Over 50s “the best investors”, study shows
It seems that experience of various market conditions is the all-important factor when it comes to investing.
By Joshua Ausden, News Editor, FE Trustnet
Thursday October 11, 2012
People over the age of 50 are by far the most successful and profitable traders and investors, according to research from fintrader.
The seven-year study of financial trading suggests that the over-50s are a full 40 per cent more profitable than their 20-something counterparts.
Financial trading coach and author Vince Stanzione studied investments made by 1,000 UK individuals between October 2005 and October 2012, covering bull and bear markets and the volatile period from 2008 to 2009.
The 1,000 traders were divided into three age groups: 18 to 30, 30 to 50, and 50-plus, with equal numbers in each.
Stanzione found that the over-50s performed 25 per cent better than the 30-to-50 group and 40 per cent better than the 18 to 30s.
Commenting on the results, Stanzione said: "I’ve long believed that, in the markets, results come from wisdom, not the hot-headedness of youth."
"But even so, I was surprised to see just how well the ‘silver surfer’ traders fared."
"The over-50s also showed a bigger appetite for risk than the 30-to-50 group, with a strong appetite for commodities and commodities companies: gold, crude oil and silver featured highly in their portfolios," he added.
Richard Troue (pictured)
, fund analyst at Hargreaves Lansdown, thinks age is an important factor when it comes to trusting a manager with money, but says he would have no problem backing a young manager as long as he/she had a five-year track record.
"We always make a point of looking at manager record rather than fund record," Troue commented. "Having a tried and tested record in different market conditions is really important."
"That said, the likes of [Neil] Woodford
and [Giles] Hargreave
aren’t going to be around forever. It’s crucial to keep an eye on the next generation of managers."
Among the top-rated newcomers in the fund management industry are Neptune’s Mark Martin
, Investec’s Philip Rodgrigs
, Fidelity’s Alex Wright
and MAM’s James Sullivan
. All four are FE Alpha Managers.
"We don’t currently hold [Rodrigs’] Investec UK Smaller Companies in the Wealth 150, but he’s on the cusp," Troue added.
"Alex Wright still doesn’t have a long enough track record in my opinion, having only taken over the institutional fund in 2008."
"We’re also a fan of Alex Savvides, who has carved a good track record for himself since taking over the [JOHCM] UK Dynamic fund."
Performance of fund vs index since Oct 1988
Source: FE Analytics
Woodford took over the Invesco Perpetual Income and High Income portfolios in October 1988 – at the age of 28 years old. Since then, the fund has delivered 1,669.46 per cent to investors, more than twice as much as the FTSE All Share.