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Taking things forward..

Investment discussion for beginners. Why you should invest your money, get help getting started
buyhighselllow
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Taking things forward..

#126082

Postby buyhighselllow » March 19th, 2018, 6:04 pm

Current assets £125K made up of..
Cash 84K ( largely from sale of funds within ISA )
P2P 25K ( keen to reduce )
Equities 15K, mixture of shares and small fund holdings
Bonds ( Wisealpha ) 1K

Mortgage paid
5 years salary left, saving c£500/month. No longer higher rate tax payer
At 55 pension plus lump sum will give income needed for 5 years.
at 60-67 pension + draw on savings c10K per year
67 onwards State pensions plus works pension covers outgoings fairly easily
( ignoring any possible inheritance as not gaurenteed )

Aim is to create a low maintenance, cheap to run portfolio for steady growth over next 10+ years.
I like the idea of Vanguards global ETF for my equities. I don't want to over commit a lump sum, would feel better putting in a foundation then drip feeding.Understand the need to re-balance occasionally. Would like to keep something back in case of a big dip in the market also.

A bond fund / cash and reducing my P2P exposure would make up the balance. Was looking at Vanguards Global bond index be OK ? Or should I just stick to cash and NSI bonds ?

What proportion of equities should I go to, the received wisdom would be 50-60%, which I could do via our ISAs

Many thanks for any advice

tjh290633
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Re: Taking things forward..

#126095

Postby tjh290633 » March 19th, 2018, 6:34 pm

buyhighselllow wrote:Aim is to create a low maintenance, cheap to run portfolio for steady growth over next 10+ years.
I like the idea of Vanguards global ETF for my equities. I don't want to over commit a lump sum, would feel better putting in a foundation then drip feeding.Understand the need to re-balance occasionally. Would like to keep something back in case of a big dip in the market also.

A bond fund / cash and reducing my P2P exposure would make up the balance. Was looking at Vanguards Global bond index be OK ? Or should I just stick to cash and NSI bonds ?

What proportion of equities should I go to, the received wisdom would be 50-60%, which I could do via our ISAs

Many thanks for any advice


Low maintenance, cheap to run, suggests Investment Trusts to me. Ignore the usual advice on balance between equities and bonds. That has been out of date for 20 years at least. You will want a growing income, which can only come from equities. My approach was to invest for a growing income, and it has worked well. Well ahead of the RPI as can be seen:

Year to      Div/Unit   RPI 
21-Apr-87
05-Apr-88 1.00 1.00
05-Apr-89 0.96 1.08
05-Apr-90 1.51 1.18
05-Apr-91 2.00 1.26
05-Apr-92 2.78 1.31
05-Apr-93 2.55 1.33
05-Apr-94 2.31 1.36
05-Apr-95 2.76 1.41
05-Apr-96 2.72 1.44
05-Apr-97 3.10 1.48
05-Apr-98 3.67 1.54
05-Apr-99 3.10 1.56
05-Apr-00 4.17 1.61
05-Apr-01 4.58 1.64
05-Apr-02 4.81 1.66
05-Apr-03 4.51 1.71
05-Apr-04 5.00 1.76
05-Apr-05 4.88 1.81
05-Apr-06 6.51 1.86
05-Apr-07 7.26 1.94
05-Apr-08 9.09 2.02
05-Apr-09 7.93 2.00
05-Apr-10 4.15 2.11
05-Apr-11 5.82 2.22
05-Apr-12 6.65 2.28
05-Apr-13 7.98 2.34
05-Apr-14 8.43 2.42
05-Apr-15 9.14 2.44
05-Apr-16 8.29 2.47
05-Apr-17 9.13 2.56
19-Mar-18 11.56 2.61

The dividend/unit and the RPI have been rebased to unity at the start. The dividend does not always rise, but over time it is well ahead of inflation.

TJH

buyhighselllow
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Re: Taking things forward..

#126112

Postby buyhighselllow » March 19th, 2018, 7:16 pm

So something like F&C IT ? .. I understand something like this has an excellent track record, but I'm unfamiliar with its fee structure

GeoffF100
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Re: Taking things forward..

#126113

Postby GeoffF100 » March 19th, 2018, 7:17 pm

buyhighselllow wrote:Current assets £125K made up of..
Cash 84K ( largely from sale of funds within ISA )
P2P 25K ( keen to reduce )
Equities 15K, mixture of shares and small fund holdings
Bonds ( Wisealpha ) 1K

Mortgage paid
5 years salary left, saving c£500/month. No longer higher rate tax payer
At 55 pension plus lump sum will give income needed for 5 years.
at 60-67 pension + draw on savings c10K per year
67 onwards State pensions plus works pension covers outgoings fairly easily
( ignoring any possible inheritance as not gaurenteed )

Aim is to create a low maintenance, cheap to run portfolio for steady growth over next 10+ years.
I like the idea of Vanguards global ETF for my equities. I don't want to over commit a lump sum, would feel better putting in a foundation then drip feeding.Understand the need to re-balance occasionally. Would like to keep something back in case of a big dip in the market also.

A bond fund / cash and reducing my P2P exposure would make up the balance. Was looking at Vanguards Global bond index be OK ? Or should I just stick to cash and NSI bonds ?

What proportion of equities should I go to, the received wisdom would be 50-60%, which I could do via our ISAs

Many thanks for any advice

That all looks sensible to me. Ideally, you should fund your essential expenditure from bonds, and non-essential expenditure from equities. Vanguard World VWRL is very convenient, but about 90% VEVE and 10% VFEM buys the same assets and has lower ongoing costs.

buyhighselllow
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Re: Taking things forward..

#126116

Postby buyhighselllow » March 19th, 2018, 7:26 pm

Thanks yes , I had wandered about achieving the same spread via a combo of their other funds

tjh290633
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Re: Taking things forward..

#126216

Postby tjh290633 » March 19th, 2018, 11:19 pm

buyhighselllow wrote:So something like F&C IT ? .. I understand something like this has an excellent track record, but I'm unfamiliar with its fee structure

Look at its annual report, http://www.fandc.com/foreign-and-coloni ... rBE9ucuDcs page 83.

TJH


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