okay,
5:43
Speaker 2: next one. See he's the smart money exactly. There is
5:46
Speaker 2: no dumb money listening to this podcast. Okay, next one.
5:50
Speaker 1: Hi John to Marin.
5:51
Speaker 2: Keep the good work coming. Newsletters and podcasts were all great,
5:53
Speaker 2: Thanks very much. Everyone is beginning to learn how to
5:55
Speaker 2: get that question answered right, you know, full flattery upfront
5:59
Speaker 2: and then somehow floats at the top of the pile. Anyway,
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Speaker 2: this is from Keith Keith Harrison, thank you for this,
6:05
Speaker 2: and he is writing it about NEST. We did a
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Speaker 2: whole little pod talking about NEST, this big pension provider
6:11
Speaker 2: for auto enrollment recently, and I'm actually just going to
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Speaker 2: read his out because we have anything to add to it.
6:17
Speaker 1: Here's the expert here.
6:18
Speaker 2: As the financial advisor, I come across NEST quite frequently.
6:22
Speaker 2: And an interesting aspect of NEST is that you can't
6:26
Speaker 2: partially transfer your money out or transfer out if you're
6:29
Speaker 2: an active member of the scheme. So if the allocation
6:32
Speaker 2: to private assets, which is what John, you and I
6:34
Speaker 2: were talking about the other day, in fact, that nest
6:36
Speaker 2: is allocating this huge tack of money, and I think
6:38
Speaker 2: we rather think maybe too much money to private assets
6:41
Speaker 2: at quite a strange time to do that. Anyway, if
6:43
Speaker 2: it's not your taste, it is very difficult to get out.
6:48
Speaker 2: Your options are fairly limited. So he has given three
6:50
Speaker 2: options for people who listened perhaps to the part we
6:53
Speaker 2: did the other day, and well, god, it's not quite
6:55
Speaker 2: what I want. The first one is speak to your
6:57
Speaker 2: employer see if they will pay into an old alternative scheme.
7:01
Speaker 2: It's unlikely, not very many people will. It's loads of
7:03
Speaker 2: payroll admin if everyone has their own scheme, and it's
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Speaker 2: difficult if you are sort of demonstrating employer governance, etc.
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Speaker 2: So ask but unlikely. Number two, opt out, transfer out completely,
7:16
Speaker 2: opt back in, do this on repeat every so often.
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Speaker 2: Lots of asshole and you may miss some employer contributions
7:23
Speaker 2: along the way, you have time out of the market, etc.
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Speaker 2: So that is one possible way of doing it, but
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Speaker 2: it's not very practical and it's not really that advisable.
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Speaker 2: Number three, keep your contributions to the absolute max employer
7:35
Speaker 2: the employer will match, and anything extra you have, do
7:38
Speaker 2: not do it through your employer, do it into a
7:40
Speaker 2: SIP or use an alternative provider. So you know, those
7:43
Speaker 2: are I think those are really useful points, although actually
7:46
Speaker 2: in the end the answer is are not much you
7:48
Speaker 2: can do about.
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Speaker 1: This, and lots of way.
7:50
Speaker 2: He says, NEST is a soft target for the government
7:52
Speaker 2: due to the terms imposed on it, and lots of
7:54
Speaker 2: people will have literally no practical choice to accept it.
7:57
Speaker 2: So that was a really interesting email. But once we
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Speaker 2: get to the end, there's not much you can do.
8:03
Speaker 3: But I suppose it's useful to at least be aware,
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Speaker 3: and I guess that's all you can say, because the
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Speaker 3: problem is that obviously we ought to enrollment. You know,
8:12
Speaker 3: if you give it up, then you're losing out on
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Speaker 3: the employed contribution and there's almost nothing that's going to
8:18
Speaker 3: be worth that, you know, because when most cases you're
8:21
Speaker 3: already doubling the amount of money you put in. So
8:24
Speaker 3: but you know, it's good to at least be be
8:28
Speaker 3: aware and maybe also have a look at what are
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Speaker 3: the other options, because it's not there's not a single
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Speaker 3: NEST fund at the end of the day, they do
8:35
Speaker 3: have a couple of options, and some of them are
8:37
Speaker 3: more equity heavy than the others. Oh, yes, it was
8:40
Speaker 3: quite tricky you find out exactly what was in them.
