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  • FIRST POST
    • KP24
    • By KP24 15th Jul 17, 6:21 PM
    • 10Posts
    • 1Thanks
    KP24
    My portfolio and future plans - some advice
    • #1
    • 15th Jul 17, 6:21 PM
    My portfolio and future plans - some advice 15th Jul 17 at 6:21 PM
    Hi all,

    I have around £12k invested in the following via a Stocks and shares ISA (been investing for around 4 years):

    1) Tesco
    2) Royal Mail
    3) HSBC FTSE Tracker
    4) Fundsmith Equity
    5) Scottish Mortgage Investment Trust (only held for a few months)
    6) Diageo
    7) Morrissons
    8) Vanguard LifeStrategy 60 (only held for a few weeks)

    My current profit on these overall has me at around 15% with the major winners being Fundsmith and the tracker.

    I am in the process of buying a house so won't really have much more to invest for at least 5-10 years but i am aiming to have one last hurrah and invest around £5k and then leave it at that.

    As i mentioned on another thread, i am interested in Japan and India. But with £5k to invest and nothing more for around 5-10 years, is there much point thinking too much about this?

    The portfolio i have (with the addition of the Japan and India ones whichever they end up being) will be my fixed one for the foreseeable future in terms of me investing anymore money into it. My key aims is for long term growth (i won't need to touch this money for 5-10 years) and for the portfolio to be diversified (geographically at least) so as to not put all my eggs in one basket/location.

    Any comments/thoughts? Am i going about this the wrong/right way?

    Thanks in advance!
Page 1
    • greatkingrat
    • By greatkingrat 15th Jul 17, 7:15 PM
    • 35 Posts
    • 42 Thanks
    greatkingrat
    • #2
    • 15th Jul 17, 7:15 PM
    • #2
    • 15th Jul 17, 7:15 PM
    Investing in a portfolio of individual shares, investing in a portfolio of active funds, and investing in passive tracker funds can all be valid approaches, but doing all three at the same time doesn't make much sense.
    • The Bloody Baron
    • By The Bloody Baron 15th Jul 17, 8:10 PM
    • 4 Posts
    • 1 Thanks
    The Bloody Baron
    • #3
    • 15th Jul 17, 8:10 PM
    • #3
    • 15th Jul 17, 8:10 PM
    I would put most, if not everything into a Vanguard Life strategy fund.

    Option 1
    - 80% Vanguard life strategy 80
    - 20% Vangiard global small cap index (as small companies don't feature in the life strategy funds)

    You will hold a small percentage in India and Japan using the life strategy fund.
    If you chose this option, it's best to go to Vanguard directly for the 0.22% fee. Otherwise you'll pay a platform fee using, for example, Hargreaves Lansdown.

    Option 2
    - 80% Vanguard life strategy 80
    - 10% Vanguard global small cap index
    - 10% Stewart investors Asia Pacific leaders (this is an active fund and invests in India, Singapore, Japan, Taiwan, South Korea, Australia, etc)

    Hope this helps.
    Bloody Baron
    • bostonerimus
    • By bostonerimus 15th Jul 17, 8:12 PM
    • 633 Posts
    • 328 Thanks
    bostonerimus
    • #4
    • 15th Jul 17, 8:12 PM
    • #4
    • 15th Jul 17, 8:12 PM
    Your portfolio seems to lack any strategy...."one last hurrah"? Investing is a lifetime thing.
    get into the habit of investing regularly, even if it is only small amounts. If your mortgage is so large that you don't have any spare money, then it is too large. I would sell all the individual shares and put your money in to a multi asset fund or a mix of a global equity tracker and a global bond tracker.
    Misanthrope in search of similar for mutual loathing
    • AnotherJoe
    • By AnotherJoe 15th Jul 17, 10:16 PM
    • 7,049 Posts
    • 7,518 Thanks
    AnotherJoe
    • #5
    • 15th Jul 17, 10:16 PM
    • #5
    • 15th Jul 17, 10:16 PM
    My key aims is for long term growth (i won't need to touch this money for 5-10 years) and for the portfolio to be diversified (geographically at least) so as to not put all my eggs in one basket/location.

