Picking Funds | The 3 Big Mistakes Everyone Makes (Pension/ISA/401K)

I am not recommending any of the funds featured in this video. They have been chosen purely for illustrative purposes and may not be appropriate for your personal situation.

This video is relevant for both UK and international investors (Pension, ISAs, 401K etc).

Financial Planning

DISCLAIMER:
This channel is for education purposes only and does not constitute financial advice. Any opinions or assessments expressed are James’ own opinions or assessments, which are not affiliated with any third party. Any representations stated as facts or views based on such facts are relevant to circumstances applicable at the time of publication. This information should never be relied solely upon to make decisions, and James accepts no liability for any investment actions undertaken by viewers. Please seek regulated financial advice or an advisor if you require assistance. The value of an investment and the income from it can go down as well as up and investors may not get back the amount invested.

0:00 Intro
1:53 The Funds
3:24 Fees
4:26 Performance
6:05 Thematic/Style
8:16 Active vs Passive
14:14 Geography
16:17 One Fund

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[JamesShack]

Please ask me any questions in a comment below!

[Sofiarita-mw]

Biggest lesson i learnt in 2023 in the stock market is that nobody knows what is going to happen next, so practice some humility and low a strategy with a long term edge.

[ScipioAfricanus]

100% global all cap in my SIPP and ISA, no crypto, no meme stocks. Boring perhaps but in 30 years time I'll be glad I chose this strategy. Thank you James, you produce tremendous educational content and are a shining light amongst a sea of finance youtuvbe charlatans.

[iMetal]

“I know I don’t know.” Possibly the wisest words on so many things

[miniaturefriends]

I'm all in on Fidelity Index World in both my ISA and SIPP.

[shellywhite]

I am new to the stock market. Every stock that I bought so far, I was out of luck because I bought them when they were expensive. I feel I missed out on all the stock opportunities so far for the tech stocks.I believe having 75K yearly income would be a good investment so I want to plug all my savings into the stock market. I know this sounds a bit dull but I would like to know if I should learn investing or let somebody else (more capable like a FA) do it for me? Please share your thoughts. I am kind of tired of searching for a good stock to buy and losing all the good opportunities

[eddied]

One of the best videos I've seen on this subject, James. It should be mandatory viewing for all investors!

[robbie]

I’m so glad YouTube recommended me your channel - I’ve had many questions about all of this, and you’ve answered them all brilliantly. Thank you so much.

[WyndStryke]

I picked 11 different funds to fit within my company pension, each gets an equal part of the incoming money each month (i.e., 9%). 5 are what I would term 'benchmark' index funds (different risk levels, and an onshore equity tracker fund + offshore equity tracker fund), the remaining are as diversified as I can make them (regional equity index funds + specialist funds), all 6 of those are at the higher end of the risk scale, and all with low fees. So far I am consistently beating the 'adventurous' benchmark fund, although by a very small amount (5% or so, after 5 years). If I only had one fund it would be the 'adventurous'.

[jeffdale]

Great video thanks James, you’ve put into words many of the thoughts that run through my head when choosing investment options. How good to have this summarised in a short video and so much more eloquently than I could ever present 👍

[kevinsyd]

Neil Woodford and Anthony Bolton (Fidelity) put me off managed funds. I have used low cost tracker funds for years

[ukuserful]

Fundsmith's benchmark is the MSCI All World, not the S&P. Since inception, there have been quite a few times where it did beat the index; recently, it's struggled a bit more. The thing is, whatever point one wants to convey about X being better than Y, you will often find a time horizon during that held true, and another one when it didn't!

[Tensquaremetreworkshop]

The biggest mistake is to not track living costs. How can you retire early (or at any time) without knowing how much it costs to live? The amount you need falls over time (less years to go) while the amount you have rises. When the lines cross, you are able to retire.

[coderider]

I wouldn’t write off active funds. Yes, expensive and struggle in the boom years but in the bust period, I’m sure they will come back. My active fund for pension is a glorified large cap screened and more evenly balanced. It beat the main indexes in past 12 months. I pay 0.37 fee. Fear is mega caps stagnate, do enough to stay listed but drag indexes.

[adrianellis]

Excellent Advice, have to say every Fund I’ve invested in had tanked I’ve got 2 at the moment 18% & 12% down. The only Fund I’ve made money with was Woodford equity income and that was because I removed my money very early to purchase a house . The other outcome would have been my usual

[glostergloster]

Your video is very interesting but it also sums up why so many people neglect their pensions and dont bother with delving into fund selection. Its all too complicated, there are too many options and there also isnt really a right answer in terms of the 'best fund'. That is why so many ppl just park their money in the default

[matthieud.]

A 4th mistake people make is not evaluating their attitude to risk correctly. When I first got interested in investing, I thought "I'm generally a very cautious person, so I'm going to put those 20K£ in a lifestrategy fund with 20% stocks and 80% bonds". Until I watched more videos and understood that risk-aversion was less about my personality than it was about the consequences of loosing my investment. With a very stable job paying 80K£/year, no dept, and more money on the side, there was no reason for me not to be on a much "riskier"" fund (and by this I mean 80 to 100% in Vanguard All Caps, of course I didn't go towards crypto).

[tristenbell]

Rather than chasing returns, it can be a more rewarding journey getting reasonable returns consistently over the long-term.

[markfogel]

Thanks for another great video James. My pension was fully invested in expensive activity managed funds that were chosen by my company's pension advisor. By switching to passive index funds my overall fees decreased from 1.2% to 0.5% (including platform fees). Past performance figures are also better so it's a win. It's a shame that FTSE all cap isn't available on Standard Life and so need to buy developed world ex UK+ UK + emerging markets to make up the global investment.

[lukehilton]

Another fantastic video James, keep them coming please!❤