Statement of intent

After much deliberation I have finally sorted the funds for our S&S ISAs to take us through the next year, during which we should clear the mortgage and then rebuild our cash savings. Thereafter we'll look to increase S&S ISA contributions to the maximum allowed on top of the Cash ISA limits.

Decisions:
1) Stop contributions to Neptune Russia & Greater Russian due to the fall in the Ruble and losses on this fund. Not selling though due to this crystallizing losses, so hope it will recover in a couple of years.
2) Threadneedle Latin American - reduce to 13.3% of monthly investment as we hold units in this already
3) Investec UK Smaller Co - reduce to 13.3% of monthly investment as we hold units in this already
4) Blackrock UK Absolute Alpha - new fund at 20% of monthly investment
5) M&G International Sovereign Bond - new fund at 20% of monthly investment
6) First State Asia Pacific Leaders - new fund at 16.7% of monthly investment
7) Neptune US Opportunities - new fund at 16.7% of monthly investment

The basis (hope!) is that this will be a balance towards growth with some capital protection from 4 & 5, recognising we intend to start Cash ISA contributions to full allowance from March 2010 and each year afterwards. We'll also have other savings each month for regular costs (and thus some can go in fixed/regular savings schemes) and our pensions are separate from this. So aiming to position for some growth above savings rates etc over the 5yr term to take us to 49 allowing review then for the tranistion 50-60 to move investment balance to a lower risk profile as appropriate.

I would anticipate need to get some exposure to commercial property funds in 2010 once we can consider increased monthly contributions to the S&S ISAs, plus others to diversify the balance in the investments away from the High Risk ones we have.

Anyway, that's the plan now, just need to look at how it all works out over the next year or so. I'll try to give some ideas of progress here whilst heading to the MFD. (No idea where I'll note progress thereafter though).

gallygirl wrote: »

:T I'm in it for 25% so we can fail/succeed together :T. This is new to you I believe - which fills me with confidence as I know you'll have done your research . I only swapped into this last year as it wasn't available before and I had done a fair amount of research into the sector.

Gallygirl, yes I've been reading around the topics but see that on TrustNet there's an article noting problems for Asia this year, but I "knew" this ahead of the decision. Hopefully we'll be getting the units at good value now with a recovery boosting them in mid-2010 on?

I'm thinking of moving out of gilts & corporate bonds into 100% cash at the moment 'cos the bond market seems so volatile. I went into it as a safe haven and it's turning into a bubble and tbh I'm out of my debth so I'm likely to get burned.

Well done on your progress and your interesting posts:D

SMF2
Thanks. Yes, I was "umming and ahhing" about getting into bonds or not, but opted for Sovereign bonds as I think they should be safer than corporate and this may well represent the very long term underpinning of the S&S ISA into which we'll move (plus Gilts) over future years. As noted, the focus here is a 5yr horzon, but monitor throughout. I agree there is risk of the present growth in bond funds' value dropping back since the upswing from October; hope the pound-averaging of monthly investments will mitigate the losses which may occur initially in August/September this year especially over a 5-15yr horizon?

I'm pondering whether to subscribe to MoneyObserver (£1 for three issues and subscription gives a good discount thereafter) in addition to the web sites I look at but need to be more structured in my research and updating.

NatWest has now announced the new interest rate for their offset product, dropping from 4.2% to 4.0% from Monday, so they have recently very much limited the BoE cuts that have been passed on to customers.

I haven't looked at other offers, but guess this has to be one of the higher rates on offset these days equivalent to BoE BR+2.5%? Fortunately our effective rate is, today, 0.82% on the mortgage.

Media still seem to be swinging from inflation to deflation calls on the future economic position; personally I think inflation is more likely, say Q2 2010 onwards and that interest rates will also rise at that time - just another incentive to hit our MF date :rolleyes: