My pension - thoughts and feedback

[Deleted User]

For someone with a (self-determined?) high-risk profile and (hopefully)  fifty-years of investing ahead, I would recommend the OP start again with four stocks. The biggest ones. It is always easier to proliferate than prune back.

To borrow a phrase "taking back control."

tel_

What about the 85k protection for SIPPS - this is where it gets a little confusing for me.

Because LookingForward20 has £117k in a SIPP, is this okay as he has money split in different funds with different providers (Vanguard, Baillie Gifford, HSBC etc) or is this a concern, because all the money is within one platform provider?

[Deleted User]

No, that shouldn't really be a concern, tel.
Pensions have a different set of protections and for a lot of people have become more valuable than their houses.

Linton

ZingPowZing said:

For someone with a (self-determined?) high-risk profile and (hopefully)  fifty-years of investing ahead, I would recommend the OP start again with four stocks. The biggest ones. It is always easier to proliferate than prune back.

To borrow a phrase "taking back control."

50 years ago or so the 4 largest companies by market capitalisation in the US were
1) IBM
2) AT&T
3) Eastman Kodak
4) General Motors
The only one in the top 50 list now is AT&T

[Deleted User]

Linton said:

ZingPowZing said:

For someone with a (self-determined?) high-risk profile and (hopefully)  fifty-years of investing ahead, I would recommend the OP start again with four stocks. The biggest ones. It is always easier to proliferate than prune back.

To borrow a phrase "taking back control."

50 years ago or so the 4 largest companies by market capitalisation in the US were
1) IBM
2) AT&T
3) Eastman Kodak
4) General Motors
The only one in the top 50 list now is AT&T

Yes, things change. 
The mistake most investors make is in thinking things will revert towards where they were before.

Anyway, is this a new rule, Write your investments in cement and wait for 50 years? Don't some things become very obvious over 10 years, or less? And is a private investor not at a huge advantage over a fund manager in the respect of switching from, say, BT to Apple? 

NedS

BritishInvestor said:

Linton said:

Your choice of funds is fine as higher risk for the long term.  It could be argued that 4 global funds is 2-3 more than necessary but it doesnt really matter.  The biggest overlap is probably between the Vanguard and HSBC funds so I think you could dispense with one of these if you really wanted.

If you are happy with the risk you could have a look at a small companies fund as small companies are not well represented in your portfolio at the moment.  You could increase the % in the Baillie Gifford fund a bit, though not too much as it is very focussed.

But all this is marginal.  You seem sensibly invested to me given your circumstances and with your high planned contributions your should be able to look forward to an early and comfortable retirement.

Surely a bit of a stretch to say Lindsell is global when >60% of the holdings are in 10 shares?

You could say that about any high conviction concentrated fund. The clue is in the title, they get to pick from a global universe of equity rather than a more limited space. A lack of diversification maybe, but evidently nothing wrong with picking 25 really great companies from around the world given they have outperformed global equity indicies over the last 5 years (past performance not a guarantee of future returns). At least you can't accuse them of being a closet global equity index tracker.

BritishInvestor

NedS said:

BritishInvestor said:

Linton said:

Your choice of funds is fine as higher risk for the long term.  It could be argued that 4 global funds is 2-3 more than necessary but it doesnt really matter.  The biggest overlap is probably between the Vanguard and HSBC funds so I think you could dispense with one of these if you really wanted.

If you are happy with the risk you could have a look at a small companies fund as small companies are not well represented in your portfolio at the moment.  You could increase the % in the Baillie Gifford fund a bit, though not too much as it is very focussed.

But all this is marginal.  You seem sensibly invested to me given your circumstances and with your high planned contributions your should be able to look forward to an early and comfortable retirement.

Surely a bit of a stretch to say Lindsell is global when >60% of the holdings are in 10 shares?

You could say that about any high conviction concentrated fund. The clue is in the title, they get to pick from a global universe of equity rather than a more limited space. A lack of diversification maybe, but evidently nothing wrong with picking 25 really great companies from around the world given they have outperformed global equity indicies over the last 5 years (past performance not a guarantee of future returns). At least you can't accuse them of being a closet global equity index tracker.

If you could select the fund managers that would select stocks that would "outperform" in future (it's not really outperforming as you are taking different risks from the overall market) sufficient to overcome the potential downsides around concentration risk (both in terms of number of stocks and sector concentration), style risk (large-cap is very popular currently) and fund manager risk (not sticking to their stated investing style), then you could argue there is a case for going down this road.
And if you can do this, don't waste your time on here, start a hedge fund, as the current firms really struggle to do this, so you'd have a decent edge

Albermarle

tel_ said:

What about the 85k protection for SIPPS - this is where it gets a little confusing for me.

Because LookingForward20 has £117k in a SIPP, is this okay as he has money split in different funds with different providers (Vanguard, Baillie Gifford, HSBC etc) or is this a concern, because all the money is within one platform provider?

The SIPP itself has £85K protection , basically against fraud or gigantic IT blunder .
Then each fund house has similar protection .
If you stick to mainstream platforms and regulated investments then the chance of anything like that happening is very minimal.
Maybe people hold hundreds of thousands of Pounds ,even millions , with one platform.

AnotherJoe

BritishInvestor said:

Linton said:

Your choice of funds is fine as higher risk for the long term.  It could be argued that 4 global funds is 2-3 more than necessary but it doesnt really matter.  The biggest overlap is probably between the Vanguard and HSBC funds so I think you could dispense with one of these if you really wanted.

If you are happy with the risk you could have a look at a small companies fund as small companies are not well represented in your portfolio at the moment.  You could increase the % in the Baillie Gifford fund a bit, though not too much as it is very focussed.

But all this is marginal.  You seem sensibly invested to me given your circumstances and with your high planned contributions your should be able to look forward to an early and comfortable retirement.

Surely a bit of a stretch to say Lindsell is global when >60% of the holdings are in 10 shares?

I'd be very confident that all those ten companies, and indeed the rest, are global, eg their income is spread across the world. I haven't looked them up, but (say) does it matter if Unilever is nominally British but could have been Dutch, and that Apple is American when its products are made in China and India but sold globally, and so on.  There's no need to be global by choosing companies simply on the basis of where their HQ happens to be because that's what makes a global portfolio.   Arm just got taken over by a ?japanese ? company didn't it? Does that mean it's not British any more but Japanese? If Lindsell already held Sony does that mean they should now sell one or the other because they are now too Japanese focussed?