The 2020s

[ADrunkenMarcus]

Good morning,

The 2020s are coming.

Which, and how many, of your individual holdings (i.e. shares, investment trusts) do you expect you’ll still hold in 2030? And why?

Which sectors do you love?

Tobacco?

Pharma?

Banks?

PEEK makers?

Distillers and vintners?

Which do you think will prosper?

Best wishes

Mark.

[swill453]

Which, and how many, of your individual holdings (i.e. shares, investment trusts) do you expect you’ll still hold in 2030? And why?

All of them. Bought for income, they're doing their job just fine.

(Nine investment trusts and a couple of ETFs)

Scott.

[tjh290633]

Mark, if I survive until 2030 I shall be 97. I expect to have moved into ITs before then, although I'm in no hurry to do so.

I expect that some of my 35 shares will have gone by then, due to takeover or amalgamation. I might have gained others through demergers. If I were to add another holding, I think that PHP, Primary Health Properties, would be a likely candidate. Will Aviva stick or twist? Will someone snaffle Marston's? It's anybody's guess.

TJH

[hiriskpaul]

Interesting question, 10 years is a long time and a lot can happen personally and in the markets.

For bonds it is easy. All but one of our directly held bonds will have matured, so they will obviously have gone. The other, a Tesco bond, will likely go soon as the yield is low and I am seeing better opportunities elsewhere.

We still hold a fairly substantial amount of undated bonds and preference shares, mostly picked up in the early days of the GFC. I am aiming to sell most of my Lloyds prefs by 2030, it is really only a reluctance to pay capital gains tax that is holding me back from selling the lot asap. As for the others, I really don't know as it depends on what happens to values relative to other opportunities that might arise.

Over the last couple of weeks I have been buying Manchester Building Society PIBS as I think there is a reasonable chance of a recovery, winding up or takeover. I really hope we are not still holding those in 10 years time unless payments are being made (payments are currently suspended).

Our equity investments are now mostly in ETFs and tracker funds. With this portfolio I am doing my best not to have a view as to market valuations, etc. Just LTBH and reinvest dividends. As time goes by I am finding "invest and ignore" easier and unless some period of personal madness sets in I would expect to still be holding in 10 years time.

My biggest IT investment is in Templeton Emerging Markets and I would hope to be out by 2030. Again it is really only a reluctance to pay CGT that keeps me holding.

The only sector "tilt" we have is to US REITs, via the Vanguard ETF VNQ, which I hold in my SIPP. SIPPs are a very tax efficient way to hold US REITs as distributions are free of all taxes, including US withholding tax and I expect to hold indefinitely, but I might be tempted out if we get a bubble in US property prices.

[Dod101]

I don't love any sector or individual share but I have held some shares for a very long time (upwards of 25 years) and I am unlikely to voluntarily give up on any of those . We cannot help takeovers of course and some of those could disappear that way. They are as follows

Unilever
Legal & General
HSBC
Royal Dutch Shell
BAT
Imperial Tobacco

Of the ITs, I have held Scottish Mortgage, Caledonia, Alliance and Edinburgh for upwards of 20 years.

The other 20 or so shares/ITs that I currently hold have been part of an evolving process and some I have held for more than ten years and some less. I think many are in the financial sector. It is a big sector!

I cannot say what will be in my portfolio in ten years time but currently I would expect the shares listed plus the ITs I have mentioned. I have no theme in mind and am actually fairly happy with my portfolio as it currently stands, although it looks as if I may trim Scottish Mortgage as my first trade of the new year. It has done very well this year but with virtually no yield I will recycle maybe 15/20% of it into a dividend yielding share. Its portfolio is now over £8 billion and I see that some commentators are beginning to worry about how nimble it can remain. It never has been nimble though, so that aspect does not worry me too much.

Dod

[Parky]

I expect to hold all of the dozen or so ITs I hold now. Most have been around for many decades, including Foreign and Colonial, established in 1868. I expect the fund managers to manage shorter-term portfolio changes for me - that's what I pay them for.

[Lootman]

The 2020s are coming. Which, and how many, of your individual holdings (i.e. shares, investment trusts) do you expect you’ll still hold in 2030? And why? Which sectors do you love?

PEEK makers?

OK, I have to ask. What is a PEEK? But to your question, if I have to ask what it is then I won't be investing in it.

Mark, if I survive until 2030 I shall be 97. I expect to have moved into ITs before then, although I'm in no hurry to do so.

I expect that some of my 35 shares will have gone by then, due to takeover or amalgamation. I might have gained others through demergers. If I were to add another holding, I think that PHP, Primary Health Properties, would be a likely candidate. Will Aviva stick or twist? Will someone snaffle Marston's? It's anybody's guess.

You are 20 years older than me and I am already simplifying my portfolio in anticipation of being less able to manage my (admittedly complex) set of strategies and holdings. Within an ISA it is easy to simplify without tax consequences. And even in my taxable accounts I am happy to pay 10% or 20% CGT to capture gains, given that I cannot envisage CGT ever being at lower rates, even sans Corbyn.

Like Hiriskpaul, I favour ETFs and tracker funds for their ability to deliver beta at near zero costs. And I am fortunate enough to have an amount in the markets that means that even average market returns will see me doing very well. Whereas taking more risk to capture alpha on top isn't really worth it for me, other than for the fun of it.

But where I want to add an overlay of specific bets on the market, I'd favour precious metals producers, healthcare and biotech, IT and - the laggard of the last decade - energy. I expect to continue to be 90% invested outside the UK.

[Walkeia]

I'm looking at my investment horizon for the long haul (hopefully) being in my early 30s.

For the next decade I think technology will continue to be the must have exposure. I cannot see how our daily lives will not become ever more dependent and intertwined with it. I am not an expert in the sector therefore buy it via monthly additions to VWRL where it accounts for ~15%... but Morningstar seem to classify Amazon as consumer cyclicals (1.5%) and Facebook as communication services (1%) which seem odd to me.

I'm always amazed how many people have no exposure to the big US tech companies when I speak to colleagues and friends. My generation all heavily use their services and love their products (privacy concerns to one side when I say this) yet don't own the equity instead favouring UK property (BTL) or FTSE 100 etc.

To give my view on any anti-trust aspects. I read an excellent article in the economist a while back about breaking up big tech. They compared current tech to Standard Oil in the early 1900s or Microsoft in the 90s. The story goes - Rockerfeller's response to hearing about the anti-trust break up of standard oil on the golf course was to tell his playing partner, 'buy shares in standard oil'. In that the respective parts were worth more than the whole.

[Lootman]

For the next decade I think technology will continue to be the must have exposure. I cannot see how our daily lives will not become ever more dependent and intertwined with it. I am not an expert in the sector therefore buy it via monthly additions to VWRL where it accounts for ~15%... but Morningstar seem to classify Amazon as consumer cyclicals (1.5%) and Facebook as communication services (1%) which seem odd to me.

I'm always amazed how many people have no exposure to the big US tech companies when I speak to colleagues and friends. My generation all heavily use their services and love their products (privacy concerns to one side when I say this) yet don't own the equity instead favouring UK property (BTL) or FTSE 100 etc.

Amazon is considered a retail share and is a huge weighting in retail sector indices and ETFs. There is logic to that although if Amazon continues to grow its entertainment and cloud divisions then it will truly be a hybrid animal that doesn't naturally belong in any traditional sector.

S&P changed their sectors a while ago and migrated companies like FaceBook, Google, Disney and Netflix to the Communications Services sector. Before that it was basically a phone service sector, with AT&T and Verizon dominating.

It's impossible to argue against US big tech. Apple is up something like 80% in 2019 - amazing for a company that was that large to start out with.

[Walkeia]

But where I want to add an overlay of specific bets on the market, I'd favour precious metals producers, healthcare and biotech, IT and - the laggard of the last decade - energy. I expect to continue to be 90% invested outside the UK.

Thanks Lootman for the info on S&P classifications. I didn't know this and I guess it makes sense otherwise a whole host of companies could arguably be classified as tech so sectoral classifications would become useless.

I was interested in your view above - I agree with the sectors you highlight except I have mixed views on energy - could I ask you to elaborate your view here please?

My view is mixed - in that green energy and battery technology will continue to advance and become ever more important so these sectors I am very positive on. Oil and fossil fuel related energy I am not so sure - but I haven't looked at updated valuations so don't feel i can write oil companies off entirely etc.

[Spet0789]

The 2020s are coming. Which, and how many, of your individual holdings (i.e. shares, investment trusts) do you expect you’ll still hold in 2030? And why? Which sectors do you love?

PEEK makers?

OK, I have to ask. What is a PEEK? But to your question, if I have to ask what it is then I won't be investing in it.

Mark, if I survive until 2030 I shall be 97. I expect to have moved into ITs before then, although I'm in no hurry to do so.

I expect that some of my 35 shares will have gone by then, due to takeover or amalgamation. I might have gained others through demergers. If I were to add another holding, I think that PHP, Primary Health Properties, would be a likely candidate. Will Aviva stick or twist? Will someone snaffle Marston's? It's anybody's guess.

You are 20 years older than me and I am already simplifying my portfolio in anticipation of being less able to manage my (admittedly complex) set of strategies and holdings. Within an ISA it is easy to simplify without tax consequences. And even in my taxable accounts I am happy to pay 10% or 20% CGT to capture gains, given that I cannot envisage CGT ever being at lower rates, even sans Corbyn.

