Platforms vs Platforms

bowlhead99

Credit-Crunched wrote: »

SO in essence having 10 funds in my portfolio that have £400 a month added to them and the £40k i transfer in from my old pension split equally across them.

That's "one way to do it" but not a particularly traditional way. For example, the US stock market is several times bigger than the European one and maybe ten times as big as AsiaPacific-ex-Japan-ex-EmergingMarkets. Would you really want the same amount of money in each? And you'd have as much in commodities (a diversifier which in small doses may provide a hedge against inflation) as you'd have in the entire US stockmarket (a major growth engine for your portfolio representing $30 trillion or more of global market value).

If you look at the £40k that's currently invested in your pension, do the fund managers at L&G just allocate equally between all the asset classes and world markets they can think of? No. They research their allocations in terms of performance or volatility targets and how correlated the different sectors are to each other, and have reasoning behind what they do.

You mention you want to be diversified across asset classes and regions. But I only see three asset classes: property, commodities and equities (assuming the named regions means equities in those regions). What about government bonds (index-linked and conventional), investment grade corporate bonds, high yield corporate bonds, emerging market bonds? Or a couple of bond funds that together cover those areas.

Yesterday at 2pm you said a multi asset fund would underpin your portfolio. Presumably what you have with the old employer's L&G pension is - like most people's default pension fund with their employer - multi asset and internationally diversified rather than purely equities or purely bonds or purely cash or purely properties or purely UK or purely overseas. So it makes sense that when you move it out of that old pension into your nice shiny new pension you buy another multi-asset fund with it, and perhaps half of your new money goes into that fund too, leaving the other half of the new money for tinkering - as the outcome of your "research, experience and education" as you put it.

However by 9.30pm you seemed to have abandoned the idea of "a multi asset fund will underpin my portfolio to start" and gone straight to "having 10 funds in my portfolio that have £400 a month added to them and the £40k i transfer in from my old pension split equally across them."

Abandoning the investment approach of what underpins your portfolio (a core multi-asset fund) within 7.5 hours of suggesting it, despite nobody giving you any negative feedback, and then just proposing to invest equally into all the main sectors you have heard of... doesn't sound to me like someone who is full of "research, experience and education". It sounds like someone full of "impatience, exhuberance and enthusiasm".

A certain amount of enthusiasm is a pre-requisite for running your own portfolio. The other qualities of impatience and exhuberance are negatives if you are hoping to run a calm, balanced, hassle-free portfolio that avoids excessive risk taking. Ignoring the AIM portfolio for a moment, which is perhaps supplemental to these plans.

Credit-Crunched

Thanks for you further responses, it appears to be crossed communications or poor on my behalf!

I am making a single contribution this tax year of £25,000 which will be in a multi asset fund, yet to be decided. Most Likely VG80

Points on bonds noted, I may have a slight exposure to them, but given my investment time frame I was looking for an equity heavy portfolio. In addition, the split across the sectors will not be equal, with a leaning towards UK and US equities.

My AIM shares, are very niche oil exploration shares (my profession) and as such has significant upside, but also strong possibility of a nil value, these have been built up over the years and average PPS is cira 1.5p.