All Hale Tim's portfolio

[Chukky]

Hi Everyone,

I'm working my way thorough Tim Hale's book 'Smarter Investing' and I have to say although he really labour's some points I am am converted to the benefits of being the market rather than trying to actively beat the market.

My current SIPP is in a Vanguard Target Retirement Fund. Now having read Mr Hale's book I realise that there is a large UK bias and under representation of Emerging Markets, Small and Value.

An example of Tim Hale's portfolio is number 9 on this list in this link:

https://monevator.com/9-lazy-portfolios ... tors-2010/

I would like to add these 'tilts' too

My options are:

1. Sell up and rebuild an 8 or so fund portfolio, not rocket science and relatively painless as my current holdings aren't huge, I get trading credits with ii.
I can then rebalanced annually

2. Keep the Vanguard Target Retirement fund and add the tilts in the form of additional ETFs, a little more complicated to balance the various exposure percentages. But ultimately dilute the 'home bias' .

The reason for option 2 is the sliding scale of lifestyling/bond exposure from Vanguard as one nears retirement and I like the idea of the automatic rebalancing between equities and bonds.

I wonder if anyone has combined a Vanguard Lifestrategy or Target Retirement with the 'tilts' and how you may be managing?

Thanks

[Hariseldon58]

Tim Hale’s book is a good read and persuasive.

The Monevator link you posted is from 6 years ago and is a little dated. Tim Hale brought out a second edition of his book and back pedalled on the commodities tilt.

There are a lot more ETFs that allow you to focus on ‘tilts’, it’s worth noting that Value has underperformed for many years and there is debate that the widespread knowledge of tilts outperforming may be there undoing, George Soro’s has written about this , his theory of Reflexivity. https://www.investopedia.com/terms/r/reflexivity.asp

Lars Kroijer has written a good book “Investing Demystified” who promotes passive global investing and is not a fan of tilts.

Diversified and low cost are a good basis for investing for the long term and I wouldn’t get hung up on the minutiae of portfolio allocation, it won’t make a massive amount of difference.

The broad balance between stocks / bonds is important, I personally found “Rational Expectations: Asset allocation for investing adults” by William Bernstein very enlightening.

In answer to your original question I would add to your Vanguard plan the tilts you want, with the Vanguard plan as the core portfolio.

It’s worth reading more than one book and regular saving into low cost diversified collector assets is likely to be satisfactory.

[Alaric]

My current SIPP is in a Vanguard Target Retirement Fund.

You may need to check out the fund's objective. If you aren't intending to buy an annuity or take the whole fund as a cash lump sum, an objective of maximising value in a given future year (if that's what it means by "Target") isn't necessarily what you want.

[xxd09]

Your point re U.K. bias in composition of Fund is true
I think Vanguard is aware of this
The UK section is made up international companies so home bias effect may not be as severe as appears
Probably not much effect in the long run
xxd09

[Gadgeisbackagain]

Slightly confused by your reasoning.

You say that you are converted to being the market and not trying to beat it?
Why buy any tilts then?

If you just want to be the stock market globally, buy VWRL and you will be. Simple.

If you want to own a global portolio. Then choose the defense level you require, buy VG LS and you are done.
Unless you want some gold or commercial property or sustainable investments or forestry or ...

Gets complicated pretty quick eh?

I suggest you think about what you want to be invested in and why a bit more.
Then make your investments as simple as possible.

It is a bit like photography really, ultimately it is what you leave out that really makes a picture work.

I also suggest waiting until you finish reading the book and then go on holiday for a fortnight before doing anything

Gadge