Any opinions on my investment strategy

Linton wrote: »

covers much of the age related allowance space, but doesnt provide anything for the Mrs.

If it were only possible to share allowances, much of my juggling (and it seems yours) could be avoided.

I've never managed to persuade my wife to re-enter the world of gainful employment, so her pension income will be only a few £k pa, mostly as a result of us chipping £240pcm into a pension for her over recent years. Fortunately, we can then stack dividend income onto this, but need to get as much as possible wrapped as quickly as we can.

Rather savagely, exactly the opposite is afflicting the gadgetfolio right now, and we're going to be accumulating unwrapped assets for the next few years.

While I accept this is a high-quality problem, it is taxing the old brain cells!

MrInvestor wrote: »

Gold could save us all! Just look at how much India and China have bought up in previous years. Doubt they'll be getting rid of it in a hurry!!

Well, sensible countries might be looking to reduce their holdings with the price so high; it's only losers like Gordon Brown who flog it cheap at the bottom of the market!

andyjwill wrote: »

Do you think a higher bond holding wqould be preferable.

More bonds will reduce volatility but will also reduce long-term gains. If you buy a copy of Smarter Investing, there are pages showing the historical performance of various portfolios over time and others that show chances of running out of money given various drawdown rates, time periods, and portfolio structures.

A really rough rule of thumb is that 4% is pretty safe but 5% less so. For instance, I use firecalc to model a 5.3% drawdown (this was my projected GAD limit a year ago, how things change!) and it gave only a 48.5% chance of lasting for 30 years *but* when I told firecalc that state pensions would be hitting after 12 years of retirement (and thus drawdown dropping), this rose to 100%. In contrast, a 4% drawdown had an 86% success rate even without SP. Note it's a while since I played with firecalc and I don't recall any way to set equity/bond split.

The final size of your non-cash portfolio would seem to be £215k, so your desired drawdown is 4.6%. Whether this is sustainable or not depends on many factors outside your control, but also on one significant factor that is in your control, which is whether you can "take it easy" on your equities during a dip, and even sell some bonds to buy more equities. What lets you do this is a multi-year cash buffer and/or other sources of income and/or the ability to tighten your belt (run cars longer?, fewer holidays?) during the lean years.

This is why I didn't straight away start looking at which funds to use: it's far more important to get the money into the right wrappers, in the right names, and with the income in the right category (income, dividends, capital gains) before worrying too much about how to generate the growth/income.

[edit}
I just checked and firecalc defaults to 75% equities, 25% bonds, and 0.18% fees. Of course, fees are higher in the UK, and much higher for actively managed funds. Plenty to tweak, including what your spending can drop to in lean years, Enjoy!

Firecalc is very US-oriented, but the principles are transferable.

To add a bit to Gadgetmind's post: when allocating money to wrappers its a very good idea to keep the bonds in the same ISA'd place as the equity funds. You can then easily switch between the two as prices change keeping the relative proportions constant. In this way you are buying when prices are low and selling high.

If the types of investment are separated, balancing will involve the hassles of ISA transfers.

Glen_Clark wrote: »

All the talk is of funds, but with £300k why not just buy shares directly?
Instead of paying someone else to buy and hold shares for you, you can just as easily do it yourself for nothing.

Two reasons -
If you are investing in the UK it can be worthwhile to buy shares directly, but buying a wide range to give you a balanced portfolio and keeping the balance over time can be a hassle. Also, if you were investing specifically in something like small companies, or growth/value stocks significant knowledge and information would be required.

If you are not investing in the UK, as the OP largely isnt, buying foreign shares can be difficult/expensive and require knowledge that the private investor would find difficult to obtain.

Additional thought - the fund manager can buy and sell shares cheaper than the private investor.