Diversification ideas/help

Theyarv1

Hi,


Before I go to an IFA, i was wondering whether anyone had any good diversification ideas.



I currently have 31% in property, 48% cash, 18% in shares and 3% in NSI bonds (I know I know)

I do not currently have ANY intention of increasing my property portfolio. I intend to increase my shares portfolio but not by a huge amount. I am happy enough with the diversity within this section.



I was wondering whether you had any good ideas of how I might be able to halve my cash holdings.

The only thing I can think of is guilts/bonds (non corporate), and then investments that I would not be comfortable with, such as antiques, stamps or wine.



Thanks!:T

Voyager2002

Bonds are over-valued, and unlikely to be a good idea.

I am surprised that no-one has arrived yet to tell you to buy gold or silver, which are certainly options. Other commodities are also options: oil; foodgrains; even horse manure!

Personally, I think that shares are the only game in town at the moment. To reduce the risk posed by the wide price movements of individual shares, look at vehicles that enable you to make a single investment spread over dozens, or even hundred, of shares -- mutual funds, investment trusts, ETFs.

Theyarv1

my shares are already commodity heavy, lots of silver, bits of gold, copper and uranium

I don't want to be over exposed to shares. I can see lots of pitfalls, i absolutely don't understand how we can be above 6000 on the 100, though there doesn't seem to be many options

Loughton_Monkey

Gilts/Bonds will take a massive hit once interest rates start rising.

Don't know your age, timescales, goals. But I'd maybe consider drip feed from cash into ISA funds.

Theyarv1

29

goal is to keep up with inflation for the majority and a bit or risk with say 25% of it. Shares ISA used up. I will be putting more into defensives but that still leaves me with a lot of cash

Loughton_Monkey

At age 29, I'd be dividing up the 69% 'non property' into about 23% cash, and 46% equities/funds. And the latter, I would be 'filling' a mixture of ISA's and Pensions at as fast a rate as I could.

lvader

I'd be looking for some exposure to foreign currency investments and physical gold.

sabretoothtigger

Theyarv1 wrote: »

I don't want to be over exposed to shares. I can see lots of pitfalls, i absolutely don't understand how we can be above 6000 on the 100, though there doesn't seem to be many options

That 6000 is 20% less then the 6000 of a few years ago. Thats because its measured in pounds which buy less abroad now. not many uk stocks are uk only

Voyager2002

Theyarv1 wrote: »

my shares are already commodity heavy, lots of silver, bits of gold, copper and uranium

I don't want to be over exposed to shares. I can see lots of pitfalls, i absolutely don't understand how we can be above 6000 on the 100, though there doesn't seem to be many options

What about shares in companies that provide goods and services? What about shares traded in countries other than the UK? (Personally, I have nothing in the UK, and am mainly in Europe and North America. I plan to move more into emerging markets if and when the prices there fall a bit.)

And rather than buying individual shares, look at funds that invest in perhaps a hundred different companies to reduce your exposure to any individual risk, and to control dealing costs.

GoGas

Depending on your income needs and risk profile these Assett alloactin models from BestInvest I find quite useful. Many companies will have some variations but at least these ear a starting point and relatively easy to understand. They are updated 2- 3 times a year depending upon changing economic climate.

Full models

Simplified models

King_Weasel

Voyager2002 wrote: »

Other commodities are also options: oil; foodgrains; even horse manure!

Yes, I've just sunk a modest sum in horse manure. Might come back later for advice on whether to realise gains in cabbages or carrots.