how many funds do I need

Sony_smartphone

Hi Guys,, I have I was looking for some advice and opinions,, I have invested in the past using a financial advisor,,, whilst with the F.A he choose 3 different funds,, to try and cut down costs I was going to try self investing using the same AXA platform, the 3 funds that I used in the past were for income but now I want to use them to grow my investment (hopefully),, I was wondering is there a recommended number of funds to invest in,, ie 3 like I did in the past or could I expand this to maybe 5 or 6 different , I would be investing for accumulation and not income,,, I am happy to leave these for 5 years or more,, I have 80k to invest .I will still have income over the investment period and have about 35k in cash for lives little emergencies, ,, all opions welcome,,,, thanks:A

colsten

The number of funds is not really important. That's not how you want to invest. What you need to focus on is the make-up of your total portfolio, which needs to be balanced, and - crucially - match your risk profile.

If you had a portfolio created by an IFA, it would have been balanced and appropriate for your risk level at the outset. It may have changed over time if the portfolio didn't get rebalanced, and/or if your risk appetite changed.

If your initial investment was set up by an FA without the I at the front, there is a risk that you were just sold what paid the FA most.

You could either read up about creating a portfolio that suits your requirements (taking into account your existing investments), or, as you have £80K to invest, hire a good IFA to do a proper review and to give you professional advice.

panter

Which funds are you invested in at the moment, and what are you paying by way of fund, platform and/or advisor charges?

Sam_J12

I would invest in a cheap tracker fund. Personally I would choose an S&P 500 tracker fund such as the Vanguard or Ishares ETF. It is highly diversified and this market has historically performed very well over a long period of time and I do not see why it will not continue to perform extremely well in the future. More than this fund alone is not required in my opinion.

bigfreddiel

Sam_J12 wrote: »

I would invest in a cheap tracker fund. Personally I would choose an S&P 500 tracker fund such as the Vanguard or Ishares ETF. It is highly diversified and this market has historically performed very well over a long period of time and I do not see why it will not continue to perform extremely well in the future. More than this fund alone is not required in my opinion.

Well in my opinion you're only half right, or half wrong depending on your outlook.
Tracker fund is good, but just one is very risky, you need to balance this with other things like a gilts tracker, and or a property tracker, and that's all you need do.

You could just pick a Vanguard Lifestrategy fund instead which in the long term, 5 years min in my opinion.

Cheers fj

Sony_smartphone

Thanks for the feedback guys,, in answer to your points,,, my F.A was independent and he did the the full research and risk profiles,, the 3 funds he choose were,,
1, F&C MM NAVIGATOR distribution c inc
2, INVESCO PERPETUAL distribution z inc
3, PREMIER MULTI ASSET monthly inc c
Fund charges are 1.42,,,,1.47 and 0.82%,,,Axa platform charge is 0.04% and I no longer use the service of an IFA,,,, we parted on good terms,, my attitude to risk and risk profile hasnt changed,, the only thing changed is that I, m no longer really interested in having monthly or quarterly income ,, im more interested in growth over the next 5 years or so,, I take on board completely that its not the amount of funds but the quality and compatibly of the funds to my profile and as I've said my attitudes and profile havent changed,, I have did some fund research on Axa website and there do seem to be funds that suit me and they're looking a little better than my existing 3 funds,,
My funds are pretty diversified I think,, I was wondering if it would benifit me anyway to add another 2 or 3 to them,,,, regarding seeking further professional financial advice,
I dont mind paying for it I just dont want to have ongoing advisor changes, , Are there any that would just do "execution only" I'm not sure if that's the right term,, forgive me,,
!, Axa have some ready made portfolios and as a newbe I've been tempted, , but I keep coming back to the 3 funds that I already have,, and say to myself "if it aint broke dont fix it",,,,but then again,, why not ?,,,,, help !!!,,,,, and thanks again for your opinions and advice

bigadaj

It might pay for you to do some reading and research, a copy of Tim hales smarter investing would be a good start and review of the minevatir website

The funds you have are all income generating and uk biased, so there's a lack of variety and risk spreading.

How much money do you have invested, it is possible to get an ifa on a transactional only basis but they will probably have a high minimum fee level if there's no ongoing work or relationship.

The platform charge at Axa looks very low, are you sure that is the whole cost and not just one part of it?

westy22

bigadaj wrote: »

It might pay for you to do some reading and research, a copy of Tim hales smarter investing would be a good start and review of the [STRIKE]minevatir[/STRIKE] monevator website

Fixed that for you.

Sam_J12

bigfreddiel wrote: »

Well in my opinion you're only half right, or half wrong depending on your outlook.
Tracker fund is good, but just one is very risky, you need to balance this with other things like a gilts tracker, and or a property tracker, and that's all you need do.

You could just pick a Vanguard Lifestrategy fund instead which in the long term, 5 years min in my opinion.

Cheers fj

I've never really understood this argument. If you are investing for the long term, why would you want gilts/bonds in your portfolio? This will only reduce your long term expected return for the benefit of less volatility - but if you are investing for the long term less volatility has no benefit. Also, why invest in property simply for the sake of saying you are "diversifying" - I don't see how property will reduce risk or increase long term returns. The S&P 500 is plenty diversified and is not in the slightest way risky in the long term.

chucknorris

Sam_J12 wrote: »

I've never really understood this argument. If you are investing for the long term, why would you want gilts/bonds in your portfolio? This will only reduce your long term expected return for the benefit of less volatility - but if you are investing for the long term less volatility has no benefit. Also, why invest in property simply for the sake of saying you are "diversifying" - I don't see how property will reduce risk or increase long term returns. The S&P 500 is plenty diversified and is not in the slightest way risky in the long term.

I'm with you on this one (about the bonds/gilts), but I think it depends upon your attitude to risk, mine sounds similar to yours. I'm 57 now, in about 8-10 years time I will start to have something outside of equities. I have property now, but I'll be selling by then, property has been very good for me/us, but I invested back in the 90's, so I have enjoyed a good ride. We may keep a couple of properties, I'm trying keeping an open mind on that, I do like the way they perform, but after 25 years of being a landlord I think I've had my fill of it now.

Looking ahead to my mid 60's, my outline plan is to be mainly in equities, but also have 3 to 5 years of spending in bonds/similar, to avoid having to cash equities in a downturn. We will also have about £27k of pension (final salary and state). As I get even older (hopefully I'll still be around and healthy) I'll probably skew my portfolio more away from equities.

EDIT: I forgot to add, for me it isn't just about the potential growth, the tax treatment of dividend income is much more advantageous than that of bonds/savings interest.

AlanP_2

Personally I wouldn't put all my equity eggs in one basket i.e. a single country tracker fund such as the S&P 500 and would look to at least spread the geographic coverage.

The S&P has done well and will probably continue to do well over the long term but why take the risk?