Help me trim my portfolio, please.

MaxiRobriguez

AlanP_2 said:

MaxiRobriguez said:

AlanP_2 said:

MaxiRobriguez said:

Crikey, proper mixed bag there and your distribution of assets isn't the same in the SIPP as it is in the S&S ISA which isn't likely to be ideal for you.

Interested in this point, and would like to understand the rationale?

Specifically this is because the op has admitted they've jumped in at the deep end, and hasn't thought about the allocations.

 The SIPP is 50% emerging markets and 50% Baillie Gifford Managed in which Tesla makes up the biggest single element of the fund. It's quite racy, not really diversified and significantly more prone to volatility than the other wrappers which include a much bigger allocation to bonds and other geographical spread. It makes it much harder to forecast what the different pots will be worth at some point in the future, and therefore makes it harder for the OP to have a gauge on what sort of money he would have available from the ISA before he could crystalise the SIPP, and therefore has no clue on whether his current investments are suitable to meet his investing goals. 

To me, if the OP has a moderately-high risk appetite then both S&S ISA and SIPP should have a broadly similar approach - global equities, with a bit of cash/bonds/gold to reduce volatility and allow for speculative buy the dip. Op can then forecast in mid-single digit gains over a long timeframe to gauge an idea of what they will have in the different pots. Once that's set then the OP can look at whether they want to start moving into the SIPP assets and get the tax relief bonus as it's likely he will have years to draw from the SIPP anyway.

Thanks, but I still don;t see why ISA and SIPP should have broadly the same asset distributions.

I have different asset allocations in mind for pension and ISA investments that change over time, as tax implications and income sources vary. For example ISA would be invested more aggressively than pensions once retired as why would i want higher taxable growth than non-taxable? 

As long as my overall portfolio is at a suitable risk level then I can't see the issue.

 

Difference is your approach is considered, and you know what you want your pots to achieve.

hoofy

MaxiRobriguez said:

AlanP_2 said:

MaxiRobriguez said:

AlanP_2 said:

MaxiRobriguez said:

Crikey, proper mixed bag there and your distribution of assets isn't the same in the SIPP as it is in the S&S ISA which isn't likely to be ideal for you.

Interested in this point, and would like to understand the rationale?

Specifically this is because the op has admitted they've jumped in at the deep end, and hasn't thought about the allocations.

 The SIPP is 50% emerging markets and 50% Baillie Gifford Managed in which Tesla makes up the biggest single element of the fund. It's quite racy, not really diversified and significantly more prone to volatility than the other wrappers which include a much bigger allocation to bonds and other geographical spread. It makes it much harder to forecast what the different pots will be worth at some point in the future, and therefore makes it harder for the OP to have a gauge on what sort of money he would have available from the ISA before he could crystalise the SIPP, and therefore has no clue on whether his current investments are suitable to meet his investing goals. 

To me, if the OP has a moderately-high risk appetite then both S&S ISA and SIPP should have a broadly similar approach - global equities, with a bit of cash/bonds/gold to reduce volatility and allow for speculative buy the dip. Op can then forecast in mid-single digit gains over a long timeframe to gauge an idea of what they will have in the different pots. Once that's set then the OP can look at whether they want to start moving into the SIPP assets and get the tax relief bonus as it's likely he will have years to draw from the SIPP anyway.

Thanks, but I still don;t see why ISA and SIPP should have broadly the same asset distributions.

I have different asset allocations in mind for pension and ISA investments that change over time, as tax implications and income sources vary. For example ISA would be invested more aggressively than pensions once retired as why would i want higher taxable growth than non-taxable? 

As long as my overall portfolio is at a suitable risk level then I can't see the issue.

 

Difference is your approach is considered, and you know what you want your pots to achieve.

That seems to be my main problem, I don't really have a plan of any kind other than to make money from my investments.
I hardly have any out goings in my life, no car, no holidays, no eating out, nothing. No kids to think about either. I have no idea how much money I'll need at what age because I have no idea how long I'm going to carry on working for. When I do retire I intend to hang around the house and do the garden. I don't know if that makes me lucky or sad in other peoples eyes, it's just the way I live.
I'm reluctant to get an IFA involved as I really didn't like the idea of doing so when I started investing a few months ago, and from what I've read on here, I'm even less inclined now.

So do I need a plan before anyone can help or advise me? 

chockydavid1983

You definitely need a plan first, regardless of whether you DIY invest with an IFA.
From your last post, it sounds like you don't have a need for much growth at all so can stick to a pretty conservative approach focussed more on wealth preservation. I use a 2 fund approach with just Global Equities and Global bonds for example.
But you need to estimate things like when you will retire, how much money you will need in retirement etc so you can devise a strategy to achieve what you want to.

hoofy

quirkydeptless said:

HL is expensive for funds, the Multi-Manager-Funds even more so. So in need of a No. 1 cut there rather than a trim 

Right, I'll start there.

I'm going to go with a moderately aggressive theme right through. I honestly can't come up with a plan of when I will need my money, if ever, or how much I'll need, so I'm aiming to get decent returns and I'm aware the market could drop 20/30% overnight. 

So sell the HL Multi-Manager funds in the isa and then transfer the cash to IWeb isa?

AlanP_2

hoofy said:

quirkydeptless said:

HL is expensive for funds, the Multi-Manager-Funds even more so. So in need of a No. 1 cut there rather than a trim 

Right, I'll start there.