    Any comments/thoughts? Am i going about this the wrong/right way?

    Thanks in advance!
    Originally posted by KP24
    Then sell it all and buy HMWO. Job done,
    • TomSurrey
    • By TomSurrey 16th Jul 17, 9:23 AM
    • 20 Posts
    • 16 Thanks
    TomSurrey
    • #6
    • 16th Jul 17, 9:23 AM
    • #6
    • 16th Jul 17, 9:23 AM
    Sell them and put your money in a low cost stocks and shares isa, someone like nutmeg.
    • mollycat
    • By mollycat 16th Jul 17, 10:50 AM
    • 929 Posts
    • 1,865 Thanks
    mollycat
    • #7
    • 16th Jul 17, 10:50 AM
    • #7
    • 16th Jul 17, 10:50 AM
    Sell them and put your money in a low cost stocks and shares isa, someone like nutmeg.
    Originally posted by TomSurrey
    Last time I looked Nutmeg wasn't "low cost".

    Depends what you are comparing it to I suppose!
    • badger09
    • By badger09 16th Jul 17, 10:54 AM
    • 5,112 Posts
    • 4,321 Thanks
    badger09
    • #8
    • 16th Jul 17, 10:54 AM
    • #8
    • 16th Jul 17, 10:54 AM
    Sell them and put your money in a low cost stocks and shares isa, someone like nutmeg.
    Originally posted by TomSurrey
    I wouldn't describe Nutmeg as low cost. There are many cheaper options
    • ruperts
    • By ruperts 16th Jul 17, 11:18 AM
    • 531 Posts
    • 850 Thanks
    ruperts
    • #9
    • 16th Jul 17, 11:18 AM
    • #9
    • 16th Jul 17, 11:18 AM
    If you really feel the need to have what look like random punts on things like Tesco, Diageo, Japan and India then I'd seperate them from your main portfolio (if only in your mind - it might still make sense to hold them on the same platform) and then construct a seperate, properly diversified portfolio, which could be a lot worse than a single vanguard lifestrategy or equivalent.
    • cashbackproblems
    • By cashbackproblems 16th Jul 17, 12:46 PM
    • 1,685 Posts
    • 645 Thanks
    cashbackproblems
    Investing in a portfolio of individual shares, investing in a portfolio of active funds, and investing in passive tracker funds can all be valid approaches, but doing all three at the same time doesn't make much sense.
    Originally posted by greatkingrat
    Why doesnt it make much sense? You can still own a ftse uk tracker but then individual companies for reasons of greater exposure in term sectors or strategy

    Its obsurd to say holding individual shares with funds doesnt make sense
    • bigadaj
    • By bigadaj 16th Jul 17, 4:22 PM
    • 9,573 Posts
    • 6,095 Thanks
    bigadaj
    Why doesnt it make much sense? You can still own a ftse uk tracker but then individual companies for reasons of greater exposure in term sectors or strategy

    Its obsurd to say holding individual shares with funds doesnt make sense
    Originally posted by cashbackproblems
    It may be sensible in theory but in the vast majority of real life cases it just indicates someone who has cobbled together a range of punts with little thought.

    You've slightly dented your argument immediately by stating that you can hold the ftse 100 and individual comoany shares, restricting your investments to 5% or so of global equity and a historically poorly performing index is unlikely to provide optimum performance.
    • KP24
    • By KP24 17th Jul 17, 7:28 PM
    • 10 Posts
    • 1 Thanks
    KP24
    Hi all,

    Thanks for the feedback. Having thought through this, i think i have perhaps gone for too similar funds (fundsmith/SMT and Vanguard). The original aim was to look for international exposure but these 3 are heavily weighted towards the US/UK and don't have enough around India/Japan where i would really like some exposure.

    The shares were just down to individual preferences/companies i thought will do well.

    The tracker - Because i wanted something a bit broader than just the few shares i owned.

    So i'm a bit lost really. If i ditch one of the funds, which should it be? Or should i just keep them because the performance (particularly Fundsmith) has been very good for me.

    Thanks
    • cashbackproblems
    • By cashbackproblems 18th Jul 17, 1:05 AM
    • 1,685 Posts
    • 645 Thanks
    cashbackproblems
    It may be sensible in theory but in the vast majority of real life cases it just indicates someone who has cobbled together a range of punts with little thought.

