Donate to Remove ads

Got a credit card? use our Credit Card & Finance Calculators

Thanks to SalvorHardin,Loup321,pje16,AsleepInYorkshire,swill453, for Donating to support the site

Another Retirement Portfolio

A helpful place to also put any annual reports etc, of your own portfolios
Gilgongo
2 Lemon pips
Posts: 151
Joined: November 5th, 2016, 6:51 pm
Has thanked: 40 times
Been thanked: 47 times

Another Retirement Portfolio

#424424

Postby Gilgongo » July 3rd, 2021, 12:52 pm

Further to my recent questions about simplifying the rather large list of investments my wife and I hold into something more manageable in my our old age. I thought I'd start by looking at the sorts of things we've been investing in so far, and make them less numerous. And more international.

Cash would be kept at about 2 year's spending. Weighted average costs (TERs + platform fees) is about 0.36%. The portfolio would be spread across 2 ISAs and 2 SIPPs held by my wife and I.

We'd rely on dividends for the income, and when making up any shortfall, sell down the best performing (based on more of a "feeling" than any exact measure) to at least try to reduce sequence risk. Gold being the last thing to chip into when stocks are down.



This gives a rough breakdown as:



I'm thinking of increasing the share in bonds as a (vaguely!) inverse-correlated asset to sell down if needed when stocks go bad (again to reduce sequence risk).

I've also not seen retirement portfolios with small cap things in them though, so I'd be curious to see what others think.

Gilgongo
2 Lemon pips
Posts: 151
Joined: November 5th, 2016, 6:51 pm
Has thanked: 40 times
Been thanked: 47 times

Re: Another Retirement Portfolio

#428688

Postby Gilgongo » July 19th, 2021, 9:00 am

Interesting that nobody has commented on this! I'll take that as a good thing. :D

As an addendum, I'll probably consolidate the portfolio into a single holding (VWRL or something) when I'm about 10-15 years into retirement. The reason I'd not do that now is so that I can (with luck) counteract a bit of sequence of returns risk at first by selectivley selling the "winning" asset classes as markets rise and fall. Once the SoR is less of an issue as I get old and less able to make decisions, I hope to have just one holding to manage.

TUK020
Lemon Quarter
Posts: 1388
Joined: November 5th, 2016, 7:41 am
Has thanked: 426 times
Been thanked: 795 times

Re: Another Retirement Portfolio

#428692

Postby TUK020 » July 19th, 2021, 9:13 am

Read the original post and thought ¨thatś sensible and balanced¨
Only thin is that you did not give any indication of what sort of investment horizon you are looking at.
The portfolio looks very good for a long term perspective of several decades.
Dont think you need to up the bonds.
I a shifting from adding to physical gold ETF to adding a gold miners' ETF, to get greater leverage from a small percentage devoted to Gold.

TUK020
Lemon Quarter
Posts: 1388
Joined: November 5th, 2016, 7:41 am
Has thanked: 426 times
Been thanked: 795 times

Re: Another Retirement Portfolio

#428693

Postby TUK020 » July 19th, 2021, 9:16 am

Possibly would want to split the main ITs to get some diversity.
I have CTY & MYI, but also LWDB & HFEL. Some smaller stakes in growth oriented ITs such as SMT, MNKS, RIT, CLDN etc

Newroad
Lemon Slice
Posts: 301
Joined: November 23rd, 2019, 4:59 pm
Been thanked: 93 times

Re: Another Retirement Portfolio

#429030

Postby Newroad » July 20th, 2021, 12:15 pm

Hi Tuk020.

I don't really get the argument about splitting the main IT's to obtain diversity. Just taking the first one, for example, Merchants already has 47 holdings. Too much diversity and perhaps just holding an inexpensive tracker is perhaps better bang for buck?

Do you truly mean diversity in the above sense, or are you worried about incompetence or malfeasance from an individual trust's management (or something else)?

Personally, I'd go the other way - fewer holdings - which I think is where Gilgongo is heading. Also, I hold bonds, about 17% government/investment grade (VAGP) and another 17% mostly high yield (either HDIV or BIPS). Whether that's a good idea we'll see in time - but it continues to seem sensible to me on a risk adjusted basis.

Regards, Newroad

TUK020
Lemon Quarter
Posts: 1388
Joined: November 5th, 2016, 7:41 am
Has thanked: 426 times
Been thanked: 795 times

Re: Another Retirement Portfolio

#429068

Postby TUK020 » July 20th, 2021, 2:46 pm

Newroad wrote:Hi Tuk020.

