Seeking Advice on HL SIPP allocations

[Deleted User]

Is that a yes to the challenge, bowlhead?

bowlhead99

ZingPowZing wrote: »

Is that a yes to the challenge, bowlhead?

Sure, why not. Loser pays £100 to the charity of the winner's choice after a year, while the winner acknowledges that a 1-year return is meaningless?

[Deleted User]

You're on.

But we'll start a new thread for it.

Would be unfair to hijack jellydream's

cloud_dog

Well...went out for the day and gosh....didn't this get all exciting.

DairyQueen

jellydream:

There are basic rules to assist we amateur investors:
1) Identify your aims (you have that box ticked)
2) Determine your investment timescale
3) Understand your tolerance to risk (how would you feel if your portfolio dropped 10%, or 20%, or 50%?).

The outcome of the above will guide your asset allocation (i.e. the balance between the three main classes - equities/fixed interest/cash).

4) Diversify/diversify/diversify - i.e. across asset types/sectors/countries. Collective funds are a cost-effective way of achieving this.
5) Understand that all investments contain risk. Even cash as it is vulnerable to inflation.
6) Charges (platform/transactions/funds) are important as they reduce your returns.

The lowest risk investment is cash.
The highest risk investment is individual shares.
Hubris is the worst enemy of amateur investors.

Very few amateur investors have the knowledge and skill, or the tolerance for risk and volatility, to invest in individual shares. The most common mistake made by newbie investors is to plunge head-first into this kind of investing. Most have tried it, most have burnt fingers (guilty as charged). Some still dabble but you can betcha bottom dollar that this will form only a small part of their portfolio.

It will take you just a few hours of research on this forum to identify the most experienced and common sense contributors. Their guidance has been priceless to me.

Just learning the basics requires research. If you would rather not invest the time then paying an IFA is the way to go.

Good luck.

jellydream

Thanks to everyone for all the sage advice.I am going to do the reading and research you have all suggested and I hope you won’t mind if I come back to you in about a week or so with a possible SIPP fund split for your comment. In the meantime feel absolutely free to continue any discussions you like on this thread. It is all very interesting and educational for newbies like myself.

PS:- In answer to an earlier question my sister and I do have health and finance LPA’s which we completed on line. ( Very straightforward procedure after a dismal consultation with a local solicitor who only had £££££ signs in his eyes...) We also have wills done by another firm of solicitors.

Have a good weekend everyone

Keith_Clunk

As health and longevity is a mentioned factor here then be sure to have your 'loved ones' named as beneficiaries within the SIPP, which everyone should do anyway as a matter of course.

I would recommend choosing one of Vanguard's Lifestrategy funds, such as the Vanguard Lifestrategy 40%, or 20%, or even spread across several. The percentage here refers to equity exposure, the remainder is in bonds. Equity is the more exposed part of the investment and susceptible to more volatility, both up and down.

You may also wish to have some dividend income added into the SIPP. Some funds pay dividends monthly, quarterly etc. and may form part of a planned drawdown. Kames Diversified Monthly Income GBP pays, as it says on the tin, a dividend every month which equates to 4.78% annually while your investment remains invested.

A portfolio can form a combination of any of the above and more, these are only ideas. I am similar in age and have around £100k in Vanguard LS20 and LS40, and the rest in others such as Lindsell Train UK and Global equity funds, plus a few ETF (trackers), such as Vanguard S&P500 tracker GBP (VUSA). So I have some skin in my suggestions.

One thing guaranteed is that cash will decline in value by inflation over time. In general, bonds are looked upon as a safe house and more stable and far less volatile than equities. Keep an eye on fund/management fees (OCF), as they can have a negative impact on growth over time.

When working people are in the accumulation phase. Once they approach retirement they move investments into a more protective mode. In other words, young investors would/should be all into equities, but as life progresses, gradually move into more protected holdings, such as bonds. Ultimately the drawdown phase will begin and you should protect your assets more towards and during that period.

Do some research, and I mean that in a very positive way. What used to be a bit of a "Meh!" subject to me now occupies so much of my spare time and has become a new hobby, for want of a better word. It certainly keeps my mind active.