Pension linked to an index with low charges

Oh God!

The optimal portfolio is the one that gives the highest return for a given level of risk.

Once the level of risk is discussed and set by the client, the uniqiue optimal portfolio can be determined.

Obviously, this all depends on the model being correct, and nobody can predict the future, but it certainly helps to make as informed a decision as possible.
 
Good morning South,

You seem to be having extraordinary difficulty with my point, so I'll try a different approach.

A man walks into a broker's office with a sum of money to invest for 25 years. The broker uses South's Risk-o-Meter (Pat. Pending) to analyse all the data that the man gives him. The broker shows the man a range of options that would suit his stated requirements. The man picks one, signs up and writes the cheque.

What has the man just bought?

(a) The optimal portfolio.

(b) The most suitable portfolio from the range of options on offer, which might or might not turn out to be the optimal portfolio in 25 years time, depending on a whole host of unpredictable variables.

The answer, of course, is (b) because he cannot buy (a) now.
 
The optimal portfolio based on a set of assumptions underlying the Capital Asset Pricing Model.

As I told you about 50 posts ago, nobody, not even an actuary, can predict future stock market returns with certainty...if I could I certainly would not be engaged in a discussion on a forum with people who argue with me while trying to say exactly what I am saying!!!

Anyway cheers we can agree on that so - there is an optimal portfolio...but nobody can predict the future, shock horror!
 
Did you think I could predict the future, oh God!!!

I am sorry to disappoint you, I tend to use models to forecast returns.
 
Did you think I could predict the future, oh God!!!
Click to expand...

Nonsense, I'm just glad to see you've finally qualified your original incorrect statement that it's possible for an advisor to recommend the optimal portfolio.
 
I hope this thred is of some benefit Carolina, sorry about all the diversions!
 
Yes.

It's beginning to look like a competition as to who is going to have the last post on the thread. :)
 
Well I have learnt something from this thread. I didn't know the difference between an authorised advisor and a multi-agency intermediary. I found a brochure here : [broken link removed]

I learnt that the FMC may be more important than the contribution charge, whereas it was the contribution charge that really stood out to me at first.

I have a list of discount brokers in the 'best buys' section.

As regards Quinn Life, I would be worried about investing a large amount of cash with them over 20 years because the company

a) has been in the insurance business for only 11 years
b) has limited financial disclosure compared to a listed company
c) is owned and run substantially by one man

Am I wrong to be worried?
 
Hi Carolina,

Interesting observations about Quinn Life. Although professionally I cannot recommend Quinn Life as I don't have an agency agreement with them, personally I must admit I wouldn't have any reservations about investing money with them for the following reasons: -

(a) they are subject to the same minimum solvency regulations as any other Irish life assurance company

(b) although Sean Quinn is the boss, I don't believe that the company is too heavily reliant on his presence to operate any more as their disclosed profitability for the past few years appears to have achieved a certain critical mass

and

(c) despite being a relative newcomer to the market, all they offer is index-tracking funds which don't require any fund management or stock selection skills or experience. You simply replicate the movements of the chosen index as best you can. Not saying that the QL fund choice will suit everyone.

I've no answer for your other concern - it's undeniable that as a private company, you can't simply access their accounts to run your own rule over them.

On the other hand, a pension fund is a substantial commitment - for most people it's second only to their home in terms of value by the time they retire. For many, it's even greater in value than their home by the time they retire. So with that much of a commitment, you should feel very comfortable with your chosen pension provider.
 
Carolina said:
I learnt that the FMC may be more important than the contribution charge, whereas it was the contribution charge that really stood out to me at first.
Click to expand...

I would definitely agree here...well they are both important to consider but the FMC should not be ignored, you will pay it every year on your money so whereas the 5% contribution charge hits your money once a 1% FMC will hit that same money every for as long as the investment is running, you need to watch the FMC as much as the contribution charge.

Carolina said:
As regards Quinn Life, I would be worried about investing a large amount of cash with them over 20 years because the company

a) has been in the insurance business for only 11 years
b) has limited financial disclosure compared to a listed company
c) is owned and run substantially by one man

Am I wrong to be worried?
Click to expand...

In relation to QL, the length of time in business would not bother me too much...every company has to start at some point.

The limited financial disclosure should not be an issue - your pension fund is invested on your behalf, it could not be dipped into to pay QL creditors in the event of financial problems...so I do not think you need to worry about this too much.

In relation to the one man part, again I would not worry on the basis that SQ does not seem to have much to do with QL's investment business, their lack of any prominent recognised industry experts slightly puzzles me.
 
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