What return are you targeting?

[Aminatidi]

All thank you so far

@Xeny that was very much food for thought.

Part of my original question was that I believe I'd be content to put more of the remaining cash in across a variety of the more diversified lower risk funds and trusts.

As a general question are people here not familiar with Fundsmith and Lindsell Train? Fully appreciate they've had a stellar run which may not continue but some of the replies almost suggest "What are those?" which is confusing.

[Dod101]

All thank you so far

@Xeny that was very much food for thought.

Part of my original question was that I believe I'd be content to put more of the remaining cash in across a variety of the more diversified lower risk funds and trusts.

As a general question are people here not familiar with Fundsmith and Lindsell Train? Fully appreciate they've had a stellar run which may not continue but some of the replies almost suggest "What are those?" which is confusing.

I think most here will know about Fundsmith and Lindsell Train. Why do you ask? You already have exposure to them.

I do not hold Fundsmith but I do have Smithson which is organised as an investment trust which I prefer anyway. Re Lindsell Train, I hold Finsbury Growth and Income, another IT you may like to consider.

Dod

[Aminatidi]

If the premium came down I'd be all over RIT a somewhere to park a chunk.

The comment on Lindsell Train and Fundsmith was because I keep considering one of the more generalist ITs but have concerns about increasing my direct equity exposure, plus the two funds have done so well so far that it's difficult to look past them.

There have been a couple of replies that come across almost as if overlooking that I've got 30% in concentrated equity exposure already

[Aminatidi]

Penultimately, personally I dislike absolute return funds - they seem to never do that well when the market is going up, they still seem to drop when the market falls. Hopefully you're at least not paying that 5% initial fee the KIIID mentions on the GC Absolute return fund.

Just to cover this bit, absolutely no so far as the fees on the KIID either on the IT or the OEIC.

Like yourself I'm cautious of absolute return funds.

I think the CG Absolute Return fund is actually oddly/badly named as it's more or less an OEIC version of the Capital Gearing Trust investment trust.

Lots of alternatives and they have a proven track record of carving out returns.

I'd be much more wary of almost any other "absolute return" fund I can think of.

[xeny]

There have been a couple of replies that come across almost as if overlooking that I've got 30% in concentrated equity exposure already

Apologies for repeating myself, but you've got a 10-20 year time horizon - what is your rationale against a say 80% equity exposure - do you intend to reallocate after an expected imminent market correction?

I'm asking partly because I've a significantly shorter time horizon and a significantly higher equity exposure - it's helpful to hear someone else's reasoning that disagrees with your own.

[Itsallaguess]

There have been a couple of replies that come across almost as if overlooking that I've got 30% in concentrated equity exposure already..

For clarity, is that 30% of your invested capital, or 30% of total capital including your cash and NS&I linkers?

If it's 30% of your invested capital, would a more appropriate way of measuring it be to include your cash and linkers, and then call it 15%?

If you did, I think you can then begin to see why the replies you mention above might be viewed in that way by the posters giving them.

I'm not suggesting that you do anything to actually change your risk-positioning, as that's something entirely up to you to decide, but my question above is just to try to point out what might be a discrepancy between your own views (ex-cash and linkers), and those of the replies you mention, which might be taking a view of your total capital, including both already-invested funds and also the cash/linkers...
Cheers,

Itsallaguess

[Dod101]

I am living off my investments and my equity exposure is around 85% of my investment assets. About 5% in bond funds and the rest in cash or cash equivalents. That has been the case for years and I have no intention of changing it so whilst it is up to you how you invest, personally I think you are being much too cautious, given your timescale.

Dod

[Walrus101]

There have been a couple of replies that come across almost as if overlooking that I've got 30% in concentrated equity exposure already..

For clarity, is that 30% of your invested capital, or 30% of total capital including your cash and NS&I linkers?

If it's 30% of your invested capital, would a more appropriate way of measuring it be to include your cash and linkers, and then call it 15%?

If you did, I think you can then begin to see why the replies you mention above might be viewed in that way by the posters giving them.