I don't really get the argument about splitting the main IT's to obtain diversity. Just taking the first one, for example, Merchants already has 47 holdings. Too much diversity and perhaps just holding an inexpensive tracker is perhaps better bang for buck?

Do you truly mean diversity in the above sense, or are you worried about incompetence or malfeasance from an individual trust's management (or something else)?

Personally, I'd go the other way - fewer holdings - which I think is where Gilgongo is heading. Also, I hold bonds, about 17% government/investment grade (VAGP) and another 17% mostly high yield (either HDIV or BIPS). Whether that's a good idea we'll see in time - but it continues to seem sensible to me on a risk adjusted basis.

Regards, Newroad

I would indeed worry about incompetence,malfeasance etc. 20% of the portfolio in one instrument represents unnecessary risk.
Tuk020

Newroad
Lemon Slice
Posts: 301
Joined: November 23rd, 2019, 4:59 pm
Been thanked: 93 times

Re: Another Retirement Portfolio

#429192

Postby Newroad » July 20th, 2021, 9:27 pm

Fair enough, Tuk020.

Personally, I think that the instrument(s) are relevant, e.g. certain Vanguard Lifestyle funds (and no doubt those from other providers) are arguably even more single vendor and/or instrument concentrated.

I judge that well established large, generalist Investment Trusts with independent boards (as they have) are safe in context, though I suppose Woodford is in the back of many people's minds. For what it's worth, I back this view with my own allocations - for a long time the kids CTF's then JISA's were 100% FCIT (they remain around 37.5%) and the wife and I were 100% ATST in our SIPP's (we remain around 33%).

I like the crispness and ease of understanding of a limited number of holdings, but who knows, your caution may yet prove correct.

Regards, Newroad

Hariseldon58
Lemon Slice
Posts: 530
Joined: November 4th, 2016, 9:42 pm
Has thanked: 36 times
Been thanked: 308 times

Re: Another Retirement Portfolio

#430097

Postby Hariseldon58 » July 24th, 2021, 11:18 am

I can see a conservative approach here but I would not be surprised to see it underperforming a simple Vanguard LifeStrategy 80 approach.

I really liked the equity income approach when I took early retirement in 2007 but took a more international approach subsequently and I am ambivalent with the distinction between income and capital gains ( often 2 sides of the same coin)

The change in approach has been worth a seven figure sum to me over the subsequent years, it’s not comfortable for everyone but worth considering.

Your portfolio approach would be fine but I think you could do so much better.

Not intended as a criticism but something to consider. One of the challenges in Retirement Investment is if you NEED a set % of income then you have less scope but if you have flexibility and a decent cash equivalent buffer then there is scope to have a potentially higher return portfolio.

Gilgongo
2 Lemon pips
Posts: 151
Joined: November 5th, 2016, 6:51 pm
Has thanked: 40 times
Been thanked: 47 times

Re: Another Retirement Portfolio

#430128

Postby Gilgongo » July 24th, 2021, 3:21 pm

Hariseldon58 wrote:I can see a conservative approach here but I would not be surprised to see it underperforming a simple Vanguard LifeStrategy 80 approach.

...

One of the challenges in Retirement Investment is if you NEED a set % of income then you have less scope but if you have flexibility and a decent cash equivalent buffer then there is scope to have a potentially higher return portfolio.


If I understand you correctly, I think I take a different view on "performance" in that case. I'm not in very interested in whether my portfolio will grow in retirement beause I've already grown it to a point that that I think it can sustain me when it stops growing. Sure, it could always grow more, and we could argue the merits of adding Bitcoin to it or something. But I don't want to chase returns until I die. Now that I've got my pot, I'd rather just set, forget, and live my life outside of all that.

Hariseldon58
Lemon Slice
Posts: 530
Joined: November 4th, 2016, 9:42 pm
Has thanked: 36 times
Been thanked: 308 times

Re: Another Retirement Portfolio

#430133

Postby Hariseldon58 » July 24th, 2021, 4:07 pm

@gilgongo

I wish you well but with 38% in two UK equity income trusts it’s a pretty concentrated bet.

I understand the desire for simplicity but at the least I’d have some diversification of management in a sector. The additional work of holding multiple holdings in an ISA or SIPP can be close to zero, ie a few more dividend entries on a brokers sheet.

I wouldn’t suggest Bitcoin or anything exotic but additional performance allows for either a higher standard of living or significant redundancy in a portfolio.


Return to “Portfolio Management & Review”

Who is online

Users browsing this forum: mark88man and 2 guests