Like Hiriskpaul, I favour ETFs and tracker funds for their ability to deliver beta at near zero costs. And I am fortunate enough to have an amount in the markets that means that even average market returns will see me doing very well. Whereas taking more risk to capture alpha on top isn't really worth it for me, other than for the fun of it.

But where I want to add an overlay of specific bets on the market, I'd favour precious metals producers, healthcare and biotech, IT and - the laggard of the last decade - energy. I expect to continue to be 90% invested outside the UK.

PEEK is Polyether Ether Ketone. It’s a high performance plastic used in high end engineering - aerospace, automotive and medical.

I’m guessing from its inclusion in the list that the OP owns Victrex, who make it and sell it at 50% margins. So do I. (Own Victrex, not make PEEK!).

[77ss]

Good morning,

The 2020s are coming.

Which, and how many, of your individual holdings (i.e. shares, investment trusts) do you expect you’ll still hold in 2030? And why?

Which sectors do you love?

....

FCIT.

The rest, well, who knows? Ten years is a long time. Technological and social change, political interference and unrest, sheer managerial incompetence, takeovers, demergers, wars......

[JoyofBricks8]

As always: Predictions are difficult, especially about the future....

Nonetheless I am prepared to offer a few hostages to fortune:

On the macro level: No big reversals in the trends we see today. Population will continue to exponentially rise. America will continue to prosper and invent the future. No collapse will occur there. The Communist Party of China will regrettably continue to bring more of the world under its malign influence. The EU will continue to stagnate economically. Asia will accelerate living standards and prosperity as infrastructure buildout continues, funded with a flood of Chinese cash.

On the absolutely critical energy supply front: Green boondoggles will continue to proliferate due to political favour despite their dubious energy output merits. Wind being the exception that actually washes its face. Electricity output globally will continue to soar. On liquid fuels: The US hydro-fracking phenomenon will continue through the decade but stutter towards the end as sweet spots exhaust, leaving us back towards the peak oil predicament that was such an issue around the turn of the millennium.

For me, the influence of the big technology companies will only grow, there is still a considerable scope for further expansion in search and online retail, as the globe gets better telecoms infrastructure and more connected.

So for me the next decade is all about the tech sector and the emerging markets, with the potential threat to the rosy picture being an oil supply that could fail to keep pace with population demand. Overall the picture is rather good. Low interest rates will continue indefinitely. The party has a lot longer to run. A great time to be alive and and invested.

[Lootman]

The 2020s are coming. Which, and how many, of your individual holdings (i.e. shares, investment trusts) do you expect you’ll still hold in 2030? And why? Which sectors do you love?

PEEK makers?

OK, I have to ask. What is a PEEK? But to your question, if I have to ask what it is then I won't be investing in it.

PEEK is Polyether Ether Ketone. It’s a high performance plastic used in high end engineering - aerospace, automotive and medical.

I’m guessing from its inclusion in the list that the OP owns Victrex, who make it and sell it at 50% margins. So do I. (Own Victrex, not make PEEK!).

OK, thanks. Funnily enough I have a position in Victrex but had no idea about PEEK.

But where I want to add an overlay of specific bets on the market, I'd favour precious metals producers, healthcare and biotech, IT and - the laggard of the last decade - energy. I expect to continue to be 90% invested outside the UK.

Thanks Lootman for the info on S&P classifications. I didn't know this and I guess it makes sense otherwise a whole host of companies could arguably be classified as tech so sectoral classifications would become useless.

I was interested in your view above - I agree with the sectors you highlight except I have mixed views on energy - could I ask you to elaborate your view here please?

My view is mixed - in that green energy and battery technology will continue to advance and become ever more important so these sectors I am very positive on. Oil and fossil fuel related energy I am not so sure - but I haven't looked at updated valuations so don't feel i can write oil companies off entirely etc.

I am not climbing aboard the global warming anti-everything train that some ideologues are selling. Despite the obvious appeal of solar and wind energy sources we are going to be reliant on carbon fuels for a century or so. You will not be flying to New York on wind power any time soon, and I think that Swedish child is mentally ill and self-absorbed.

But if the current hysteria means that Exxon is under-valued then I will double down. My main focus is energy in politically sound locations, like North American shale and fracking locations. So on dips I buy more Sunoco, EOG, Diamondback, Pioneer and Concho.

[Bubblesofearth]

Twin drivers of population and GDP growth will underpin increased demand for energy. Worth noting that, contrary to what a previous poster has stated, population is no longer increasing exponentially (it is now closer to linear) but is still forecast to reach around 10bn this century. There will be the need for both increased renewables and FF's. Oil is, as ever, interesting and uncertain. However, just as fags were shunned for fears of regulation 20 years ago I think oil companies are currently undervalued because of fears of both climate change and demand destruction. I don't see the latter happening in the next 10 years and will keep, or even add to, my positions in oil companies. BP and Shell are currently paying over 6% in dividends.

