Ive seen sense: I've Moved from Discretionary Management....

[Deleted User]

....to Interactive Investor (for my SIPP £177k). Transfer is now complete and I need to start choosing investment/s as it is all held in cash currentlly but within SIPP wrapper.

HOWEVER HELP!! Although I am, as a matter of extreme urgency, reading DIY Simple Investing by John Edwards & Investing Simplified by Lars Kroije, I need to choose investments.

Given my situation below and that I am looking to retire in 3 to 5 years & have a medium attitude towards to Risk......... would placing 100% of my holding in 80/20 Vanguard be a reasonable temporary (12-18 months) whilst I research/learn more about investing/creating a balanced portfolio for my SIPP? Or what other investments options coud I research in the first instance?
(Bitcoin as an investment advice will be ignored :T:T:T)

Aged 52, looking to retire at 55-58 (depending how much I still love my role)

£40k salary plus Bonus (on target 17%), Employed by major UK Insurance company with access to DC Pension Fund (employer pays 12% of gross salary, I pay 8% of gross salary and £1400 AVC both by salary sacrifice, thus reducing taxable salary to Minimum wage)

Current Pension Values
£80k Current Employer DC
£256k Previous Final Salary from 11 years in automotive sector (now deferred member: £12.5k per annum multiplied by 20 to give "pot value")
£10k Previous Final Salary AVC pot
£177k SIPP
36 years Full NI contributions made
oh and £378 in NEST Pension :rotfl::rotfl::rotfl:

Other Assets
£380k House, no mortgage, Let to Long Term Tenants,
£140k (Half share of house) with Parent, No mortgage
£40k Cash Isa
£88k Share Isa
£43k Share Isa
£23k Premium Bonds/Current Account (rainy day instant cash)
£25k High value items (Current ReSale value) (emergency emergency rainy day cash)

No debts, No dependents

AnotherJoe

Given my situation below and that I am looking to retire in 3 to 5 years & have a medium attitude towards to Risk.........

Are you planning to go totally into cash in 3-5 years time? Or buy an annuity? If not that timeline isnt very relevant.
would placing 100% of my holding in 80/20 Vanguard be a reasonable temporary (12-18 months) whilst I research/learn more about investing/creating a balanced portfolio for my SIPP? Or what other investments options could I research in the first instance?

80/20 Vanguard IS a balanced Portfolio. That's the point of it which you appear to have missed?



(Personally I'd use another suppliers 80/2 that doesn't include the artificial 25% "UK" emphasis, but whatever, the point applies.)
See perhaps here for some alterantive Vanguard suggestions, other fund houses do similar. HSBC, L&G, maybe Baille Gifford?

bowlhead99

mulberryellie wrote: »

Given my situation below and that I am looking to retire in 3 to 5 years & have a medium attitude towards to Risk......... would placing 100% of my holding in 80/20 Vanguard be a reasonable temporary (12-18 months) whilst I research/learn more about investing/creating a balanced portfolio for my SIPP? Or what other investments options coud I research in the first instance?
(Bitcoin as an investment advice will be ignored :T:T:T)

No, if your 'attitude to risk' is only 'medium' then it would not be appropriate to put your entire SIPP into a higher risk fund such as 80% equities. A crash causing a 40% drop in the value of the fund would be annoying if you were trying to retire and draw heavily from your SIPP to get your through the early years of your retirement.

An example of a more 'medium' fund but still primarily invested into simple index trackers (assuming you are looking for that kind of portfolio construction because you like Kroije's principles) would be Legal & General Multi Index 5 fund.

[Deleted User]

AnotherJoe wrote: »

80/20 Vanguard IS a balanced Portfolio. That's the point of it which you appear to have missed?



(Personally I'd use another suppliers 80/2 that doesn't include the artificial 25% "UK" emphasis, but whatever, the point applies.)
See perhaps xxx for some alterantive Vanguard suggestions, other fund houses do similar. HSBC, L&G, maybe Baille Gifford?

Thanks AnotherJoe

I do recognise the Vanguard 80/20 as balanced but was unsure as to whether (despite its popularity in MSE forum dispatches) it was my only "for convenience" option - your other suggestions have given me food for thought/research - really grateful, Thank you

[Deleted User]

bowlhead99 wrote: »

No, if your 'attitude to risk' is only 'medium' then it would not be appropriate to put your entire SIPP into a higher risk fund such as 80% equities. A crash causing a 40% drop in the value of the fund would be annoying if you were trying to retire and draw heavily from your SIPP to get your through the early years of your retirement.

An example of a more 'medium' fund but still primarily invested into simple index trackers (assuming you are looking for that kind of portfolio construction because you like Kroije's principles) would be Legal & General Multi Index 5 fund.

Thank you Bowlhead, that was just the sort of critique I was after - THANK YOU

AnotherJoe

Yes I should perhaps have also said that if you are going for medium risk that is more likely vls40 or 60 (or better, someone else's 40 or 60. Unless vanguard do an equivalent without the artificial 25% "U.K.")

And back to your basic question, all of those are balanced so should not need to be temporary.

Albermarle

I would agree that 80% equity fund is a bit risky at this stage . On the other hand you are only 52 and have a nice big war chest to approach retirement , so you could with stand some drops in value and wait for recovery .
So maybe a 60:40 fund as the core holding, and then later start to add on a few active funds , which seems to be quite a common approach .
For the 60:40 fund it is worth having a look around as under the bonnet they are not all the same . For example whilst some stick to the 60:40 split religiously , some others work within a band. Also with different regional splits ,

[Deleted User]

Thank you everyone - I am on the case!

Thrugelmir

mulberryellie wrote: »

Given my situation below and that I am looking to retire in 3 to 5 years & have a medium attitude towards to Risk.........

How much capital could you lose and still sleep happily at night?

SmashedAvacado

isnt the bigger risk about the current price of equities - if you bung it all in at once, then you might have overpaid for the fund units. Its typically better to drip feed into investments but obviously you dont have a long term approach. With only a couple of years to go, i would be going more cautious because equities are probably higher than normal in the cycle. Currency could come into play also.