Re: The Conviction Five: 2006-19
Posted: January 1st, 2021, 9:47 am
Bagger is so right.
We built our pot with roughly 70% in all out growth, well away from the FTSE100, and even the 30% income component itself was not FTSE dominated at all. Never regretted it. In our case it was all essentially done through ITs, nowadays we hold mostly ITs and a few ETFs for specific themes or markets. Without that approach, if we had put it in a typical HYP instead (as for example posted by one poster yesterday) , we would not have been in the comfortable retirement position we are in today because our returns in the pot building decades would have been quite a few percentage point lower(I reckon about 3%) each year on average, making a compounded very large difference in our pot size over our decades of pot building. We would have ended up chasing yield in retirement, highly undesirable imho, whereas now we can still have about 40% of our portfolio in a growth component, and our income component has a lot of built in slack, so we will use a smaller proportion of its income than planned in 2021. And we won't need to touch my wife's ISA for our retirement needs at all, the brood will enjoy that. When I did the switch, from 70% in the growth component to around 40%, as we approached retirement, the costs were peanuts in portfolio value terms, so the arguments against having to do that which HYPers are fond of are invalid. We feel that we won't have to do much in our portfolios, beyond re investing the slack in my ISA's income twice yearly, just after the two yearly peaks of spare income. And that slack won't go anywhere an HY investment, as Bagger says, the best of investing future is elsewhere.
A happy, prosperous year to you all. Few of us will regret the passing of 2020.
Some will rejoice re Brexit, I hope they are right for all our sakes, but I fear the reverse will prove true in the long term.
Plodder
We built our pot with roughly 70% in all out growth, well away from the FTSE100, and even the 30% income component itself was not FTSE dominated at all. Never regretted it. In our case it was all essentially done through ITs, nowadays we hold mostly ITs and a few ETFs for specific themes or markets. Without that approach, if we had put it in a typical HYP instead (as for example posted by one poster yesterday) , we would not have been in the comfortable retirement position we are in today because our returns in the pot building decades would have been quite a few percentage point lower(I reckon about 3%) each year on average, making a compounded very large difference in our pot size over our decades of pot building. We would have ended up chasing yield in retirement, highly undesirable imho, whereas now we can still have about 40% of our portfolio in a growth component, and our income component has a lot of built in slack, so we will use a smaller proportion of its income than planned in 2021. And we won't need to touch my wife's ISA for our retirement needs at all, the brood will enjoy that. When I did the switch, from 70% in the growth component to around 40%, as we approached retirement, the costs were peanuts in portfolio value terms, so the arguments against having to do that which HYPers are fond of are invalid. We feel that we won't have to do much in our portfolios, beyond re investing the slack in my ISA's income twice yearly, just after the two yearly peaks of spare income. And that slack won't go anywhere an HY investment, as Bagger says, the best of investing future is elsewhere.
A happy, prosperous year to you all. Few of us will regret the passing of 2020.
Some will rejoice re Brexit, I hope they are right for all our sakes, but I fear the reverse will prove true in the long term.
Plodder