BoE Votes to keep interest rates at 0.5%

Thrugelmir

chucknorris wrote: »

Thanks, I was incorrectly guessing that the 'discussion' might have been the other way around (no partcular reason though, hence my question). I agree diversity can be good but of course if something is stand out value it is worth a heavier weighting. Currently my (excl my wife's) assets are:

property 66%
cash 20%
pension 9%
shares 5%

I'm buying additional pension at the moment in about 3 years time those percentages will change to:

property 59% (assuming no/minimal capital growth)
cash 20%
pension 15%
shares 6%

With the poor return on cash and the stock market recently up I must admit I have been thinking about buying another house. I did look at freehold ground rents but I can see myself getting frustrated by having to continually chase slow paying leaseholders.

If I did buy another property the percentages (in 3 year's time) would become:

property 62%
cash 17%
pension 15%
shares 6%

Which isn't really adressing the issue, which is that I am light in shares, the problem is that I see more value in property than shares at the moment (with a long term view). But I am trying to resist the urge to buy more property, simply from a diversity point of view.

As I see it my immeddiate options are:

Invest in a freehold ground rent investment
Buy more shares
Buy another house (50/50 with my wife)
Or a combination of the above
We are also considering a (small scale) move into property development

That's a heavy weighting in an individual sector. That's reliant on the UK economy performing strongly to produce good returns.

Personally I would opt for more shares through an ISA. International ones at that. To broaden your exposure.

Best portfolios have correlation. If one sector fall , another rises. The aim to constantly being ahead of the game. Rather than taking punts on one sector alone. Which can produce good profits or correspondingly bad losses.

chucknorris

Thrugelmir wrote: »

That's a heavy weighting in an individual sector. That's reliant on the UK economy performing strongly to produce good returns.

Personally I would opt for more shares through an ISA. International ones at that. To broaden your exposure.

Best portfolios have correlation. If one sector fall , another rises. The aim to constantly being ahead of the game. Rather than taking punts on one sector alone. Which can produce good profits or correspondingly bad losses.

Of course it is a heavy weighting! As I said above, if something is stand out value it is worth investing more, and in the early 90's (when most of it was invested) property was certainly a stand out value. I thought so at the time and time has certainly proved me right!

Produce good returns? It virtually made me a multi-millionaire! (time did the rest). Did your early 90's (or subsequent) investments perform as well?

Thrugelmir

chucknorris wrote: »

Produce good returns? It virtually made me a multi-millionaire! (time did the rest). Did your early 90's (or subsequent) investments perform as well?

Healthy enough. Been a fan of Buffet for years.

Prior to that Hanson & White.

You can only surf a wave for so long. Everything moves in cycles.

chucknorris

Thrugelmir wrote: »

You can only surf a wave for so long. Everything moves in cycles.

But when you start surfing from the bottom of the previous recession it helps with the next downturn.

C_Mababejive

Isnt it amazing that there is not a single person in the UK deemed suitable to take up the role of the new BoE manager and so we have to pander to the whims of some debonair Canadian?

Thrugelmir

chucknorris wrote: »

But when you start surfing from the bottom of the previous recession it helps with the next downturn.

Fable of the hare and the tortoise. I prefer the latter.

What's you net worth if you liquidated your portfolio though? After tax and selling fees.

Personally if I had gross assets of £2 million. I would concerned if 60%. Were held in say just 4 shares Vodaphone, BP, HSBC and Tesco.

Much prefer having investments in around 600 holdings. That I rarely trade.

chucknorris

Thrugelmir wrote: »

Fable of the hare and the tortoise. I prefer the latter.

What's you net worth if you liquidated your portfolio though? After tax and selling fees.

Personally if I had gross assets of £2 million. I would concerned if 60%. Were held in say just 4 shares Vodaphone, BP, HSBC and Tesco.

Much prefer having investments in around 600 holdings. That I rarely trade.

That is the liquidated value, it is the only value that makes sense to me. The thing about property (as you no doubt know) is that you have to wait until the right time (which can be some time away) to sell. If we were on the upper part of the cycle I would be selling and at least balancing my portfolio, but now is not the right time to do that. Not just because of where we are in the economic cycle but also because interest rates are also so low resulting in high rental profit.