Capital Preservation ITs

Linton

ArchBair wrote: »

IMO your WP and Growth portfolio's are really good, would you mind me asking what you hold in your income portfolio?

European Assets Trust - 12.5% - Equity
Schroder Asian Income Maximiser (OEIC) - 11.7% - Equity
L&G High Income(OEIC) - 11% - Bonds etc
Princess Private Equity (IT) - 8.5%
Schroder Global Cities (OEIC) - 8.5% (Global property) To be sold as the % income is too low now.
L&G Emerging Markets Gov Bond (OEIC) - 7% - Bonds
Legg Mason IF Brandywine Global Income Optimiser (OEIC) - 6% - Bonds etc
Threadneedle EM bonds (OEIC) - 4% - Bonds

The remaining 40% or so is UK directly held shares with a strong FTSE250 bias.

At some stage much of the UK equity will be moved into 2-3 ITs keeping only a few FTSE250 shares that have served me well over many years and possibly a few REITs. I am losing enthusiasm for the amount of research needed to maintain a 17 share portfolio.

capital0ne

Just out of interest what is everyone's portfolio objective? Income for retirement, house purchase, yacht purchase, kids inheritance, or are you just doing it for the fun of it!

And more contentious, what sort of sums do most people have in their portfolio, £100's, £1,000s, £10,000s, £100,000s or even more.

What's your strategy besides WB's two rules - I'm sure everyone here knows them!

What sort of gains losses have you made in the last 10 years?

Should be interesting

bowlhead99

capital0ne wrote: »

Just out of interest what is everyone's portfolio objective?

If you mean literally everyone then the range of answers will be everything.

I'm 41. Mine is 'building my wealth'. I do have different portfolios (GPP, SIPP, ISA, unwrapped, VCT, EIS/ SEIS etc), with different objectives.

What sort of gains losses have you made in the last 10 years?

Gains and losses, but overall, gains.

Alexland

Similar - lots of accounts / wrappers for different purposes. I am fortunate enough to have not crystallised any losses since moving to low cost mostly passive long term funds investing.

In the old days when trading individual shares it was like a bad game of roulette where the dealing fees would seriously errode any gains.

Alex

bostonerimus

I take a holistic approach with my various retirement and regular investments accounts, I look at the asset allocation over all of them and use them to achieve my goal of financial independence. My retirement accounts are not accessible yet so I have a cash buffer earning 2% in a tax deferred accessible account....and have 100% equity index funds in my regular account for tax efficiency. I plan to stick with my 70/30 asset allocation if a crash occurs.

Psychology plays a big part in the approach to investing, particularly as you approach retirement and capital preservation and income generation seem to become more important. Historically it wasn't an issue as you just had a final salary pension or you bought an annuity....the conservative safety first solution. Now that the UK has greater "pension freedom" and a rapidly increasing dependence on DC pension pots there are difficult choices to be made. So if you ask me whether I am conservative or a risk taker my answer would be "yes".......I'll explain. I'm lucky to have enough savings to comfortably cover my expenses so after securing guaranteed income that will cover my expenses I then take a risky equity heavy total return approach to income generation with the rest of my money.

Long term planning has got me to this happy point. I bought a two family house 20 years ago which is now mortgage free and produces $1600 in rent each month. Also just before I retired I had the chance to take some of my DC pension savings and use it to buy into my employers final salary pension....so the reverse of taking a CETV....they took $280k from my DC accumulation and gave me a $20k/year index linked lifetime pension starting at age 55. So I have ~$40k /year in reliable income. That's my foundation. I would encourage people to invest some money for "foundation income" in conservative fixed income that along with state pension will keep the wolf from the door. Maybe annuities will be part of that in the future.

Once paying for the basics are covered, or at least having enough to survive a multi year down turn in equites, then you should invest for capital growth to finance those trips to Antibes. My approach is to use simple low cost equity indexes with a US bias because I'm in the US. They produce around 2% or 3% in annual dividends and hopefully annual gains....but the dividends should give a pretty stable compliment to your foundation income.

So to summarize my retirement investment strategy isn't much different from when I was working. I have a low cost equity index portfolio with some bond index to dampen volatility. I have a slightly larger cash buffer than when I was working and I took the opportunity to buy into a final salary pension when I could; that could be replaced in your plan by an annuity, a savings bond ladder or a gilt or high quality corporate bond portfolio. But the biggest help in retirement income planning is having enough to cover your expenses. Increasing your assets takes time, so you should look at reducing your income needs. Cancelling the Sky TV subscription will have immediate benefits........

bostonerimus

capital0ne wrote: »

What sort of gains losses have you made in the last 10 years?

Looking at my accounts I see 7.5% annual average return from 2007 to 2017 and 10.5% for the last 5 years.