    You've slightly dented your argument immediately by stating that you can hold the ftse 100 and individual comoany shares, restricting your investments to 5% or so of global equity and a historically poorly performing index is unlikely to provide optimum performance.
    Originally posted by bigadaj
    Obviously im not saying only to hold a uk ftse tracker, its just if he wants uk exposure

    I personally have no uk funds all global
    • bostonerimus
    • By bostonerimus 18th Jul 17, 4:06 AM
    • 633 Posts
    • 328 Thanks
    bostonerimus
    The OP is a great example of someone with no strategy. What's the plan if there is a 50% drop in the market, why the fixation on Japan and India?

    I'd either put everything into VLS60 or buy a Global Equity and a Global Bond tracker and rebalance........you could even buy a little of an asian tracker, but I wouldn't bother.
    Misanthrope in search of similar for mutual loathing
    • AnotherJoe
    • By AnotherJoe 18th Jul 17, 9:09 AM
    • 7,049 Posts
    • 7,518 Thanks
    AnotherJoe
    Hi all,

    Thanks for the feedback. Having thought through this, i think i have perhaps gone for too similar funds (fundsmith/SMT and Vanguard). The original aim was to look for international exposure but these 3 are heavily weighted towards the US/UK and don't have enough around India/Japan where i would really like some exposure.

    The shares were just down to individual preferences/companies i thought will do well.

    The tracker - Because i wanted something a bit broader than just the few shares i owned.

    So i'm a bit lost really. If i ditch one of the funds, which should it be? Or should i just keep them because the performance (particularly Fundsmith) has been very good for me.

    Thanks
    Originally posted by KP24
    I don't think they are similar at all. FS is consumer, SMT is tech, Vanguard is a tracker with no conviction

    Also FS and SMT are no particularly US biased as a matter of conviction, they are biased as a matter of outcome. So it may change in future.

    To me the issue with your portfolio is (a) far too many components given its size, and (b) it's too hands on if you want to have something you can forget about, which was one of your requirements. Something that hasn't been discussed in this thread.

    Because with all those individual shares, I'd see the need to be selling and buying some of those companies over the next 5-10 years. Fair enough if you want to do that but I read your post as saying you thought this would be your portfolio for the next ten years or so and that doesn't fit with a bunch of individual company shares. That fits with a small number (might be one) of trackers, perhaps in your case either one global tracker, or three - one global, one India, one Japan. Then leave well alone

    If you picked the latter three fund option, I'd say trackers for global and Japan since they are well established, and an active fund for India.

    EDIT: or since you seem to really like FS and SMT a compromise might be
    Fundsmith
    SMT
    Global
    India
    Japan

    Dump everything else, you'll be selling them at some point anyway. Then this is a portfolio you can leave, perhaps just every couple of years rebalance it.
    Last edited by AnotherJoe; 18-07-2017 at 9:21 AM.
    • OldMusicGuy
    • By OldMusicGuy 18th Jul 17, 10:19 AM
    • 97 Posts
    • 150 Thanks
    OldMusicGuy
    The shares were just down to individual preferences/companies i thought will do well.
    Originally posted by KP24
    This is the flaw in your strategy IMO. You are just selecting stuff randomly here and with a small portfolio that is putting much higher risk in your portfolio. I am not an expert investor but I am someone that understands finance and I do not have the time or knowledge to analyse the financials of individual companies to make informed stock picks. If you are doing it just on "individual preference" you might as well just throw darts at a board. Fun, but not what I would want to base my investment decisions on.

    Isn't the answer in the performance of your portfolio so far? Fundsmith and the tracker have done best. Why not spread your risk by selecting multi-asset passive funds that have the balance of investments in the sectors/regions you want?

    What I have done is split my portfolio (which is pretty big btw) between actively managed and passive funds. Rather than pick my own stocks, I have invested in a managed fund which is focused on dividend paying stocks. I am paying higher charges for that fund but my logic is I am paying the experts to do the stock picking.
    Last edited by OldMusicGuy; 18-07-2017 at 10:22 AM.
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