8:42
Speaker 3: But anyway, that's.
8:43
Speaker 2: Another Anyway, we're not going into a nest rabbit hole
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Speaker 2: again today.
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Speaker 1: Done with that. This one I think is really Actually
9:01
Speaker 1: a few years ago I moved.
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Speaker 2: Around half far assets to a discretionary fund manager, and
9:05
Speaker 2: a rising market has led to some nice gains. However,
9:08
Speaker 2: the constant erosion of the capital gains tax allowance, fiddling
9:12
Speaker 2: with the rates, etc. Now it means that each year
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Speaker 2: I am presented with a tally of crystallized gains upon
9:17
Speaker 2: which I must play CGT and part of my portfolio,
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Speaker 2: I imagine myself. I can of course decide when or
9:23
Speaker 2: whether to crystalize gains, and can choose to defer CGT
9:26
Speaker 2: indefinitely if I wish. Whilst having gains to tax is
9:29
Speaker 2: a nice problem to have, I wonder Tom address the
9:32
Speaker 2: rosen cons of discretionary wealth management, whether any advantages to
9:35
Speaker 2: paying as you go CGT. Now this is really interesting
9:40
Speaker 2: because obviously, if you are managing your own money, you
9:42
Speaker 2: can decide to yourself what you sell when you sell
9:44
Speaker 2: at how much.
9:44
Speaker 1: Capital gains you pay.
9:45
Speaker 2: And then when he's talking about discretionary fund managers, he
9:49
Speaker 2: is talking the one he uses is a passive strategy.
9:52
Speaker 2: It's the same for everybody. You choose between a risk level,
9:55
Speaker 2: and then everyone's money is managed in exactly the same way.
9:58
Speaker 2: So the CGT he comes when it comes. You know,
10:01
Speaker 2: you make the capital gains when you make the capital gains,
10:04
Speaker 2: And that's different to using a much more individually based
10:07
Speaker 2: discretionary fund manager, which you might have viewed maybe a
10:10
Speaker 2: lot more money, or maybe you've.
10:11
Speaker 1: Had a different approach, or you're prepared for the higher fees.
10:13
Speaker 2: Whatever it is where you have one guy or woman
10:15
Speaker 2: looking after your money in particular, and your portfolio may
10:19
Speaker 2: be different to everybody else's, and you can specify whether
10:22
Speaker 2: it is that you want to make capital gains or
10:24
Speaker 2: not in any particular year. Obviously that you can't avoid
10:27
Speaker 2: making capital gains all in, but you have more discretion
10:30
Speaker 2: over it if you use an old fashion fund wealth
10:33
Speaker 2: manager than you might have used one of the more
10:35
Speaker 2: modern ones, where you're cost to lower because your portfolio
10:37
Speaker 2: is more generic. So the question there is quite interesting
10:41
Speaker 2: because it's about, well, what if I'm going to use
10:42
Speaker 2: a wealth manager.
10:43
Speaker 1: What kind of wealth manager should I use? Which is
10:45
Speaker 1: something that we talk.
10:46
Speaker 2: About a lot on the podcast, and the kind that
10:50
Speaker 2: he is talking about that will be much cheaper. The
10:52
Speaker 2: fees will probably be much lower because your portfolio is
10:55
Speaker 2: not being managed individually. But you do have this problem
10:59
Speaker 2: now I use this type. I use both types actually,
11:02
Speaker 2: and if you use the ones as I say that
11:04
Speaker 2: had these generic portfolios, that seems to be the place
11:07
Speaker 2: to use for your SIP and your iSER rappers.
11:10
Speaker 1: Because then the problem doesn't.
11:11
Speaker 2: Rat makes sense any As he says, it's a good
11:16
Speaker 2: problem to have, but it's an increasingly difficult problem because
11:18
Speaker 2: the CGT allowances now so very low.
11:22
Speaker 3: I suppose people didn't think about CGT a lot because
11:26
Speaker 3: the actual allowance of self used to basically be the
11:29
Speaker 3: same as the Hazer allowance. But now the kind of
11:32
Speaker 3: tax free amount you can profit is just three grand.
