Portfolio for a novice

cwrw

Sucking in the facts - still re-evaluating. I still need to make at least 200% within 10 years or so. Risk is relative. One investment needs to be 10,000k and relatively stable (100 equity with minimal running costs -passive index type? Blackrock 100 nurs 11 -- similar to vanguard lifestrategy 100%), the other investment more aggressive yet low running costs. Would a ftse 250 + ftse all share fit this bill? ANY SUGGESTIONS WELCOME to get me where I'm going in 10 - 15 years. CHEERS!

marathonic

cwrw wrote: »

Sucking in the facts - still re-evaluating. I still need to make at least 200% within 10 years or so. Risk is relative. One investment needs to be 10,000k and relatively stable (100 equity with minimal running costs -passive index type? Blackrock 100 nurs 11 -- similar to vanguard lifestrategy 100%), the other investment more aggressive yet low running costs. Would a ftse 250 + ftse all share fit this bill? ANY SUGGESTIONS WELCOME to get me where I'm going in 10 - 15 years. CHEERS!

I think you're being overly optimistic to expect 200% within 10 years, especially when you talk about needing a relatively stable investment. This would require a return of 13% per year from a starting point that has already witnessed some recent gains that are way above average returns. For comparison, most prudent investors would use an expected return of 7% (+/- 2%). The higher end of this, 9%, would see a 117% return over 10 years (and you should be delighted if you achieve it).

When you read about various websites' investment strategies, do remember that there are hundreds of such websites out there - and the ones that happen, through mostly luck, to achieve good long-term results are the ones that are highly promoted. This doesn't mean their strategies will work into the future.

In fact, there are some website owners that own multiple websites promoting various strategies. They email newsletters, usually free, to subscribers for each of their websites. After a few years, they forget about the websites promoting strategies that didn't work out and start promoting, and charging for, the website with the strategy that worked.

With this in mind, take quoted performances of various strategies with a pinch of salt and, instead, come up with your own strategy - and if your own strategy expects long term returns of 13% p/a, you need to re-evaluate your expectations. It may happen if you're lucky - but you shouldn't, in any way, expect it to.

Sobryma

Even if you go 100% equity which seems risky, you need to be diversified. Late nineties tech co's were all the rage but that fell apart, also 2000-2010 weren't actually that hot for equities.

You need to keep things balanced even for a growth fund.

cwrw

With this in mind, take quoted performances of various strategies with a pinch of salt and, instead, come up with your own strategy - and if your own strategy expects long term returns of 13% p/a, you need to re-evaluate your expectations. It may happen if you're lucky - but you shouldn't, in any way, expect it to.[/QUOTE]

Re-evaluating expectations...bump...oh dear! I will look into DIY passive index funds or vanguard 80 as a mainstay, and look into a few shares every now and then during the next 10-15 years (shares for 15% of investment).
A few issues for the complete novice as I am are - when you have a fund you do not have to take any of the dealing costs of the fund (when it buys and sells for itself), but if i were to take trackers for lets say ftse100 , ftse 250 and others I would incur costs every time I was re-balancing (buying and selling more stock in these). Would this be true, and would this be viable + what would be the most affordable platform to buy and sell shares and stocks if you were looking at a small value portfolio with approximately 3-6 dealings a year? GETTING THERE VERY SLOWLY!

Linton

Agree with the others that your ambitions are unrealistic. You will see possible returns of the order of magnitude you would like in "classic" literature dating perhaps from the 1970s/1980s. At that time inflation was very much higher than now and so the data is not comparable. I agree with marathonics number of around 7%, though even that is too high for a safe prediction in my view.

In order to achieve a very high return you need to invest in things that are capable of providing such a return. A middle of the road large cap global index fund portfolio is most unlikely to be appropriate - you need to look at the wilder areas such as small cap or Emerging Markets which have done very well over the past 15 years. Or even better, choose the new areas which will provide high returns in the next 15 years, if you can! However with higher return comes higher risk. The next major crash could lose you 50% rather than perhaps 30% with your portfolios.

On dealing costs - yes rebalancing will give rise to extra costs. Therefore dont do it too often, and only do it when £Ks are involved. I would say once a year and only adjusting your, say, 2 or 3 your most out of kilter funds would be adequate until you get into a £50K+ portfolio. The better way to rebalance is to adjust where your new payments go on the basis of the desired total allocation.

cwrw

I get the gist of it. However I remain unclear regarding the payment bit - if you sign up for index trackers etc the overviews state that payments are eg £50 minimum per month. Is this a binding condition on the holding of such funds, or can you stop payments and re-direct to other funds or cash within the given platform? THANKS TO ALL AS I AM LEARNING ON EVERY REPLY

masonic

cwrw wrote: »

Is this a binding condition on the holding of such funds, or can you stop payments and re-direct to other funds or cash within the given platform?

No, it is just the minimum non-zero amount you can set up. There is no commitment.

richyg

It just means that each purchase you make needs to be £50 or more (or nothing)
You can turn them on or off each month as you see fit fund by fund.

Your monthly or one off bank contribution to the platform is completely separate and just increases the cash balance.

cwrw

Does anyone have anything to say about IWEB as a dealing platform for possibly 1 fund and around 4 - 6 share dealings a year. It looks basic but very affordable?

ColdIron

cwrw wrote: »

Does anyone have anything to say about IWEB as a dealing platform for possibly 1 fund and around 4 - 6 share dealings a year. It looks basic but very affordable?

What was wrong with the thread that Snowman pointed you at? It had 40 posts, rather than duplicate them all over again it is probably better that you ask some specific questions that were not covered there