I'm not suggesting that you do anything to actually change your risk-positioning, as that's something entirely up to you to decide, but my question above is just to try to point out what might be a discrepancy between your own views (ex-cash and linkers), and those of the replies you mention, which might be taking a view of your total capital, including both already-invested funds and also the cash/linkers...
Cheers,

Itsallaguess

I interpreted the portfolio as

50% GBP Cash
7.5 % Fundsmith
7.5% LTGE
35% Expensive Wealth Preservation and Alternatives Funds.

[Walrus101]

I am living off my investments and my equity exposure is around 85% of my investment assets. About 5% in bond funds and the rest in cash or cash equivalents. That has been the case for years and I have no intention of changing it so whilst it is up to you how you invest, personally I think you are being much too cautious, given your timescale.

Dod

I would also be wary of paying the fees for all those wealth preservation funds, I'd also suspect you'd need to keep a fairly close eye on what each is holding to try and make sense of your portfolio.

[Aminatidi]

There have been a couple of replies that come across almost as if overlooking that I've got 30% in concentrated equity exposure already

Apologies for repeating myself, but you've got a 10-20 year time horizon - what is your rationale against a say 80% equity exposure - do you intend to reallocate after an expected imminent market correction?

I'm asking partly because I've a significantly shorter time horizon and a significantly higher equity exposure - it's helpful to hear someone else's reasoning that disagrees with your own.

Simply put over 18 months I've gone from having £200K sitting in the bank plus a salary coming in every month, to having £120K invested and still all that cash in the bank.

It's a huge psychological hurdle to put that at too much risk and for the moment I feel 50% stocks exposure is sufficient given 18 months ago I was making 0.5% on it.

So rightly or wrongly I'd be far more comfortable waking up tomorrow and dropping, say, £20K of the cash pile into PNL or CGT or similar than I would putting £10K into F&C or SMT or whatever.

Whilst nobody has a crystal ball I'm comfortable that those funds have the track record to carve out a reasonable return and let me sleep at night.

I did manage to sit through the December "wobble" without doing anything, not sure I'd have been comfortable doing that if I were looking at a paper loss during the event of £40K for example.

I wouldn't necessarily call it sound reasoning but psychology is huge

[xeny]

I wouldn't necessarily call it sound reasoning but psychology is huge

Agreed - psychology is more than half the battle. In another place I've seen people comment the greatest benefit to their return an IFA offers is psychological support during market wobbles.

If/as you get more confident it may be worth re-reading bits of this thread - I'm painfully aware from my own investing history that while the rational time to take on greater investment risk is when you're time horizon is greatest, unfortunately that's when I was least confident to take on risk.

[Aminatidi]

I wouldn't necessarily call it sound reasoning but psychology is huge

Agreed - psychology is more than half the battle. In another place I've seen people comment the greatest benefit to their return an IFA offers is psychological support during market wobbles.

If/as you get more confident it may be worth re-reading bits of this thread - I'm painfully aware from my own investing history that while the rational time to take on greater investment risk is when you're time horizon is greatest, unfortunately that's when I was least confident to take on risk.

Absolutely and I can well believe the point on an IFA.

I think the thing I'm struggling with is a suggestion (not aimed at yourself ) that I'm being super uber cautious when if you look across what I have invested (ignore the cash pile) I have what appears a 50% equity exposure, whilst a LifeStrategy 60 or similar product doesn't seem to be considered super uber cautious.

I wonder if the PNLs and Ruffer's and CGTs have built too much of a reputation for being super uber cautious that people have stopped looking at how they've performed over time v 100% stocks.

[tjh290633]

There have been a couple of replies that come across almost as if overlooking that I've got 30% in concentrated equity exposure already

Apologies for repeating myself, but you've got a 10-20 year time horizon - what is your rationale against a say 80% equity exposure - do you intend to reallocate after an expected imminent market correction?

I'm asking partly because I've a significantly shorter time horizon and a significantly higher equity exposure - it's helpful to hear someone else's reasoning that disagrees with your own.

Simply put over 18 months I've gone from having £200K sitting in the bank plus a salary coming in every month, to having £120K invested and still all that cash in the bank.

It's a huge psychological hurdle to put that at too much risk and for the moment I feel 50% stocks exposure is sufficient given 18 months ago I was making 0.5% on it.

So rightly or wrongly I'd be far more comfortable waking up tomorrow and dropping, say, £20K of the cash pile into PNL or CGT or similar than I would putting £10K into F&C or SMT or whatever.

