Portfolio Restructuring for the Future

Sebo027

Hello everyone, first post!

Allow me to tell you a bit about myself. I am just on the wrong side of 30 and I have been dabbling with investing for the past few years. I have read a dummy's guide book once or twice, I have done a bit of reading on the internet. I've been known to buy and sell stocks and shares (oil stocks!) for a few months and then leave well alone. For all that, I am hoarding cash, and I don't feel I have my stall set out for the future.. yet. It's starting to bother me and I'm looking to rebalance my portfolio for longer term passive investing. I've also got money sitting in Woodford's fund and that's given me a bit of a kick up the !!!!.

I do intend to see an independent financial adviser but ahead of that I'm hoping for some advice / tips and to go in with my own understanding of what's best and be able to understand his suggestions a bit better. Here's how I feel I should structure my investment portfolio:

1. For my age, a standard investment approach would be 70% stock vs 30% bonds.
2. Geographical diversity = good. Ideally I would like to see split between UK-US-DevEU of 25-30-25% and the remainder from the other finance zones (Asia, Australasia, Emerging Europe).
3. Fund / ETF charges = lower is better. Watch out for early exit penalties.
4. Fund should have a good split between GBP and USD in terms of currency distribution. I'm currently an expat and if i'm honest i'm not sure where I'm going to retire.

Lastly, I have a pension which until recently has been a company provided pension fund through Legal and General. I may convert that into a SIPP and start paying into that.

I have a mix of shares and funds I own, and I have identified a more funds / ETFs I believe will strengthen and diversify my investment portfolio.

And lastly, below is a ratio of what my wider financial portfolio would look like:

1. Cash (1 years worth of unemployment) - 10%
2. Equity in Property (not yet bought) - 25%
3. Pension - 25%
4. Invested Money - 40% - 70/30 shares / stocks split.

That's it - let me have it with both barrels!

Cheers,
Brian.

msallen

You haven't actually asked a question, so I guess you're just looking for people's thoughts in general, so here's the first ones that pop into my head ...

The geographical split seems a little strange. 25% UK is within the realms of acceptability for a UK resident, but for someone not resident here, and possibly not even retiring here, it seems high.
Similarly 25% in Europe-ExUK seems very high, although I guess if you're living in the Euro zone and likely to retire there its understandable.

Who says 70/30 is "standard" for your age. Many self investors (as opposed to people just going into their default employer pension funds) would opt for a higher stock element at your age.

Having a greater proportion of your S&S holdings outside a pension wrapper than in one also seems a little strange.

Albermarle

Lastly, I have a pension which until recently has been a company provided pension fund through Legal and General. I may convert that into a SIPP and start paying into that.

An employer can sometimes negotiate good discounts with the pension provider, and usually you can continue to benefit from these when you leave ( not always) . On the other hand some SIPPS with certain funds can be expensive . So check out all the details before moving this pot.

iglad

far too conservative you've got another 20-30 years of investing ahead of you so why have bonds? Go for growth young man go for growth.

AnotherJoe

Brido88 wrote: »

Hello everyone, first post!

Allow me to tell you a bit about myself. I am just on the wrong side of 30 and I have been dabbling with investing for the past few years. I have read a dummy's guide book once or twice, I have done a bit of reading on the internet. I've been known to buy and sell stocks and shares (oil stocks!) for a few months and then leave well alone. For all that, I am hoarding cash, and I don't feel I have my stall set out for the future.. yet. It's starting to bother me and I'm looking to rebalance my portfolio for longer term passive investing. I've also got money sitting in Woodford's fund and that's given me a bit of a kick up the !!!!.

I do intend to see an independent financial adviser but ahead of that I'm hoping for some advice / tips and to go in with my own understanding of what's best and be able to understand his suggestions a bit better. Here's how I feel I should structure my investment portfolio:

1. For my age, a standard investment approach would be 70% stock vs 30% bonds.

I'd say at your age it shoudl be 100% . You could easily be invested for 40 years maybe more.
2. Geographical diversity = good. Ideally I would like to see split between UK-US-DevEU of 25-30-25% and the remainder from the other finance zones (Asia, Australasia, Emerging Europe). Why would that be ideal? Sounds poor to me, too much in one small country, not enough in the biggest economy, too much is "developing europe or emerging europe. What about "europe" wheres that?
3. Fund / ETF charges = lower is better. Watch out for early exit penalties. I'm not aware of many funds or ETFs that have early exit penalties (actually, I'm not aware of any) and why would you need to watch out for them? Why would you be planning an early exit ?
4. Fund should have a good split between GBP and USD in terms of currency distribution. I'm currently an expat and if i'm honest i'm not sure where I'm going to retire.

Lastly, I have a pension which until recently has been a company provided pension fund through Legal and General. I may convert that into a SIPP and start paying into that. If you are an expat are you eligible for a SIPP?

I have a mix of shares and funds I own, and I have identified a more funds / ETFs I believe will strengthen and diversify my investment portfolio.

And lastly, below is a ratio of what my wider financial portfolio would look like:

1. Cash (1 years worth of unemployment) - 10%
2. Equity in Property (not yet bought) - 25%
3. Pension - 25%
4. Invested Money - 40% - 70/30 shares / stocks split.

If you are an ex pat then the pension situation is complex and out of scope here really.


That's it - let me have it with both barrels!

Cheers,
Brian.

See above for both barrels

bostonerimus

If you are an expat the pensions situation could be tricky and will be governed by the local law of where you are tax resident and the dual tax treaty with the UK. the taxation of foreign funds ie UK funds will also be governed by the laws of where you are resident and the tax treaty....that country might have very permissive rules or very restrictive ones, and example of restrictive rules is the USA.

Sebo027

Good morning all,
I did not press ahead with a restructure 6 months ago but given the condition of the stock market it seems like an ideal time to get stuck in. Previous feedback received you guys gave was well received and welcome. I have some other questions / thoughts I would like feedback on:

Pension 
I built up money in a UK pension fund while working in the UK. It's currently sitting in legal and general PMC managed 3 chart. I haven't given a great deal of thought with what to do with this yet, and as has been pointed out above the situation may be more complex because I am now tax non-resident. There's currently 50k in it that fund and my immediate thoughts are to do nothing with it for the time being and let it grow as is. 

Invested Money and Long Term Savings
I like the idea of globally invested ETFs. Below are the three funds I was looking to invest in and set up a portfolio with (I read the book "The Millionaire Expat" and he recommends below):

• IWDA iShares Core MSCI World UCITS ETF USD (Acc) - 75%
• EIMI iShares Core MSCI EM IMI UCITS ETF USD (Acc) - 15%
• IGIL iShares Global Inflation Linked Govt Bond UCITS ETF USD (Acc) - 10%

I am looking to put most of my money in that portfolio and begin regular monthly payments. I used the x-ray feature on MorningStar and from what I can see it's split 23-58-18 across Europe:US:Greater Asia and split evenly between Cyclical, Sensitive and Defensive Stocks. At my age do you think is it too defensive? With the cash value I have to invest this would represent about 60% of my net worth.

Cash Holdings
I basically have been looking to reduce my cash holdings down entirely and keep a year's worth of expenses in a Santander123 account. They've cut the interest recently and I'll look around for a competitive alternative.

Property
I don't own property yet but I am keen to buy and as a result would like to keep 60k readily accessible for that purpose. The problem is I have been saying that for a few years and as as result that money has been eroding. 

Stock Market Flutter
I don't have much of an appetite for day to day trading but in terms of 1-3 year investments I would like to have about 20k to muck around with in the FTSE 250/100.

Gold 
Bit of a hot top on here it seems! Does anyone invest in gold as part of their portfolio, and again, do you do it through an ETF?

