joey wrote:Thanks to all for the replies. It is especially interesting to hear from those who are retired who still have a substantial part (100%) in equities.
That's me too, 7 years retired and no regrets.
Scott.
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joey wrote:Thanks to all for the replies. It is especially interesting to hear from those who are retired who still have a substantial part (100%) in equities.
JohnW wrote:The PNL objectives are: 'to protect and increase (in that order) the value per share for the funds of shareholders over the long term.' I think one can similarly seek that aim with a mix of low cost diversified equities and government bonds. Even accepting that PNL may have been a good performer recently, what is it that makes this active fund a better choice than a mix of index trackers when the evidence strongly points to active funds underperforming beyond about 3 years in general, and that persistence is not a consistent feature of outperformance? I'd like to be convinced if it's going to be a better investment choice for me.
scrumpyjack wrote:But for the lower risk wealth preserver part of the portfolio (if I wanted that, which I have not so far), the chances of a PNL holding its real value, without sudden price collapse, are IMO, better than that of government bonds which I think are virtually certain to lose purchasing power over the long term and could fall sharply in price, if other than short dated, in the event of a rise in interest rates.
Holding VWRL plus bonds as the wealth preserver element doesn’t make sense to me.
swill453 wrote:joey wrote:Thanks to all for the replies. It is especially interesting to hear from those who are retired who still have a substantial part (100%) in equities.
That's me too, 7 years retired and no regrets.
Scott.
77ss wrote:swill453 wrote:joey wrote:Thanks to all for the replies. It is especially interesting to hear from those who are retired who still have a substantial part (100%) in equities.
That's me too, 7 years retired and no regrets.
Me too. 20 years retired. Apart from a modest cash reserve, 100% in equities all the way. I don't do trackers - apart from one brief - and, I have to say, reasonably successful, foray into an FT250 one. I do, however, have getting on for 50% in investment trusts which should mitigate the risks of individual equities.
joey wrote:Thanks to all for the replies. It is especially interesting to hear from those who are retired who still have a substantial part (100%) in equities. With me being a fully paid-up card carrying capitalist, that definitely chimes.
In summary it seems that having a heavy concentration in equities is sound. I should perhaps have mentioned that I have other investments besides the SIPP. In fact the majority of my portfolio is inside ISAs and trading accounts. It is a mix of funds (both passive and active) but I have recently been moving some into ITs. I also have stock in a handful of operating companies although those are speculative in nature.
My idea with the SIPP being passive is that it acts as a counterweight to my own arrogance when it comes to my active selections.
Lootman wrote:Add my vote to the "nothing in bonds" camp. I recall when gilts were giving yields-to-maturity of 12% and that was certainly a risk-free return worth having, even if inflation was much higher back then. But at current rates you are almost guaranteed negative returns from bonds going forward.
I recall when gilts were giving yields-to-maturity of 12% and that was certainly a risk-free return worth having, even if inflation was much higher back then.
1nvest wrote:Lootman wrote:Add my vote to the "nothing in bonds" camp. I recall when gilts were giving yields-to-maturity of 12% and that was certainly a risk-free return worth having, even if inflation was much higher back then. But at current rates you are almost guaranteed negative returns from bonds going forward.
So has been the mantra pretty much for a decade now since the transition over to low yields post 2008/9 financial crisis, yet here we are where long dated gilts have doubled up in value since then.
1nvest wrote:The S&P500 has been more the exception than the rule, with recent years large gains driven predominately by the big techies. Lost opportunities are evident all of the time.
1nvest wrote:I believe Terry (TJH) rode through that 1970's era relatively well - I suspect due to still being in savings/accumulation mode, many others didn't (that were typically in drawdown and as such enduring a double hit of having to draw more in reflection of high/rising inflation at a time when portfolio values were taking serious hits) and saw lifetime accumulated substantial portfolio values being devastated.
. Change from Previous Year
. Cost @ Value @ Income Yield %
. 31 Dec 31 Dec
Year Yield %
Dec-71 Dec-71 5.98%
Dec-72 -7.25% 8.60% -17.07% Dec-72 4.57%
Dec-73 7.25% -20.60% 1.17% Dec-73 5.82%
Dec-74 -1.06% -36.61% 24.81% Dec-74 11.46%
Dec-75 23.15% 118.96% 3.00% Dec-75 5.39%
Dec-76 5.72% 3.00% 22.35% Dec-76 6.40%
Dec-77 -32.06% -10.48% 16.57% Dec-77 8.34%
Dec-78 8.56% 15.72% -24.94% Dec-78 5.41%
Dec-79 11.82% 10.45% 27.23% Dec-79 6.23%
Dec-80 23.92% 34.35% 27.17% Dec-80 5.90%
scrumpyjack wrote:If you comprise your 20% segment of 85% bonds and 15% equities, that segment could easily lose value because of inflation (bonds) and a bear market (equities) so not ‘preserving wealth’. That is why, to me, it does not make sense as a wealth preserver. But ‘chacun a son gout’ as they say!
MrFoolish wrote:When you guys are talking about bonds in this context, are you talking about government bonds or corporate bonds?
(I hold a fixed interest UT and the ishares SLXX, both of which are corporate, and seem to give reasonable returns.)
Lootman wrote:The big problem with bonds, longer term, is that they cannot grow. They can only bounce around a mean. Whereas equities can and do grow.
JohnW wrote:High quality corporate bonds can be a good choice (as can low ones), but they won't return as much as low quality ones although more than government bonds. But to imagine that you're getting a better product with a corporate bond than a government bond, if you can also hold equities in any proportion you like, is something that I can't understand.
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