The other big trend, in the developed World at least, is an ageing demographic. This will mean healthcare providers will have a tail-wind and investments in Pharma, replacement body parts, leisure companies etc should do well if picked up at a good price.

Banks also may have turned the corner, especially with the rise of cash-free transactions, but I remain cautious simply because of the complexity of some of their activities!

An area that could face head-winds is retail. If people are spending more on essentials such as energy and healthcare then spending on more discretionary items could suffer. Also environmental pressure to reduce consumption will increase in the next 10 years.

BoE

[fca2019]

I'm planning on early retiring in the 20s, so going with conservative portfolio. Try to avoid growth funds and stock. Look to have a HYP at some future point as a sideline.

In terms of trends I'd expect global population growth to slow and ageing being the big issue, so healthcare would be a sector to be overweight in.

[Spet0789]

OK, I have to ask. What is a PEEK? But to your question, if I have to ask what it is then I won't be investing in it.

PEEK is Polyether Ether Ketone. It’s a high performance plastic used in high end engineering - aerospace, automotive and medical.

I’m guessing from its inclusion in the list that the OP owns Victrex, who make it and sell it at 50% margins. So do I. (Own Victrex, not make PEEK!).

OK, thanks. Funnily enough I have a position in Victrex but had no idea about PEEK.

But where I want to add an overlay of specific bets on the market, I'd favour precious metals producers, healthcare and biotech, IT and - the laggard of the last decade - energy. I expect to continue to be 90% invested outside the UK.

Thanks Lootman for the info on S&P classifications. I didn't know this and I guess it makes sense otherwise a whole host of companies could arguably be classified as tech so sectoral classifications would become useless.

I was interested in your view above - I agree with the sectors you highlight except I have mixed views on energy - could I ask you to elaborate your view here please?

My view is mixed - in that green energy and battery technology will continue to advance and become ever more important so these sectors I am very positive on. Oil and fossil fuel related energy I am not so sure - but I haven't looked at updated valuations so don't feel i can write oil companies off entirely etc.

I am not climbing aboard the global warming anti-everything train that some ideologues are selling. Despite the obvious appeal of solar and wind energy sources we are going to be reliant on carbon fuels for a century or so. You will not be flying to New York on wind power any time soon, and I think that Swedish child is mentally ill and self-absorbed.

But if the current hysteria means that Exxon is under-valued then I will double down. My main focus is energy in politically sound locations, like North American shale and fracking locations. So on dips I buy more Sunoco, EOG, Diamondback, Pioneer and Concho.

Wow! Making PEEK is pretty much all Victrex does. Do you make your investment decisions just on the numbers? Terry Smith wrote an interesting piece on that a few years ago using Microsoft as the example.

[dspp]

The 2020s are coming. Which, and how many, of your individual holdings (i.e. shares, investment trusts) do you expect you’ll still hold in 2030? And why? Which sectors do you love?

PEEK makers?

OK, I have to ask. What is a PEEK? But to your question, if I have to ask what it is then I won't be investing in it.


PEEK is Polyether Ether Ketone. It’s a high performance plastic used in high end engineering - aerospace, automotive and medical.

I’m guessing from its inclusion in the list that the OP owns Victrex, who make it and sell it at 50% margins. So do I. (Own Victrex, not make PEEK!).

It is worth noting that PEEK is also used in hydrocarbon valve seals, including inside downhole oil widgets. I first used it in a downhole design back in the mid 1990s, and the size I needed was at the larger end of what was then available. If hydrocarbon use declines - which I do not expect over the next decade, though there is a low probability of that - then PEEK will see a downturn except in the medical area.

regards, dspp

[Steveam]

I’m planning to reduce my holding in BHP as I expect thermal coal producers to be increasingly under pressure. I have other miners (RIO & S32) so this is also a rebalance from overweight miners to slightly underweight.

Other than this very specific change I’m planning to do nothing despite thinking retail banking may suffer at the hands of technology and Amazon is a bit of an unknown for food shopping (I hold Tesco).

In general I expect large, well managed businesses to evolve to cope with changes. I’m slightly overweight Asia because I think the changing demographic composition will favour developing Asia.

Black swans are possible (even likely) so diversification helps.

[Lootman]

Making PEEK is pretty much all Victrex does. Do you make your investment decisions just on the numbers? Terry Smith wrote an interesting piece on that a few years ago using Microsoft as the example.

Yes, I do use technicals a lot. Outside of a couple of fields I do not consider I have an edge in fundamentals. My approach is also top down rather than bottom up.

I bought it a good number of years ago when I wanted a UK holding in the Chemicals space and there were slim pickings. I also hold Synthomer. Both have done well and I don't question a holding if it rewards me, as both have.