Asset allocation for a centurian

Legacy_user

A friend of mine is 103, so by taking the 100-age rule of thumb he should have -3% exposure to equities, so he should in theory be shorting global equities! And by an increasing amount each year
Hypothetically with improving medicine, if someone lived over 200 they would need to start leveraging that short position to keep with the 100-age rule!

But I think there is a case for the elderly to invest, especially if their assets can be inherited without sale (possible I wonder? - because I wouldn't want to die in the bottom of a market crash and sell at a bad time, and I wouldn't want to sell up just to get a stable figure for my estate)

But if all isas and sipps had to be sold on death I suppose I'd need to go cautious leading up to it. I believe 20% equity with 80% bonds is safer than 100% bonds - correct? Is this the safest/least volatile allocation that uses bonds?

Eco_Miser

The 100 - age rule is based on a certain life expectancy. At 103 this has already been exceeded, so the rule no longer applies. If 200 year lifespans become credible, then the rule of thumb will be revised upward, possibly to 200 - age or 100 whichever is less.

Even if ISAs and SIPPs had to be sold at death, the beneficiaries could buy back at nearly the same price, so the state of the market doesn't make much difference.

Alexland

MatthewAinsworth wrote: »

But if all isas and sipps had to be sold on death I suppose I'd need to go cautious leading up to it. I believe 20% equity with 80% bonds is safer than 100% bonds - correct? Is this the safest/least volatile allocation that uses bonds?

Thank you the OAP shorting equities amuses me greatly!

Seriously though going mostly bonds carries its own risks especially given how market bond prices have been affected by low interest rates. A balanced mixed asset approach would probably be better assuming the money will be invested for at least 5 years else cash. If the money will not be spent in the person's lifetime then consider how the beneficiaries will use the money. If they will continue to invest it then you might be ok to take more risk now.

Alex

talexuser

Asset allocation for a centurian.

Well his income is easily many times that of a simple legionary, so some spread would seem worthwhile. Burying a quantity of sestertii in a pot in the garden would do for a pension. Obviously gold, but myrrh is holding its value well, and there is a shortage of flax in the eastern empire so investing in a toga business with linen stock could see prices rising.

Thrugelmir

If you are the executor of the estate (and have LPA) I'd want to start tidying up, i.e. streamlining financial affairs now. Investing the realised proceeds into liquid low risk assets. Little point in speculating with life expectancy and market movement.

richyg

Alms for an ex leper. Half a dinari for my life story.

System

I've read that you can indeed have an "in specie" transfer with inheritance, so there's no risk being out of the market, in which case I think you can stretch it to your beneficiaries goals ☺

I was also thinking, perhaps unmortgaged commercial property is safer than corporate bonds in that if the Tennant goes bust, a landlord (I believe) is higher up the pecking order than bondholders. Doing it indirectly would get around the liquidity and diversity problems, but finding unmortgaged landlords might be hard

Because property is like a form of bond in a way, just lending something different

bowlhead99

I've made a new year's resolution to stay out of MatthewAinsworth threads as it will probably save me a lot of time over the course of the year. I'll allow myself this one transgression to tell you that...

Gadfium

MatthewAinsworth wrote: »

Because property is like a form of bond in a way, just lending something different

A dog is like an octopus in a way, just with fewer legs and a different way of breathing..

System

Bowl - new year doesn't begin till April 6th

Voyager2002

talexuser wrote: »

Asset allocation for a centurian.

Well his income is easily many times that of a simple legionary, so some spread would seem worthwhile. Burying a quantity of sestertii in a pot in the garden would do for a pension. Obviously gold, but myrrh is holding its value well, and there is a shortage of flax in the eastern empire so investing in a toga business with linen stock could see prices rising.

Lovely!
I shall just note that the word the OP probably intended to use is centenarian.