Suggestions?:
Generally open to suggestions. I have no dependents and no debt, and am fortune enough to have accrued cash but obviously this will not grow my money. Long term goals? Maximize the opportunities available and don't waste the time I have in front of me. Based on what I have penciled in above my portfolio would be spread as follows:

• Cash 6%
• Property 17%.
• Short Term Investments 6%
• Long Term Investment 55%
• Pension 16%

Does that seem like a reasonable spread?

Sebo027

AnotherJoe said:

Brido88 wrote: »

Hello everyone, first post!

Allow me to tell you a bit about myself. I am just on the wrong side of 30 and I have been dabbling with investing for the past few years. I have read a dummy's guide book once or twice, I have done a bit of reading on the internet. I've been known to buy and sell stocks and shares (oil stocks!) for a few months and then leave well alone. For all that, I am hoarding cash, and I don't feel I have my stall set out for the future.. yet. It's starting to bother me and I'm looking to rebalance my portfolio for longer term passive investing. I've also got money sitting in Woodford's fund and that's given me a bit of a kick up the !!!!.

I do intend to see an independent financial adviser but ahead of that I'm hoping for some advice / tips and to go in with my own understanding of what's best and be able to understand his suggestions a bit better. Here's how I feel I should structure my investment portfolio:

1. For my age, a standard investment approach would be 70% stock vs 30% bonds.

I'd say at your age it shoudl be 100% . You could easily be invested for 40 years maybe more.
2. Geographical diversity = good. Ideally I would like to see split between UK-US-DevEU of 25-30-25% and the remainder from the other finance zones (Asia, Australasia, Emerging Europe). Why would that be ideal? Sounds poor to me, too much in one small country, not enough in the biggest economy, too much is "developing europe or emerging europe. What about "europe" wheres that?
3. Fund / ETF charges = lower is better. Watch out for early exit penalties. I'm not aware of many funds or ETFs that have early exit penalties (actually, I'm not aware of any) and why would you need to watch out for them? Why would you be planning an early exit ?
4. Fund should have a good split between GBP and USD in terms of currency distribution. I'm currently an expat and if i'm honest i'm not sure where I'm going to retire.

Lastly, I have a pension which until recently has been a company provided pension fund through Legal and General. I may convert that into a SIPP and start paying into that. If you are an expat are you eligible for a SIPP?

I have a mix of shares and funds I own, and I have identified a more funds / ETFs I believe will strengthen and diversify my investment portfolio.

And lastly, below is a ratio of what my wider financial portfolio would look like:

1. Cash (1 years worth of unemployment) - 10%
2. Equity in Property (not yet bought) - 25%
3. Pension - 25%
4. Invested Money - 40% - 70/30 shares / stocks split.

If you are an ex pat then the pension situation is complex and out of scope here really.


That's it - let me have it with both barrels!

Cheers,
Brian.

See above for both barrels

I forgot to reply specifically on one thing - the comment about exit fees and charges. I've been cold called a few times by representatives from DeVere Group. I almost met with their representative, he's based in Dubai, but never did. After reading a book that warned of poor practice, I googled them and found horrendous reviews on trust pilot. Particularly with expat investors, often stung on poorly performing funds with exceptionally high charges and steep exit fees - thus my question before. You'll notice on the reviews that all the negatives are pretty specific, where as the positive reviews are general and I would suspect artificial with the intent to drag the true 1 start rating up to an average of 3. Noted that they've been discussed here before on the forum and hopefully the below investor did not get involved with them:
https://forums.moneysavingexpert.com/discussion/5106149/expat-investment-advice-devere-group/p2

Generally speaking, after reading that, and having spent a few years as an expat I've come to realise that there are alot of charlatans floating around masquerading as "financial advisers" who operate in unregulated environments overseas, and unfortunately alot of people fall victim to their practices. 

Albermarle

Generally speaking, after reading that, and having spent a few years as an expat I've come to realise that there are alot of charlatans floating around masquerading as "financial advisers" who operate in unregulated environments overseas, and unfortunately alot of people fall victim to their practices. 

I have seen similar comments before on the forum . Despite a few issues, the UK is a highly regulated market in this respect , with compensation if given poor/unsuitable  advice.