How to create or modify a diversified portfolio

Legacy_user

I am looking for more tips on creating or modifying a diversified portfolio.

How do you create or modify your portfolio in this current financial climate?

Thanks

System

How many funds do you hold in your portfolio and in which sectors?

AndyT678

Well the simple answer is buy a single multi asset fund that has an allocation that suits you...

Thrugelmir

32 IT's.

Aim, Property, Emerging Markets, Bonds, Private equity, Small Companies, Utilities, Commodities, P2P, Europe.

bigfreddiel

Thrugelmir wrote: »

32 IT's.

Aim, Property, Emerging Markets, Bonds, Private equity, Small Companies, Utilities, Commodities, P2P, Europe.

Basically with that many, you've just created your own tracker albeit a very expensive one.

Cheers fj

bigfreddiel

Use the KISS method.

You can create a very effective portfolio with four or five funds.

The funds can be ETFs, ITs or UTd, just pick low cost ones, no more than about a half percent.

Then you choose the mix thst suits your risk profile.

I go for 60% equities split equally global and UK. 20% gilts and 20% property again global and uk split.

So that's five funds.

Rebalance once a year, reinvest divis, and that's about it.

Tweak the percentages to suit yourself, add two or three mor funds if you think it will help. It probably won't!

Don't be put off by 'experts' that say you need more funds or more diversification.

Or

You could just buy a vanguard Lifestrategy 60% fund.

Cheers and good luck fj

enthusiasticsaver

Vanguard Lifestrategy 60. Works for me.

Thrugelmir

bigfreddiel wrote: »

Basically with that many, you've just created your own tracker albeit a very expensive one.

Cheers fj

There is a plan behind the madness that has served me well for decades.

Nor do I track the market. My investing style is contrarian.

Linton

I dont believe that the current climate has anything to do with anything.

My way is to decide on an allocation in terms of asset type, geography, company size, industry sector, defensive/growth, income/accumulation and buy funds to match that. In practice it's more of an iteration because matching everything in parallel is too difficult.