11:35
Speaker 3: And the honest truth is that for most people with
11:38
Speaker 3: any decent amount of investment outside of the rapper, that
11:43
Speaker 3: is going to become an issue. And it's very galling
11:46
Speaker 3: to have to pay, you know, kind of like you know,
11:49
Speaker 3: a huge chunk of of your hard dayned investment gains
11:53
Speaker 3: over the puplic three.
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Speaker 2: And it's also worth saying that that those gains, given
11:57
Speaker 2: that the allowance is so low, it will be the
11:59
Speaker 2: case a lot of what you are being taxed on
12:01
Speaker 2: is purely inflation. So you know, make you ten percent gain,
12:05
Speaker 2: and inflation has been five percent, you've only made five percent,
12:07
Speaker 2: but your tax on the entire gain, So that is
12:10
Speaker 2: a genuine wealth tax.
12:12
Speaker 1: You are being taxed on the real.
12:13
Speaker 2: On the nominal value, not the real value of your investment,
12:17
Speaker 2: so that that capital gains is a big wealth tax.
12:19
Speaker 1: I can see where it's so distressing for people to
12:21
Speaker 1: see it come through like that.
12:23
Speaker 2: But then of course there is the argument that is
12:26
Speaker 2: better to pay your capital gains as they come, because
12:29
Speaker 2: you then run into this really knotty problem later in
12:33
Speaker 2: life if you do not pay capital gains on a
12:36
Speaker 2: pay as you go basis, where you get you know,
12:38
Speaker 2: maybe into your seventies, you have a massive potential capital
12:43
Speaker 2: gains liability and you find yourself unable to sell anything
12:47
Speaker 2: because you cannot bring yourself to sell a large chunk
12:50
Speaker 2: of assets and pay capital gain tax on it when
12:53
Speaker 2: you know that you will shortly or your heirs will
12:57
Speaker 2: shortly be paying inheritance tax on thosesets. So you find
13:01
Speaker 2: a lot of people running into problems. And you may say, again,
13:04
Speaker 2: these are nice problems to have, but there are problems
13:06
Speaker 2: nonetheless where you find it too difficult to sell. And
13:10
Speaker 2: of course on death, the capital gains tax liability disappears
13:14
Speaker 2: and effectively replaced with the IHT liability. If you sell
13:17
Speaker 2: before you end up paying twice. So I totally see
13:19
Speaker 2: why people get very stressed about that.
13:22
Speaker 1: So maybe it's better.
13:23
Speaker 2: Not to run up these huge paper gains anyway.
13:30
Speaker 3: Don't bother. I mean this sort of like takes us
13:32
Speaker 3: back to the problem that we often talk about, which
13:35
Speaker 3: is the behavioral distortions that the existence of the tax
13:39
Speaker 3: and the first place, which is one thing, but the
13:41
Speaker 3: fact that it does constantly change, because not only do
13:43
Speaker 3: you have to sit down and think, well, am I
13:46
Speaker 3: going to take this gain now because I might not
13:48
Speaker 3: want it in the future when I've got even more
13:50
Speaker 3: profit the bank hopefully, but there's also the question of, well,
13:55
Speaker 3: they've reduced the capital gains tax allowance. There's been quartered
13:58
Speaker 3: in a very short space of time, so what arms
14:01
Speaker 3: if they just get DYA altogether? And so you have
14:04
Speaker 3: to sort of take an account the direction of taxation
14:08
Speaker 3: policy as well.
14:09
Speaker 2: There's always a chance, I mean, hit me out right,
14:11
Speaker 2: There's always a chance that at some point we have
14:14
Speaker 2: an administration that vaguely comes to its sensors and understands
14:18
Speaker 2: that wealth creation is not in some way evil and
14:21
Speaker 2: stops taxing you on inflation and stops taxing you only
14:24
Speaker 2: on genuine gains that you know, wealth. Wealth taxes across
14:27
Speaker 2: the board disappear. And it's so important, doesn't it, to
14:29
Speaker 2: remember that the UK is basically the home of wealth taxes.
14:32
Speaker 1: We have more than anybody else.
14:33
Speaker 2: We don't call them wealth taxes, but boy, boy, do
14:35
Speaker 2: we have wealth taxes?
14:37
Speaker 1: For fun? Should we name them? Should we name them
14:39
Speaker 1: just for fun? Were here?
14:40
Speaker 3: HD? We should HD?
