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I would certainly expect there to be Some equity investment in a pot that large. Thru ITs as suggested, or some solid equity income funds.
But would suggest holding cash deposits as well. Some fixed rate bonds maturing in different years. And do take care to put some in the wife's name so as to use her tax allowance instead of just the husbands.0 -
But would suggest holding cash deposits as well. Some fixed rate bonds maturing in different years. And do take care to put some in the wife's name so as to use her tax allowance instead of just the husbands.
Pretty much our plan. We'll both have NS&I linkers and my wife will have various terms of cash holdings, a gilt ladder (if/when they regain sanity) and equity holdings, probably via ITs or trackers.
We need our money to last 35+ years, and you can't do that without diverse holdings that includes a decent slug of equities.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
enjoy life, they could both be dead tommorow !
Yes, what could possibly go wrong.
http://en.wikipedia.org/wiki/The_Lotus_EaterI am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
Then you'd guarantee a very large loss of capital if there's an income need here.
Investments can be expected to deliver perhaps 4-6% of capital as income, more than that if there's deliberate capital drawdown. Inflation at 3-4% and that's perhaps 10% capital loss a year less interest rate unless investments are used. Perhaps fifteen years until the money has run out at 6% income taking.
By contrast, now is a relatively good time to be buying equities. Lots of price drops already so the downside/upside risk in many markets is pretty strongly in favour of buying, though gradually to avoid shocks. Less good for high quality corporate or government bonds in Europe, US and Japan though.
But we still don't know the objectives or risk tolerance here, so much of this is currently moot.
I agree with the last paragraph. But otherwise this is pretty much the stock answer from those who support equities as the bedrock of any portfolio. It largely ignores the vagaries of the markets in the medium (and perhaps long) term, the ever-increasing instability of the world economy, and the fact that the historical-trend based 'equities are best' argument is surely now at best wracked with uncertainty, and arguably completely shot.No-one would remember the Good Samaritan if he'd only had good intentions. He had money as well.
The problem with socialism is that eventually you run out of other people's money.
Margaret Thatcher0 -
GeorgeHowell wrote: »It largely ignores the vagaries of the markets in the medium (and perhaps long) term
No, it doesn't ignore that at all.the fact that the historical-trend based 'equities are best' argument is surely now at best wracked with uncertainty, and arguably completely shot.
"Arguably"? Who's making that argument and where?
Of course, equities are just one asset class, and the circumstances where they should be 100% of a portfolio are few and far between. However, the same applies to being 100% in cash, gold or gilts.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
gadgetmind wrote: »No, it doesn't ignore that at all.
I don't see the word "vagary" or a synonym of it in the post, so yes it does ignore it.gadgetmind wrote: »"Arguably"? Who's making that argument and where?
I am, here.No-one would remember the Good Samaritan if he'd only had good intentions. He had money as well.
The problem with socialism is that eventually you run out of other people's money.
Margaret Thatcher0 -
GeorgeHowell wrote: »I don't see the word "vagary" or a synonym of it in the post, so yes it does ignore it.
Perhaps you need to explain what you mean by "vagaries" and why you think that it's being ignored and by who?I am, here.
No, you're making statements. If you want to back these up with well-grounded arguments, then please go ahead.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
BTW, the best tool that I know of to play "what if" with different portfolios is firecalc.
http://firecalc.com/
It's got a US flavour but the principles work anywhere.
Try 1 month treasuries as a cash equivalent and see what drawdown you can mange from a portfolio of cash and bonds. Now try adding equities.
Note that Firecalc uses data going back to 1871. Two world wars, one great depression, loads of crashes, loads of depressions, and the odd credit crunch.
Enough vagaries for you?I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
OK, I just did a few runs. I wound fees up to 0.5%, used a 250k portfolio with 12.5k drawdown per annum for 30 years.
75% equities gives a 68.5% success rate.
0% is only 18.9%.
Maybe those who would eschew equities can find a better portfolio using treasuries, bonds and cash?I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0
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