Everyone Makes Mistakes

We all make mistakes. One only has to look at Neil Woodford’s Equity Income fund, his flagship, which has crashed in value by over 35% in the last two years. A fund which returned a stellar 17.01% in the year to 13th June 2017 has seen losses in the last two years of 11.03% and a whopping 21.33% to yesterday. Fuelled by a recent mass exodus (including KCC’s £250m) the fund has shrunk in size from a high of £10.2bn in May 2017 to just £3.8bn today. People now can’t get their money out.

The trick is to learn from mistakes and to try and ensure they are not repeated – never put all your eggs in one basket. So, when managing money, always diversify using “non correlating” assets as far as possible. Shares in ice cream companies might tend to increase in value in the summer and decrease in the winter, while for those in umbrella manufacturers the contrary might be true. Invest in both and you are more likely to see steady returns…

Tune in to Money Talk with Simon Webster at 13.00 today to find out how to build a robust portfolio designed to deliver consistent returns. The show will available live on www.channelradio.co.uk/two, or available for download as a podcast at www.moneytalk.guru from 3pm.

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