14:42
Speaker 2: Capital gains, stam duty on your house, stamp duty on
14:46
Speaker 2: your e trading constantly endless damn duty. Luxury car tax
14:52
Speaker 2: you know by an expensive car, not even expensive car
14:55
Speaker 2: these days, extra passenger tax when you fly business class,
14:58
Speaker 2: premium agonomy, whatever.
15:01
Speaker 3: Well, I mean, I think that's pretty a pretty good
15:03
Speaker 3: chunk of them. And I think again, the fact that
15:07
Speaker 3: they're not called wealth taxes doesn't mean then they haven't
15:10
Speaker 3: wealth taxes. I mean, there's certain conditions where they can
15:14
Speaker 3: have additional You could argue that the additional council tax
15:19
Speaker 3: is also going to be a wealth tax as well.
15:21
Speaker 1: Definitely the mansion tax that's coming.
15:23
Speaker 3: Yes, the mansion tax. Yeah, there's lots of stuff already.
15:26
Speaker 1: Anyway, I'm sorry, Douglas. We haven't really helped there.
15:28
Speaker 2: All we can say is a naughty problem, lady problem,
15:34
Speaker 2: pay somebody else more.
15:36
Speaker 3: It's that crystal ball element combined with you know, the
15:40
Speaker 3: the various assumptions you would have to make about the
15:44
Speaker 3: maths and the spreadsheets and working out right, Well, if
15:46
Speaker 3: I make this return them a better crystallizing this year,
15:49
Speaker 3: but what if someone gets in in twenty twenty nine
15:52
Speaker 3: and ditches all of these you know rules, or what
15:55
Speaker 3: if somebody gets in in twenty twenty nine and means
15:57
Speaker 3: that you you know, you've got zero capital game tax exemption,
16:01
Speaker 3: so it's just two. Yeah, there's too many variables, and
16:09
Speaker 3: I think it would be ideal if governments thought about
16:13
Speaker 3: that sort of thing whenever they were passing these rules.
16:17
Speaker 3: There's some there's a premium to keeping things in place
16:21
Speaker 3: for the long term, even if they're bad.
16:23
Speaker 2: No John change with the change of sakes. It's it's
16:25
Speaker 2: sake to change that one. Something must be done, Something
16:29
Speaker 2: must be done.
16:29
Speaker 3: Yeah, all right, moving on, maybe perfectly clear.
16:31
Speaker 1: Moving on right.
16:34
Speaker 2: This one is a very long conversation, but it's also
16:36
Speaker 2: a conversation we have had before. So I can direct
16:39
Speaker 2: you to listen to previous podcasts and we'll put a
16:41
Speaker 2: link in the genes for a podcast in which we
16:42
Speaker 2: have discussed this. But nonetheless, dear Marin very much enjoy
16:46
Speaker 2: your excellent podcast.
16:47
Speaker 1: Thank you very much. Robert and I have a.
16:49
Speaker 2: Question that maybe have interested to discuss, must discuss navy,
16:52
Speaker 2: which fund and which market to invest in? What is
16:54
Speaker 2: the actual data, say, from the last forty years of
16:57
Speaker 2: picking a mixed bag of funds and ATF's investment trus
16:59
Speaker 2: versus is putting it all into a low cost Vanguard
17:02
Speaker 2: world tracker or combination of passive trackers?
17:05
Speaker 1: What is best?
17:05
Speaker 2: Now we've talked about this a lot on the basis
17:07
Speaker 2: that a combination of passive trackers, you are making active decisions,
17:12
Speaker 2: so many active decisions. We can't compare that with a
17:14
Speaker 2: random group of funds and investment trust because you've made
17:16
Speaker 2: this basically the same amount of active decisions, So don't know.
17:20
Speaker 1: It depends what you shows now on the matter.
17:22
Speaker 2: Of would it be better to choose one low cost
17:25
Speaker 2: Vanguard World tracker and have held it over the last ten, fifteen,
17:29
Speaker 2: twenty thirty years and nothing else at all? Given the
17:32
Speaker 2: outperformance of the US market and it's waiting in that
17:36
Speaker 2: tracker over the last Where are we now twenty years
17:38
Speaker 2: or so? Probably yes, But then again, what basket of
17:44
Speaker 2: funds and ETFs are you going to track it against?
