Assessing your Risk level

ValiantSon

You make some good points and I don't argue with your assessment.

Unfortunately I don't know the answer to what either bonds or equities are going to do in the future so my decision might be a poor one, or it might be a brilliant one, or it might be okay. If only I could see the future.

username12345678

I went through the industry questionnaire with my IFA and I came out middle of the road 'bit of income, bit of growth'.

This translated as an 80%+ equity holding with a around half of that in 5 or 6 UK Eq Inc funds (holding the same shares) even though I had made it clear I was at least 10-15 years from drawing down.

After doing my own research on historical asset mix returns and allocations I realised I needed to put an actual hard number on what I could mentally handle losing out of my investments before it started to get very uncomfortable.

Once I had that figure it wasn't difficult to get a ballpark allocation mix and then work downwards through geographical allocations and in to individual funds/IT's/ETF's to achieve what I wanted.

Doesn't mean the markets will give me what i'm hoping for of course but i'm happy i've gone through a thought-out process.

As for market dips/corrections/crashes...

I'm running an ultra-defensive ISA which will be transitioned in to equities in chunks from the point the market drops 20% and then at each 5% fall beyond that. If I don't get it invested then that's ok because my SIPP will be doing fine and if it does get invested then that's o as well because the ISA's are covering the first 10 years of retirement funding.