#458347
Postby AshleyW » November 15th, 2021, 11:58 pm
I am retired and around 25% of my investments is an 8 Investment Trust Income Portfolio. I worry like other contributors that I will suffer mental incapacity maybe this will be so severe that it is obvious I am not capable to run my own finances but what is perhaps riskier is a gradual deterioration of capacity which results in poor decision making that is unrecognized by me and my family. I cannot see how it is possible to put any portfolio of active ITs or funds on auto-pilot or provide to a relative an investment manual that they must follow.
A lot can happen over 20 to 30 years - changes in ownership, manager, strategy, market environment, etc.. We have seen in recent years well-respected managers change investment style to the detriment of investors (Barnett, Woodford ..) and others. I cannot see a perfect solution if I´m unwilling to hand my finances over to a professional manager with the costs and risks that this could entail. Robo advisors are a possibility but their underlying algorithms are human-derived and unproven. Perhaps if Vanguard opens up their personal financial management services to the post-retirement sector (as in the USA) this could be a low-cost, trustworthy solution.
This issue of mental capacity is a real dilemma At the moment my intention is in 10 years time or so is to ditch all actively managed investments and go for passive index investments - the most obvious candidate being Vanguard LifeStrategy - and even this is subject to management error as although the underlying funds are indexed someone has to decide on the funds held and percentages. One also hopes that Vanguard will adapt these over time to reflect changes in the investment environment and be willing to incorporate alternative investments if the evidence supports this.
There simply isn´t a risk-free, low-cost solution.