EK provident fund choice

[jack schidt]

Beware boys and girls equities from Jan 22 -24, prob going down a bit, don't say you weren't warned in time. Along with the fiscal cliff crap end of Fed I would seriously consider going safe ASAP.

We all got hit hard on the last crash so if anyone has top info please post. DW does a great job with the BLITZ, but if still in any equities be very very cautious at this time.

Edit to highlight the statement of the Fed dropping the market end of feb.

[helen-damnation]

Why 22-24 Jan?

[tbaylx]

Or...you could stay the course with a market banging up against a 52 week high and wait for the debt ceiling debate to sort itself out before watching your retirement funds gain value as the market goes higher. The whole OMG! its a fiscal cliff better go straight to cash call at the end of December hasn't worked out for too many people now has it.

No offense but if you can predict a market top accurate to within a few days..i have a few friends who run hedge funds that would pay you hundreds of times more than you are making now to come work for them..feel free to PM me details :)

[8sugarsugar]

Last time EK pilots took advice from another pilot, they lost big time in some foreign currency trading scheme.

Pilots are poor at 3 things at life

1. Choice in first wife
2. Deciding if they are "fit" to fly
3. All financial decisions.

[FFFrentit]

Last time EK pilots took advice from another pilot, they lost big time in some
foreign currency trading scheme.

Is that the guy in DSO ?

He still owes a lot of money to quite a few of his colleagues. I believe he is undergoing TRI training now - should be interesting to see what happens when he has to train or check one of his victims.

[nolimitholdem]

Hang on a second, I thought we were all supposed to sell for the more recent scare-du-jour, the OMG FISCAL CLIFF which of course, was also just more political theatre.

No doubt the markets will take a hit when the debt ceiling date gets closer but market timing is more likely to lose you a bundle than liquidating and getting back in.

[jack schidt]

Keep that hard earn't night flights cash safe and the future of your prov fund.

01/20/2013 – Market Update « Market Weekly Update (http://marketweeklyupdate.com/2013/01/20/01202013-market-update/)

[jack schidt]

Sorry to go on but please have a look at this graph for your consideration. I lost alot in the 07/08 crash and I just want to try to help others be very carteful about this possible upcoming correction. Cash is safest and takes a few days to get into.

http://www.etf-corner.com/.a/6a010535da87f8970c017c366d8e17970b-pi

Notice on the SP500 that the FIRST FLOOR phase has been reached and the plunge phase is due soon (in exact relation to the timing of the above)

01/28/2013 – Market Update « Market Weekly Update (http://marketweeklyupdate.com/2013/01/28/01282013-market-update/)

[tbaylx]

Cash is not the safest..all cash does is guarantee you that you'll lose a small amount.

By all means go ahead and cash all your investments out as the markets climb the wall of worry. In cash you'll get at best 2%..more likely around 1.5% which is well below inflation in most countries, therefore you lock in the difference between the two as a loss. Sure you won't take a large loss, but you aren't going to make anything either, just get steadily and slowly poorer.

If you want to retire one day then keep your investment management fees as low as possible and diversify across several markets, preferably in low cost ETF's that get rebalanced once a year or so. The rest of the time go drink Corona's on the beach and don't worry bout it. Oh and don't give anyone in Dubai your money to manage, especially if it involves real estate.

[single chime]

...and stick to your first wife!

[40&80]

Unless the second one is worth mega bucks.:ok:

[Kennytheking]

Sorry tbaylx, I'm with Jack on this one.

You have to see it in the context of the Emirates Provident Fund. It costs us nothing to shift from equities to cash/bonds and VV. I think we get a certain number of free shifts per year.

It also doesn't go about predicting the top of the market. I lost over 40% of my provident fund in the 2008 crash, simply because I wasn't paying attention to the signs.....I was too busy drinking Coronas on the beach.

I am no market analyst but I have come across several informed opinions that believe that the market is entering a high risk phase. It may well continue in an up trend, but there is more downside risk than upside. Accordingly, I have shifted my portfolio to a lower risk equity group and bonds/cash mix. This is simply prudent. I may miss out on some nice market action but that is a risk that I am prepared to take in the interest of protecting my funds over the longer term.

You may be correct about about diversifying across markets and low cost ETF's but these are not options in our Provident Fund. You simply choose from a list of about 20 equity funds, cash funds or bond funds. It simply makes sense to be more conservative when there is risk.

[Sonny Hammond]

I lost 30% in the GFC just like nearly everyone except those that caused it. But guess what ? I made it all back in time through reasonable diversification.

Trying to be clever and beat the market will only end up in tears- unless you get lucky.
Diversification and ultimately going to cash as you approach quitting time is really the only educated strategy.

[Dropp the Pilot]

I don't think that is quite true. It's true the funds can be quite opaque in their machinations but if you went 50/50 in the Fidelity International and Fidelity International Bond funds you would be about as diversified as any garden-variety pension fund.

[NegativeNigel]

It doesn't matter what you do with it, you'll only ever get the equivalent of the EOSB....

They have bean counters specially employed to work it thusly.

