investment portfolio diversification

kinger101

It would help if you read some basics first.  It would at the very least allow you to post more succinct and direct questions aimed at specifics rather than generalities.  A good starting point might be A Random Walk Down Wallstreet, but others can probably suggest more UK focused and concise texts.

If this is retirement saving;
(a) ensure you're getting the maximum employer contribution;
(b) after that, it seems you're a basic rate taxpayer without salary sacrifice.  LISA is the most efficient option
(c) it doesn't matter one iota that you'll not be able to contribute after 50.  You just use the most tax-efficient wrapper available at the time. Which might change for example if you become a higher rate taxpayer.
(d) At age 34, you're still 33 years away from state retirement age.  80-100% equities is fine.  The World Index fund you've already mentioned does the job perfectly well.  Dilute it with bonds if you desire, or a VLS fund to hit the bond allocation you want.  Active funds generally underperform compared to trackers in the long run because of their higher fees.  
(e) You shouldn't stay at that allocation forever, but it's probably good for the next 20 years at least.  At some point between now of then, you'll hopefully get a better understanding how portfolio can be de-risked as you move closer to retirement.

Dh6

You had very similar questions to me when I first started my investing journey. If you haven’t already, take a look at Lars Kroijer’s investing demystified series for some excellent advice. 

Thrugelmir

Dh6 said:

You had very similar questions to me when I first started my investing journey. If you haven’t already, take a look at Lars Kroijer’s investing demystified series for some excellent advice. 

Now that there's more real data becoming available be interesting to see if his key theory stands the test of time. 

Linton

Dh6 said:

You had very similar questions to me when I first started my investing journey. If you haven’t already, take a look at Lars Kroijer’s investing demystified series for some excellent advice. 

I would agree in a sort of back-handed way. If you accept his arguments you should follow his advice. It is unlikely to lead you astray, especially while you are still at the stage where your level of contribution is more important than your investment return.
However over time as your circumstances and objectives change you may find his approach inadequate. But by then you will have the experience to create your own investment strategy that more closely matches your needs.

port_of_spain

What is Lars' key theory? I thought it was that most people don't have an "edge" in investing. Is anybody expecting that to be disproved?

Linton

port_of_spain said:

What is Lars' key theory? I thought it was that most people don't have an "edge" in investing. Is anybody expecting that to be disproved?

My view is not that the theory is disproved, but rather that it may not be relevent. The "edge" being talked about is in long term returns.  Maximum long term returns may well not be the primary objective of the investor, the main exception being relatively young people with sufficient income to cover day to day needs using contributions from that income to build up a pot that wont be touched until retirement.

Thrugelmir

port_of_spain said:

What is Lars' key theory? I thought it was that most people don't have an "edge" in investing. Is anybody expecting that to be disproved?

The MSCI world index has been around many decades. The ability for an investor to invest it hasn't. As a consequence there's no historic data to base assertions on. 

port_of_spain

Linton said:

port_of_spain said:

What is Lars' key theory? I thought it was that most people don't have an "edge" in investing. Is anybody expecting that to be disproved?

My view is not that the theory is disproved, but rather that it may not be relevent. The "edge" being talked about is in long term returns.  Maximum long term returns may well not be the primary objective of the investor, the main exception being relatively young people with sufficient income to cover day to day needs using contributions from that income to build up a pot that wont be touched until retirement.

Well, the theory is not only relevant to maximizing returns. If an investor's medium- or low-risk portfolio is better than a comparable edgeless medium- or low-risk portfolio — "better", in the sense that: it has higher returns for the same risk level, or the same returns for a lower risk level — then the investor has "edge".

Now, you may say that so-called "risk" levels don't adequately describe the aims of an investor in deccumulation (in plain english: somebody living off their money). It certainly doesn't feel adequate to me. But I'm not convinced there's any better way to guide one's portfolio.

port_of_spain

Thrugelmir said:

port_of_spain said:

What is Lars' key theory? I thought it was that most people don't have an "edge" in investing. Is anybody expecting that to be disproved?

The MSCI world index has been around many decades. The ability for an investor to invest it hasn't. As a consequence there's no historic data to base assertions on. 

How does the non-availability of global tracker funds before a certain date in the past make it more likely that most investors have "edge" now? :puzzled:

Linton

port_of_spain said:

Linton said:

port_of_spain said:

What is Lars' key theory? I thought it was that most people don't have an "edge" in investing. Is anybody expecting that to be disproved?

My view is not that the theory is disproved, but rather that it may not be relevent. The "edge" being talked about is in long term returns.  Maximum long term returns may well not be the primary objective of the investor, the main exception being relatively young people with sufficient income to cover day to day needs using contributions from that income to build up a pot that wont be touched until retirement.

Well, the theory is not only relevant to maximizing returns. If an investor's medium- or low-risk portfolio is better than a comparable edgeless medium- or low-risk portfolio — "better", in the sense that: it has higher returns for the same risk level, or the same returns for a lower risk level — then the investor has "edge".

Now, you may say that so-called "risk" levels don't adequately describe the aims of an investor in deccumulation (in plain english: somebody living off their money). It certainly doesn't feel adequate to me. But I'm not convinced there's any better way to guide one's portfolio.

I would certainly say that, which is why I question the approach that implies the only investment decision one needs to make is the value of xx in VLSxx.  The approach that enables me to sleep at night is to identify the basic objectives and focus on achieving them in a way that can easily be controlled by reallocating particular investments.