Building a Portfolio

sva19

When totaling up a persons portfolio of shares , funds, cash property etc.

Should the person normal savings cash and normal House property be part of the overall portfolio, or should those 2 item not be included?

dunstonh

Should the person normal savings cash and normal House property be part of the overall portfolio, or should those 2 item not be included?

Up to you.

Personally, I dont include the residential property as you always need somewhere to live. Your children or grandchildren may benefit but you most likely wont.

As for cash, it depends on how you look at your portfolio. Some people include their cash and treat the whole pot as the portfolio. Others only include their risk based investments and look at that as the portfolio and leave off cash. It doesnt matter which you do.

sva19

Thanks, that's helpful.

Another question is where can I get info on the % of asset allocation based ?

Also what is the general norm % allocation on a diversified portfolio?

jon3001

sva19 wrote: »

Should the person normal savings cash and normal House property be part of the overall portfolio, or should those 2 item not be included?

I'd say leave the primary residence out. Maybe if you're planning to downside or somehow release the equity you could factor that equity in.

As far as savings go - I don't include any cash for planned expenditure; even if its for replacing my car in a few years. I do include any emergency savings - hopefully I won't have to touch them .

A lot of allocations will have split between 'safer' investments (e.g. bonds) and riskier investments (e.g. stocks). I lump the cash in the safer portion which means I can increase my exposure to riskier investments compared to if I had left the cash out.

You should plan it so that you're never forced to touch the riskier investments since you have adequate cash reserves.

bendix

sva19 wrote: »

Thanks, that's helpful.

Another question is where can I get info on the % of asset allocation based ?

Also what is the general norm % allocation on a diversified portfolio?

There is no norm. It depends on your individual circumstances, the most important of which will be your age, attitude to risk and investment objectives.

A 60 year old who has built an investment pot and wants to use it in retirement in 5 years will have a very different ideal asset allocation to, say, a 25 year old with a forty year investment horizon.

sva19

I am a 38 yr old male, plan to retire at say 60. My attitude to risk is go for growth in next 20 yrs, I would just like some simple ideas for starters and then can take it for there in thers of portfolio shape?

Lokolo

sva19 wrote: »

I am a 38 yr old male, plan to retire at say 60. My attitude to risk is go for growth in next 20 yrs, I would just like some simple ideas for starters and then can take it for there in thers of portfolio shape?

https://www.fidelity.co.uk/investor/guidance-planning/plan-portfolio/myplan-portfolio-quickstart.page?

Do this.

Jonbvn

Lokolo wrote: »

https://www.fidelity.co.uk/investor/guidance-planning/plan-portfolio/myplan-portfolio-quickstart.page?

Do this.

Although you should be aware that a lot of the funds that are preselected by this planning tool are fidelity managed (naturally). Therefore, use this tool for guidance only.

Lokolo

Jonbvn wrote: »

Although you should be aware that a lot of the funds that are preselected by this planning tool are fidelity managed (naturally). Therefore, use this tool for guidance only.

Oh yes do not use the tool to pick your funds for you! Just for a decent allocation guideline!

bendix

sva19 wrote: »

I am a 38 yr old male, plan to retire at say 60. My attitude to risk is go for growth in next 20 yrs, I would just like some simple ideas for starters and then can take it for there in thers of portfolio shape?

In that case, you can be aggressive.

It's your call of course, but if I were in your shoes I would be having a balance of around 20% bonds and gilts, 10% property related funds and 70% shares.

In the shares I would have a good exposure to resources stocks and commodities.

Geographic allocation would be around 30% UK, 15% Europe (including Russia), 15% North America (including canada), 35% Emerging markets (including Latin America, India, China, SEA etc) and the remaining 5% in areas like Australia (to help with the resources play) and Japan.

But that's just me.

Lokolo

I would only put 10% in Bonds and Gilts ^^ ... but thats just me