Whilst nobody has a crystal ball I'm comfortable that those funds have the track record to carve out a reasonable return and let me sleep at night.

I did manage to sit through the December "wobble" without doing anything, not sure I'd have been comfortable doing that if I were looking at a paper loss during the event of £40K for example.

I wouldn't necessarily call it sound reasoning but psychology is huge

December was just a minor hiccup. I've ridden out some 50% falls in the market while staying fully invested.

TJH

[Walrus101]

I'd just be wary of the notion that Ruffer Pnl and CGT are safe and that you won't lose money holding them. IMO the Tips they are holding are expensive and I'd rather have cash gold and some alts.

[Aminatidi]

I'd just be wary of the notion that Ruffer Pnl and CGT are safe and that you won't lose money holding them. IMO the Tips they are holding are expensive and I'd rather have cash gold and some alts.

I'm 100% clear that I may lose money.

I'd hope that they will limit that loss v 100% stocks, with the upside being limited too of course.

[Dod101]

December 2018? It hardly registered with me I must say. That is not being blasé, simply a fact. I am not saying that so called preservation funds do not have a place but more at my end of the spectrum than yours I think. Anyway, as you say psychology and personal outlook is very important but I can assure you that I am very conservative in my outlook and have always been so.

Good luck to you whatever you do.

Dod

[Aminatidi]

December 2018? It hardly registered with me I must say. That is not being blasé, simply a fact. I am not saying that so called preservation funds do not have a place but more at my end of the spectrum than yours I think. Anyway, as you say psychology and personal outlook is very important but I can assure you that I am very conservative in my outlook and have always been so.

Good luck to you whatever you do.

Dod

I sat December out and didn't do anything, but it sure as hell made me ask myself how I'd have reacted if it was 40% or 50% or 60% and it was 80 to 100% of my net worth that was happening to.

I don't see anything wrong with believing I'd have probably panicked - better to realise it before it happens and do something that to not realise it and then panic is how I see it

[xeny]

I think the thing I'm struggling with is a suggestion (not aimed at yourself ) that I'm being super uber cautious when if you look across what I have invested (ignore the cash pile) I have what appears a 50% equity exposure, whilst a LifeStrategy 60 or similar product doesn't seem to be considered super uber cautious.

I wonder if the PNLs and Ruffer's and CGTs have built too much of a reputation for being super uber cautious that people have stopped looking at how they've performed over time v 100% stocks.

The thing is that LS 60 is often used as a whole portfolio product - you'd put everything in it, and posters here tend to look at the entirety of their assets - this is partly why I'm asking "what does that cash pile buy you, apart from making it harder to achieve a decent overall % return?". It's an asset, what are you getting out of it?

You might find it interesting to read some of the posts at https://simplelivingsomerset.wordpress.com/ where he talks about investing and human capital - if you look at what you've got in cash and what you're yet to earn/invest, your % invested is very conservative indeed.

With regard to how funds behave in a downturn, have you looked at I think the most recent Fundsmith Annual Shareholder's meeting video, where he discusses backtesting the fund through the 2001 and 2008 downturns?

[Aminatidi]

Yes but splitting it out that's two issues I guess:

* Total amount invested v "cash in the bank earning sod all"
* Choice of Investment

I'm reasonably comfortable right now with the choice of investment so I guess I should turn some of my attention to how to move more of the cash in the bank into the General Account.

One of my frustrations there is that trading fees on ITs means for ITs to make sense you need to jump in with a reasonable amount whilst with OEICs you can of course drip the money in but there are platform fees.

Appreciate it will vary massively but out of curiosity what sort of amounts are people dropping into ITs where they think the fees and stamp duty make more sense than an OEIC?

[xeny]

One of my frustrations there is that trading fees on ITs means for ITs to make sense you need to jump in with a reasonable amount whilst with OEICs you can of course drip the money in but there are platform fees.

Appreciate it will vary massively but out of curiosity what sort of amounts are people dropping into ITs where they think the fees and stamp duty make more sense than an OEIC?

I think you're being a bit platform centric there - there are platforms where there's no platform fee difference between ITs and OEICs.

If you're comparing recurring platform fees on OEICs with transaction fees on ITs, isn't it equally important to consider how long you intend to hold the asset?