Create account with investment firm

>Create account with investment firm
>Put money into a stocks-and-shares ISA controlled by a fund manager
>Enjoy returns of ~9% p/a without having to spend hundreds of hours learning about finance, only to inevitably lose everything on a risky stock pick

Why doesn't everyone follow this investment strategy Veeky Forums? What are the downsides?

Other urls found in this thread:

businessinsider.com/mutual-fund-performance-persistence-2014-7
bogleheads.org/wiki/Getting_started
en.wikipedia.org/wiki/Accredited_investor#United_States
twitter.com/NSFWRedditVideo

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>Create account with investment firm
>Put money into a stocks-and-shares ISA controlled by a completely useless junior fund manager
>Enjoy returns of ~3% p/a without having to spend hundreds of hours learning about finance
>Enjoy paying ~2% management fee for the action of taking your money and putting it into the most generic stock portfolio ever
>Enjoy below inflation returns

9% was the average return on the Hargreaves Lansdown stocks and shares ISA I was considering.

Says who? The guy trying to sell you the product? Who's wages depend on selling more and more of said product?

Yeah right.

>claims 9% nominal return
>admin fee of .45% p/a
>"ongoing charge" of 1.46% for anything that isn't overly conservative for a young person
>1.95% fee on nominal 9% growth is 8.05%
>best case is real annual growth average of 5.05% for holding most aggressive position

oh shit back to kindergarten for me
6.09%
or ~3.09% real

what am I doing
4.09% real
im going to sleep

>muh past performance
businessinsider.com/mutual-fund-performance-persistence-2014-7

You wont see most of those returns. I have my investments handled by Wells Fargo Investors and the average return is way below average. My account always increases but I could have done better throwing it all into random things like coke and dr pepper and amd and nvidia. They probably have a team of purebreds who handle their own investments and your investments are handled by the new guy fresh out of college with a B average who hopes to be promoted to the inner circle.

If you keep this open I will post my actual growth for the past 10 years with $100k.

You are ready to hear the gospel of His Holiness, Jack Bogle:

bogleheads.org/wiki/Getting_started

why wouldn't I just buy a position in a hedge fund with a better annual growth rate than that? its the same amount of work but it completely removes the middleman.

You need six figures just for shitkicker hedge funds to even consider picking up the phone.

Regulations actually say you need to have an annual income of $200k or $1mil in assets.

Only 200K? Is that household or individual?

en.wikipedia.org/wiki/Accredited_investor#United_States

$200k for individual, $300k for a couple. See points 6 and 7.

And regulations don't run the goddamn fund do they kiddo? I promise no respectable fund manager is going to let you buy in for less than $1m.

That only works because your fund manager is using a mixture of indexing (which acts as a floor for the returns meaning your returns will be no less than whatever the bull-market infused S&P currently sits at) and stock picking (which he's better at than you I promise). Once the market sees a -5% correction you'll be getting an email about the fund liquidating positions and shutting down, I can almost guarantee that. I personally saw this happen to many funds in the past 20 years of trading.

Great idea.

bumperino

Please do.

why would I do that

>read two books
>spend two hours a week looking at stocks
>have a diversified account with stop losses so when one stock shits the bed which will happen eventually doesn't tank my account
>have fun hunting for my future and money
>~3% a month
>put 20% of income in brokerage and have trading cycles fast enough I can use it

why doesn't everyone do this

Which two books did you read?

Its missing my pre2009 information but I had $100k and went down to $45k during the recession and it recovered in 2013. Before that point it went from $80k in 2005 to $100k in 2008ish.

Im going to follow this up when I get home with the actual dollar amounts but I completely forgot about this last night.