Nearly 50... asset allocation and other puzzles

kidmugsy

Thomsk wrote: »

my wife hasn't been in paid employment for the last 17 years. She will have around 24 years of qualifying NI contributions (or equivalent from Child Benefit) and I'll have 30 years by the time I retire.

I'd look at getting those figures up to 35 years. For instance, could your wife take up some undemanding self-employment and make the couple-of-quid a week NI contributions accordingly?

Thomsk wrote: »

My SIPP, ...; 10% is stuck in Templeton Emerging Markets investment trust, having lost quite a bit, so I'm reluctant to sell it yet.

Lousy logic: the shares neither know nor care what price you paid for them. There is no need to spare their feelings.

Thrugelmir

Thomsk wrote: »

Can you recommend any sources of information or good commentators on that sector?

Read the Investors Chronicle.

purch

Thomsk wrote: »

10% is stuck in Templeton Emerging Markets investment trust, having lost quite a bit, so I'm reluctant to sell it yet.

From an investing point of view that is not really the best way to look at it.

When investing you should always look at what it is worth today, and then decide what is the best way to gain the best return.

Not liquidating an investment just because it has lost value, and just hoping it will regain that value is not effective or sensible.

If you invested £10K and it's now worth £5K, you should look at it as £5K and decide what is the best way to maximise returns on that amount.

You should do that for your entire portfolio, maybe not daily or weekly, but as frequently as possible.

Thomsk

purch wrote: »

From an investing point of view that is not really the best way to look at it.

When investing you should always look at what it is worth today, and then decide what is the best way to gain the best return.

You are quite right, of course. I have been slowly moving away from expensive funds (or in the case of investment trusts, those with significant ongoing charges like Templeton) and although I had starting selling these shares and moving elsewhere, I didn't get out quite soon enough.

Obviously doing so now would crystallise my loss, but the price has been coming back slowly and overall I'm now only down 13%, compared to 20% when they bottomed out. Now I understand what I should have done to take advantage of that recovery and just need to convince myself that it's not too late to still get something out of it now.

atush

You could of course, switch to an equiv trust with lower charges in t he same (ie emerging) market. I am thinking they would have roughly the same up and downside risk.

jamesd

Thomsk wrote: »

Obviously doing so now would crystallise my loss, but the price has been coming back slowly and overall I'm now only down 13%, compared to 20% when they bottomed out. Now I understand what I should have done to take advantage of that recovery and just need to convince myself that it's not too late to still get something out of it now.

Hmm. You know that prices dropped a lot. You know that prices have been increasing and might know that it's in part because of a broader switch to emerging markets. So you're going to sell while the sale is on, instead of buying?

I did my selling before the low. I'm now considering whether and when to buy more to exploit current prices.

You missed the main time to sell. Now your reason to sell should really be only if you want to reduce your overall proportion of emerging markets holdings of want to change how you get that exposure.

The question to ask is the one implied by purch: do you think that the prices today are inexpensive enough to make it a good idea to buy more or do you think that there are sufficiently large additional drops pending to make selling now a good idea?

Thomsk

jamesd wrote: »

Hmm. You know that prices dropped a lot. You know that prices have been increasing and might know that it's in part because of a broader switch to emerging markets. So you're going to sell while the sale is on, instead of buying?

No, I should have expressed myself more clearly. It seems unlikely that further falls would be severe enough to sell immediately, so I'm probably either going to do nothing (seems like the consensus here would be against that ), or buy more Templeton, or buy another emerging market IT or tracker (thanks to atush for that suggestion).

There seem to be a number of indices that I'll have to look into, because I'm conscious that not all emerging markets are the same.

jamesd

Yes, not all the same. One big difference is which definition of emerging markets is used. Korea is in the developed markets version for one, emerging for the other. I think there's now at least one more difference between the two but haven't checked.