The Lemon Fool

Noting today's large falls in Provident Financial, I spotted this article, highlighting which IT's have significant holdings of PFG:

Fund managers Neil Woodford, Mark Barnett and Alexander Darwall have taken a hit from a plunge in the shares of Provident Financial (PFG), as the doorstep lender issued a profit warning.

The shares fell 16.2% to £24.01, tumbling to the bottom of the FTSE 100, as the lender said an overhaul of its home credit division was likely to weigh on profits for the rest of the year.

The company said the impact of the reorganisation on collections, sales penetration and customer retention was heavier than expected.

http://citywire.co.uk/money/provident-p ... e=readmore

richfool wrote:
[from the CityWire article] - Provident are the fifth biggest stock in his Edinburgh (EDIN) Investment Trust.

So with Provident around 18% down at the moment (http://tinyurl.com/y7wg692n), and with Edinburgh currently around 0.84% down (in a market that is itself down 0.4%) (http://tinyurl.com/yaqn94j4), it shows how useful such diversified Investment Trusts are, to be affected to little by a single company-specific drop such as this.

Whilst the Provident Financial concentration-numbers for some of the funds and IT's mentioned in the CityWire article might seem high on initial viewing, even a relatively large fall such as this, in a single component of these types of collectives, turns into little more than 'noise' in the grand scheme of things.

I've built up quite a large proportion of my income-related investments in these types of Investment Trusts now, and this is one of the reasons I did so.

Cheers,

Itsallaguess

Itsallaguess wrote:I've built up quite a large proportion of my income-related investments in these types of Investment Trusts now, and this is one of the reasons I did so.

Indeed, I too have concentrated most of my investments in IT's (income, growth and wealth preservation portfolios). I feel they give me greater diversification and less risk. (My direct holdings are confined to a few higher yielding stocks, which I feel most comfortable with, and which I have positive views about.)

Diversification is one of the few free lunches available in the stock market.

Highly concentrated portfolios might do very well for a short period, but then suddenly experience catastrophic losses.

Aaargh!

Please report to the Apostrophiser forthwith!
viewtopic.php?f=70&p=60615

Common problem. CDs are often CD's. TVs become TV's. ISAs become ISA's.

My rugby team, Northampton Saints, has direction to the VIP's car park. Lucky VIP, i thought, owning a whole car park just for himself.

On holiday I spotted a mattress and bedding shop called "Bed's".

Go figure.

Well I use "IT's" when I am referring to the plural of investment trust, .... because I take the view that I am using the FIRST letter of each of the words Investment and Trust and then I am omitting the rest of the letters between the first letter of "Trust" i.e. the "T", and the last letter "s" of that same word, - as it is in the plural. Therefore it is correct to use an apostrophe to indicate the omission of some letters in between. The same would apply to things like: ISA's, TV's etc.

The apostrophe is not being used to indicate a possessive, merely the omission of some letters in between.

So the singular is I'T' then ?!
(I must say the usages CD's, DVD's 1960's etc don't look as wrong as my local "Bargain Bed's" shop

I'll have to check a style guide..

LooseCannon101 wrote:Diversification is one of the few free lunches available in the stock market.

Highly concentrated portfolios might do very well for a short period, but then suddenly experience catastrophic losses.

I do not hold Provident Financial but even if I did I would hardly call its fall catastrophic. Let's keep a sense of proportion!

I agree the general premise though, provided you introduce the word 'can' as in 'but then can suddenly experience catastrophic losses.'

You are unlikely to get a catastrophic loss with an IT.

Dod