:sad:

[BigGeordie]

Nigel, you are being a bit too negative there. You will never get less than EOSB but it is certainly not too difficult to get more.

[Epiphone]

you should be gearing your risk level to your current age. Younger guys should be taking on more risk. As you get older you slowly move to less risk based investments, ones that give you a small return but have very little chance of going down. trying to ride the ups and downs of the market at any age is frustrating at the least.

E.

[tbaylx]

Kenny & Jack,

You might have lost 40% in 2008, but if you continued to hold your investments and continued to buy them monthly through the EK provident fund, now 4 years later you are up money from 2007, more than you would have been had the market not crashed because you bought stuff cheaper in 2008 when the market was down.

If you cant handle that sort of volatility due to time frame or personal preference, put more in bonds/treasuries and less in equities. Going to cash is not the answer.

Its your money though and often emotion gets in the way of making the smart choices.

[jack schidt]

Some Trader Has Made A Very Big Bet That Something Very Bad Will Happen Within The Next 60 Days

Read more: Art Cashin On Big VIX Bet - Business Insider (http://www.businessinsider.com/art-cashin-on-big-vix-bet-2013-2#ixzz2KKSm4pME)

[jack schidt]

About the market to drop in the timeframe as stated from the 8th Feb post has happened and is still happening in the SP500 equities. More decline to come sadly, I did try to be helpful, I hope it saved someone some cash.

Jack

[donpizmeov]

Jack,

Can you let us know when you get back into the market? I would be interested to see how this works out.

Thanks

The Don

[helen-damnation]

BBC News - Dow Jones and FTSE climb to new highs (http://www.bbc.co.uk/news/business-21621048)

Hopefully already back in if this is happening!

[Dropp the Pilot]

Market timing - the investment strategy designed, operated and proven to take money from people with $50,000 in the market and hand it (with a sly grin) to those with $50,000,000 in the market.

[Wizofoz]

Erm...

Who is stating 54% ROI?

What is contributed by us and the Company (5 and 15% of base respectivley) is 100% transparent.

What you make on top of THAT is your ROI, and I'm at around 12%.

It's actually pretty simple maths Sit, who are YOU talking to?

[captainsmiffy]

....made my say, Wiz! Am getting 13%!!! must have done SOMETHING right!

[Wizofoz]

More fool you, Smiffy.

If you'd put everything into Gold when Sitty told you too, you'd be rich! (Provided you were rich+5% to start with!!)

[tbaylx]

@sitting

And putting all your retirement in precious metals is a better play? At least if you're in a mutual fund you're diversified.

But hey its your cash you do what you want with it. No living in my garage though if it all comes unraveled.

[captainsmiffy]

Sorry, Wiz....what was I thinking, turning down financial advice from a pilot?!!

[Payscale]

I have an ROI of 42% over 11 years. So around 4% pa. Not really something fantastic. Made 5000 USD last week though. The people at Fidelity are merely financial salesmen. Not necessarily financially trained. So their advice comes with a disclaimer. I wish my job was like that.

[Payscale]

Just did the math.
I have paid in 217K USD and the value is now 250K USD.
The statement says my ROI is 42%. Actually it is only 15%.
How did they do their calculation?

[Wizofoz]

Really?

I guess I owe sitting an apology. I always just check the balance, I haven't noticed any inflated claims re ROI.

Must indeed be some " creative" accounting.

[Saltaire]

My personal belief is that the bid/spread exchange on fund changes and other hidden fees other than the advertised 1-2% are exorbitant.

I don't honestly don't know but when is the last time the EK provident scheme was audited?

I think it's a very easy target for huge hidden fees.

[MysticMike]

Don't know if this makes any more sense Payscale but in an oversimplistic way the way ROR was explained to me is:

The ROR is the growth for the selected time period divided by the average amount invested during the period.

So if you start with $0 and contribute $1,000 per month for 10 months and end up with $11,000 the ROR is calculated as follows:

The approximate average amount invested is $5,000 assuming no pay increase etcetera and the growth is $1,000 then the ROR is 20 % or thereabouts.

Before you ask, negative RORs are calculated the same way but look better as a percentage as a discount looks smaller than a mark up. :8

[donpizmeov]

It saddens me that Sitting confuses Annual ROR and Annualised ROR.

A fund grows at 100% in year x then drops by 50% in year y.

Annualised results show (100% + -50%)/2= 25%
If you ask a fund to determine your Total ROR this is what they do. It is highly inaccurate to the results you have with the fund. But it will show huge difference between a higher performing fund and a lesser performing fund.

Annual ROR results. ($100 X 100% = $200 X -50% =$100) so you started with $100 and finished with $100 so the annual ROR from year x to year y is zero.
If you look at the results of an individual fund over a period (Russel 90% fund from 2009 to 2013) they use this calculation. The differences between higher and lower performing funds will look smaller with this method (1 or 2 percentage points as opposed to 50 to 100 percentage points with method above, but a few percentage points makes a big difference when compounded over lots of years), however you can better determine how your investments are going. This result does not take into account fees etc.

Both types have their place. You just have to know how to use them.

The Don