House Saving Portfolio

bottleandahalf

Hi folks
I am to start new job tomorrow and am looking to start a new portfolio to save for a house in the next 7-10 years.

I am 39 and will be able to save around £800 per month.
I plan to split this 50/50 in cash and S+S ISA.

For the cash, I plan to put in Nationwide Flex regular saver and reassess every year.

For the S+S, I plan to put away £400 in the following funds/ IT's. I want to split the 50% growth and 50% value, 100% in equities (no bonds as that bubble is bit inflated looking for now, hence the 50% in cash). Start to introduce income funds/ IT's as the years pass.
So I aim to go -

50% in cash

11.25 in Monks
13.75% in Fundsmith

10% in First State Global Infrastructure
5% in Vanguard Global emerging Markets
10% in Vanguard Global Small Cap

Does this 50/50 split look too conservative, to look to achieve around 3-4% per year for the next 7 - 10 years?

Thanks

Thrugelmir

Have you considered a HTB ISA?

dunstonh

Regular contriubtions into investments typically need around 15 years to be effective. 10 years used to be considered the real minimum but too many people were getting back less than they invested.

for a house in the next 7-10 years.

So, in your case, using an S&S ISA will be higher risk due to short timescale.

100% in equities (no bonds as that bubble is bit inflated looking for now, hence the 50% in cash). Start to introduce income funds/ IT's as the years pass.

How will losing 50% in the the months before you find a house affect your planning?

11.25 in Monks
13.75% in Fundsmith

10% in First State Global Infrastructure
5% in Vanguard Global emerging Markets
10% in Vanguard Global Small Cap

So, you pretty much like a very high risk spread there. A bit of a rollercoaster ride.

Does this 50/50 split look too conservative, to look to achieve around 3-4% per year for the next 7 - 10 years?

The equity spread is around -60% to 40% p.a. The cash side dilutes the overall risk but what you have on the equity side is highly volatile.

bottleandahalf

dunstonh wrote: »

Regular contriubtions into investments typically need around 15 years to be effective. 10 years used to be considered the real minimum but too many people were getting back less than they invested.



So, in your case, using an S&S ISA will be higher risk due to short timescale.



How will losing 50% in the the months before you find a house affect your planning?



So, you pretty much like a very high risk spread there. A bit of a rollercoaster ride.



The equity spread is around -60% to 40% p.a. The cash side dilutes the overall risk but what you have on the equity side is highly volatile.

Hi Thanks for responses
I have thought about HTB ISA but I am going to wait to see what happens with lifetime ISA first before deciding upon those.

The equities are high risk and volatile yes but I plan to be lessening the risk of the pf throughout the years to reduce volatility, so don't plan to hold 25% value stocks throughout the whole timescale. Trim the 25% by 3% every year to absolute/ income, less volatile funds e.g Trojan.

Growth stocks are all very highly valued at the minute and it is hard to find value stocks hence the EM and infrastructure funds.

Dird

bottleandahalf wrote: »

I have thought about HTB ISA but I am going to wait to see what happens with lifetime ISA first before deciding upon those.

The HTB ISA gives you guranteed 25% + balance interest. You can have both HTB ISA & LISA together. There's no reason not to use a HTB ISA

jimjames

bottleandahalf wrote: »

Does this 50/50 split look too conservative, to look to achieve around 3-4% per year for the next 7 - 10 years?

Thanks

A lot of people might say it is nowhere near conservative if you are looking to buy a house in that timescale. As long as you're aware of the risks and can handle the possible drops then that's fine.