Aminatidi wrote:I'm playing around on Trustnet and Portfolio Visualiser with various mixes of asset classes and volatility and risk level.
One question I've never actually asked myself is "What return do I need?".
Of course the obvious answer to what I want is "as much as possible".
Playing around with (these are simple examples) blends of an equal mix (to avoid manager risk) of:
* Capital Gearing
* Troy Trojan
* Ruffer Total Return
* Senica Diversified Income
(four defensive options that leap to mind)
10 year average returns are 6.6% so you're doubling your return approx every 10 years with a very smooth ride.
Throw in a portion of Fundsmith or Lindsell Train and of course returns improve with some added risk and volatility.
It has got me thinking how much I need to return vs. how much I want to return.
Anyone care to share how they've worked this out other than a finger in the air?
- 20% over 15 years (compounded)
- 0% (could even cope with small loss over that period)
- Add 20K pa to pension (company scheme - I'm 40% tax). Best guess 10% return. Over 15 years. Self chosen investments
- Consider redistribution of current pension pot to improve annual growth. Target 6.6% growth over 15 years.
- End out of improved pension pot after 15 years = £280K
- Do not exceed 4% draw down on current pension (outwith additional £20K pa)
- Monthly shortfall upon retirement = Nil (noting income from state pension)
- Additional £300K "swamps" my "need" and moves me closer to "want/prefer"
- My health
- "Overthinking/overestimating" my ability to self invest/help
- Buy a farm (A Warren Buffett Farm)