17:48
Speaker 2: It's an impossible question. Has passive beaten average active over.
17:54
Speaker 1: The last decade two decades? Yeah? Probably Red John, Yeah.
17:58
Speaker 3: I mean we dead the figures on this the last
18:00
Speaker 3: time it came up, and over forty years it was
18:03
Speaker 3: close on it was more than nine percent annual returned
18:05
Speaker 3: a year for the one hundred percent equities, but a
18:08
Speaker 3: global world tracker, which is a pretty damn geaked return.
18:14
Speaker 3: And I think we worked to the Barksher Hathaway had
18:17
Speaker 3: done about twice that, and Scottish Mortgage had done something similar.
18:22
Speaker 3: But the question was you would have had no qualms
18:25
Speaker 3: about putting a hundred percent of your equity portfolio into
18:27
Speaker 3: a global tracker, because that's just a passive thing. You
18:31
Speaker 3: would have probably committed it to one buffet in the
18:33
Speaker 3: late eighties because by then he had a great you know,
18:36
Speaker 3: reputation even then. But there is no way that you
18:39
Speaker 3: would have put one hundred percent of your fund into
18:41
Speaker 3: an unproven prodracy product like Scottish mortgage at that point,
18:45
Speaker 3: and you certainly wouldn't have held onto it for probably
18:47
Speaker 3: the first you know, fifteen years of the two to
18:50
Speaker 3: get going. So it's just again there's an element of
18:53
Speaker 3: psychology to it. By a ten percent for near enough
18:57
Speaker 3: ten percent a year for the purely passive fund, really
19:00
Speaker 3: good and you'd be very happy with that. It's on John,
19:03
Speaker 3: but past performance, so, I.
19:08
Speaker 2: Mean, I think we are going to speak for John here,
19:10
Speaker 2: but I think we both slightly failed. That the overrepresentation
19:14
Speaker 2: of the U S enhansive attack inside those global indicies
19:17
Speaker 2: now is a worry. But yeah, you're you're right, and
19:20
Speaker 2: that that would probably have been better over the last
19:22
Speaker 2: couple of decades. But then, of course, who knows what
19:25
Speaker 2: funds and ETFs you.
19:26
Speaker 1: Might have picked.
19:27
Speaker 2: Maybe you'd have picked maybe you would have instead of
19:31
Speaker 2: the locals Fang God World, you would have chosen only
19:33
Speaker 2: US equity passive funds in which cause you've done even better. Right,
19:38
Speaker 2: then we go, there's another non answer for you, for you,
19:40
Speaker 2: another non answer for you.
19:42
Speaker 1: I think we all you make your choices with these ones.
19:45
Speaker 3: I mean, I think that's an interesting question. A bastly
19:48
Speaker 3: I would default to investing at all, and that kind
19:51
Speaker 3: of passive way is better than not investing, I think
19:57
Speaker 3: law and it's my view, if you have the capacity,
20:02
Speaker 3: and you have the interest, then putting in at least
20:05
Speaker 3: some sort of overlay of your own on top of
20:09
Speaker 3: that is actually a good thing to do.
20:12
Speaker 1: That's a active barbell strategy.
20:14
Speaker 3: Yeah, basically just something too. And also you know, if
20:17
Speaker 3: you're obviously if you're engaging me invest in, then you'll
20:20
Speaker 3: probably find it quite an interesting thing to do.
20:22
Speaker 1: Anyway.
20:23
Speaker 3: But I guess I wouldn't want to put anyone off
20:26
Speaker 3: if all they want to do is look like, how
20:28
Speaker 3: can I get this done? And if they if you
20:31
Speaker 3: just want to get it done, then there are much
20:34
Speaker 3: worse things to do than just stick it in a
20:36
Speaker 3: passive tracker.
20:36
Speaker 2: Okay, excellent, Right, I think that's enough questions and answers
20:39
Speaker 2: for today. I thank you all very much for sending them,
20:42
Speaker 2: and we really appreciate it because you make us think
20:44
Speaker 2: as well, and that's extremely good for us, isn't it.
20:46
Speaker 1: Jim, It's very good.
20:49
Speaker 3: We hate it, but it's very good.
20:55
Speaker 1: Thanks for listening to this week's Marrying Dogs. Your money.
20:57
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