Balanced Investment Strategy During Drawdown?

JamesP8

I am currently reviewing my initial diy investment strategy for drawdown, I will be maintaining both the drawdown and an uncrystallised accumulation pot. Currently all funds are temporarily allocated to a multi-asset option, whilst I consider my next steps. 
Would anyone recommended any particular reading material to assist me in making a balanced selection of funds, or perhaps would have any suggestions as to an approach, at least initially please?  From a risk/return perspective I would say middle to high. Many thanks.

AlanP_2

What's wrong with the multi-asset fund, why do you need to change?

Thrugelmir

Start with reading

The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns (Little Books. Big Profits)  - John Bogle

Mean while remain with a multi asset fund. 

BritishInvestor

JamesP8 said:

I am currently reviewing my initial diy investment strategy for drawdown, I will be maintaining both the drawdown and an uncrystallised accumulation pot. Currently all funds are temporarily allocated to a multi-asset option, whilst I consider my next steps. 
Would anyone recommended any particular reading material to assist me in making a balanced selection of funds, or perhaps would have any suggestions as to an approach, at least initially please?  From a risk/return perspective I would say middle to high. Many thanks.

You mention a selecting funds which implies you have jumped to the final stage in the retirement planning process. 
1. What's the cost of your ideal lifestyle throughout the next stages of your life (including big ticket items)
2. Creation of a plan to evaluate how feasible the lifestyle is given the desired withdrawals
3. Creation of a portfolio to ensure you are taking the right amount of risk to ensure you don't run out of money in retirement and are happy to stick with the plan in times of market volatility.

[Deleted User]

https://books.google.ca/books/about/Rational_Expectations.html?id=N4aUoAEACAAJ&source=kp_book_description&redir_esc=y

green_man

I’m in the same position as you JamesP8

i have read quite a bit about various strategies. The strategy I currently like best which I intend following is:

Funds for 20years plus away:
(I am only 55 so this is a separate consideration) in a high equities global fund (equivalent to something like VLS95 if such a thing existed)

Drawdown funds for next 20 years:
Core fund  in mid equities Multi asset fund (In my case I’m using HSBC GS Balanced)
3 years worth of Cash
Same amount as in cash split between Global Smaller companies fund and Emerging Market fund.  This is to offset the drag of the cash element, and overall maintain a rough 60/40 equivalent risk profile.


Whatever you read there is no right answer that suits everyone (though there may be some wrong answers). 

Audaxer

JamesP8 said:

Currently all funds are temporarily allocated to a multi-asset option, whilst I consider my next steps. 

I think keeping the portfolio as one low cost globally diversified multi asset fund is a good option. I would go for medium risk with a multi asset fund containing around 60% equities, which should hopefully support a drawdown rate of around 3.5% plus inflation each year.

If you don't want all your portfolio in the one multi asset fund, I don't see anything wrong with splitting it between two similar risk multi asset funds.

JamesP8

green_man said:

I’m in the same position as you JamesP8

i have read quite a bit about various strategies. The strategy I currently like best which I intend following is:

Funds for 20years plus away:
(I am only 55 so this is a separate consideration) in a high equities global fund (equivalent to something like VLS95 if such a thing existed)

Drawdown funds for next 20 years:
Core fund  in mid equities Multi asset fund (In my case I’m using HSBC GS Balanced)
3 years worth of Cash
Same amount as in cash split between Global Smaller companies fund and Emerging Market fund.  This is to offset the drag of the cash element, and overall maintain a rough 60/40 equivalent risk profile.


Whatever you read there is no right answer that suits everyone (though there may be some wrong answers). 

Many thanks, this is very helpful. I am also 55, am maintaining two years cash cover and will have a DB pension starting within the next five years, so some future back-up available. When DB is taken I will have used balance of current LTA, so uncrystallised balance within SIPP predicted to fall fully in excess of LTA. A conundrum.

hyperhypo

OP, i'm also doing something v. similar to green_man...i've just transferred my old work sipp drawdown to fidelity ...as cash ..and am proposing to lay it out thus:

10% cash

40% Vanguard LS40

40% HSBC Global Balanced

10% Baillie G Global Discovery

The cash element is for next tax year's personal allowance, thereafter a DB scheme commences at aged 63 and i'll use some PCLS to fund up until my SP age.

One of the reasons for my transfer was to potentially use ..as  alternative to above...a set of Investment Trusts to do the same job...an aspirational 3.5% ..and my old scheme didn't provide these. But i need to do more homework on constructing a set of  ITs to provide an alternative strategy.

green_man

JamesP8 said:

green_man said:

I’m in the same position as you JamesP8

i have read quite a bit about various strategies. The strategy I currently like best which I intend following is:

Funds for 20years plus away:
(I am only 55 so this is a separate consideration) in a high equities global fund (equivalent to something like VLS95 if such a thing existed)

Drawdown funds for next 20 years:
Core fund  in mid equities Multi asset fund (In my case I’m using HSBC GS Balanced)
3 years worth of Cash
Same amount as in cash split between Global Smaller companies fund and Emerging Market fund.  This is to offset the drag of the cash element, and overall maintain a rough 60/40 equivalent risk profile.


Whatever you read there is no right answer that suits everyone (though there may be some wrong answers). 

Many thanks, this is very helpful. I am also 55, am maintaining two years cash cover and will have a DB pension starting within the next five years, so some future back-up available. When DB is taken I will have used balance of current LTA, so uncrystallised balance within SIPP predicted to fall fully in excess of LTA. A conundrum.

To be clear, don’t take my post as any form of recommendation, but it is useful sometimes to see what other people are doing.  Everyone tends to do something a bit different depending on: your knowledge level;  how active or involved you want to be; how much risk you want to take; how old you are; how much money you have; what drawdown rate you need/want etc etc.

it’s useful considering a number of options until you find one that You feel happy with.

JamesP8

green_man said:

JamesP8 said:

green_man said:

I’m in the same position as you JamesP8

i have read quite a bit about various strategies. The strategy I currently like best which I intend following is:

Funds for 20years plus away:
(I am only 55 so this is a separate consideration) in a high equities global fund (equivalent to something like VLS95 if such a thing existed)

Drawdown funds for next 20 years:
Core fund  in mid equities Multi asset fund (In my case I’m using HSBC GS Balanced)
3 years worth of Cash
Same amount as in cash split between Global Smaller companies fund and Emerging Market fund.  This is to offset the drag of the cash element, and overall maintain a rough 60/40 equivalent risk profile.


Whatever you read there is no right answer that suits everyone (though there may be some wrong answers). 

Many thanks, this is very helpful. I am also 55, am maintaining two years cash cover and will have a DB pension starting within the next five years, so some future back-up available. When DB is taken I will have used balance of current LTA, so uncrystallised balance within SIPP predicted to fall fully in excess of LTA. A conundrum.

To be clear, don’t take my post as any form of recommendation, but it is useful sometimes to see what other people are doing.  Everyone tends to do something a bit different depending on: your knowledge level;  how active or involved you want to be; how much risk you want to take; how old you are; how much money you have; what drawdown rate you need/want etc etc.

it’s useful considering a number of options until you find one that You feel happy with.

Thanks again, as you say, it's very useful to get a view as to the approach others are taking.