Retirement asset allocation

AnotherJoe

Thats a hugely different prospect to what you started with, initially it was for your retirement, say 30-40 years, now its just for the next 8 years !! Thats a very different ask.

k6chris

Linton wrote: »

Another vote for a HYP. .

What is an HYP???

Linton

An HYP (High Yield Portfolio) is a portfolio of 15+ high dividend paying shares and possibly funds with the objective of providing a steady income better than an annuity with minimal effort. There is a reasonable chance that the dividends increase with inflation. The idea is that its mostly a buy and hold portfolio, perhaps needing a review once a year to replace any investment that has ceased paying decent dividends.

The initial HYP proposal was made more than 10 years ago on the Motley Fool forums (now closed). The rules were arguably unnecessarily strict but the principle is certainly well worth implementing. Mine provided a 6% return in dividends over the past 12 months.

jamesd

For the long term 35% equity is a bit low but that also depends on market, since the optimal split varies with markets. For example it's historically been better to have higher bond proportions in Australia than normally expected in the US.

Today, though, at least some markets are at rather high values, though this may not apply to yours if you're mostly invested where the cyclically adjusted P/E is low. Assuming that you have a high equity weight to Europe where equity markets are quite low that looks reasonable for the moment. Maybe up it significantly the next time there's a big drop.

I'm not keen on bonds for fixed interest, preferring mostly P2P for that role.

Your P2P return estimates seem rather low in a world where raw rates of 12% are commonly available from places like Ablrate and MoneyThing with Ablrate currently having one paying 16% available. That is before bad debt, though, with no protection funds for those, though that 16% deal does have a protection of a sort beyond just the security, via the intermediary providing a partial guarantee also. I rather like the AE* loans at MoneyThing and the APF at Ablrate because of the multiple layers of protection offered beyond just conventional security.