I'm going to go with a moderately aggressive theme right through. I honestly can't come up with a plan of when I will need my money, if ever, or how much I'll need, so I'm aiming to get decent returns and I'm aware the market could drop 20/30% overnight. 

So sell the HL Multi-Manager funds in the isa and then transfer the cash to IWeb isa?

A plan is the hardest part when starting out in my experience, and the least exciting. looking at fund factsheets and making comparisons and selections, and then purchasing is much better.

Whilst you can't make a detailed plan you can consider how these investements fit in to your overall situation and a realistic future.

For example if, when you are retired, all your income needs to come from these investments you can estimate how much you would need to withdraw each year pre State Pension and post State Pension. If there are other sources of retirement income add those in to the mix at the relevant points in time. You can then use sday 3.5% withdrawal rate to calculate how large your pots need to be.

If you have "enough" you can be less aggressive than if you need to "double the pots in 5 years" and so on.

Linton

hoofy said:

quirkydeptless said:

HL is expensive for funds, the Multi-Manager-Funds even more so. So in need of a No. 1 cut there rather than a trim 

Right, I'll start there.

I'm going to go with a moderately aggressive theme right through. I honestly can't come up with a plan of when I will need my money, if ever, or how much I'll need, so I'm aiming to get decent returns and I'm aware the market could drop 20/30% overnight. 

So sell the HL Multi-Manager funds in the isa and then transfer the cash to IWeb isa?

Some of your current investments dont seem to fit in with the moderately aggresive theme.  For example:
BG Strategic Bond
Capital Gearing
HSBC Global Strategy Cautious
HL Strategic Bond Trust

One cautious investment may be useful, 4 is excessive IMHO.

Plus if you want a balanced agressive portfolio you will need to check that you have actually covered most of the main global georgraphic and industry sector areas.

And now plans.  I assume the money is for your retirement, well a lot of it must be.  At your age you should have some idea of how much money you will need to retire. This will tell you whether you need to push the aggression level or be more concered with keeping what you have:

So:
1) Choose a retirement date,  you can always change it later
2) How much are you spending now ?  Reduce that by any expenditure you wont need in retirement.  This will give a first pass of how much income you will need in retirement.  But you may what to increase it.
3) From (1) and (2) and your expected level of State Pension it is straightforward to work out how much money you will need to retire at your desired standard of living and chosen retirement date.  If you give us the numbers we can show you how.
4) Can you get that amount of money in the time available from where you are now? What investments do you need to do this safely?
5) You can iterate around (1)-(4) until you have numbers that work and with which you are happy.

quirkydeptless

hoofy said:

quirkydeptless said:

HL is expensive for funds, the Multi-Manager-Funds even more so. So in need of a No. 1 cut there rather than a trim 

Right, I'll start there.

I'm going to go with a moderately aggressive theme right through. I honestly can't come up with a plan of when I will need my money, if ever, or how much I'll need, so I'm aiming to get decent returns and I'm aware the market could drop 20/30% overnight. 

So sell the HL Multi-Manager funds in the isa and then transfer the cash to IWeb isa?

.........

hoofy

1) Retire at 67 although if I was to become unable to do my physical job I would have to retire immediately at 56. I do feel fit as a fiddle atm.
2) If I was to say I spend £250 a week on all my bills and living expenses I don't think I'd be too far out. 
3) I should get full state pension, I've worked from 16 and missed about 3 years NIC. So I should need around £100 a week from my savings if I work to state pension age?
4) I would think I can easily make the £100 a week from the cash I have both in the bank and investments even if I was earning 1% on my money.

So a moderate risk would be the sensible way forward?

AlanP_2

It sounds like you have "won" in the sense that you have enough saved / invested for what you plan on spending once retired so moderate risk makes sense to me. 

What that translates in to as investments is the focus then.

I'd want 1-2 years retirement spend in cash as a buffer against the timing of a market fall working against you. After that I would have the cautious / defensive assets inside the SIPP and the more volatile growth assets outside to minimise future tax liability on withdrawals as you could use ISA dividends / growth first.

Linton

hoofy said:

1) Retire at 67 although if I was to become unable to do my physical job I would have to retire immediately at 56. I do feel fit as a fiddle atm.
2) If I was to say I spend £250 a week on all my bills and living expenses I don't think I'd be too far out. 
3) I should get full state pension, I've worked from 16 and missed about 3 years NIC. So I should need around £100 a week from my savings if I work to state pension age?
4) I would think I can easily make the £100 a week from the cash I have both in the bank and investments even if I was earning 1% on my money.

So a moderate risk would be the sensible way forward?

My maths tells me you have around £235K in total.  If sensibly invested that could reasonably provide an income of about £8K rising with inflation or a bit less assuming you create a significant cash fund to cover large one-off expenses and bad economic times when you may not want to take money from your investments.  So, yes, you are there with your current investments, assuming that they rise with inflation.

But I do not believe you have enough money to stop working now.  You would have 11 years before you got your State Pension which could reduce your pot by approx £9k X 11= £99K.    So that seems to be your major problem - how would you manage if forced to stop workingh through ill health in say the next 5 years?

Unfortunately I see no immediate solution to this.  Higher return investments would take time to bear fruit.  You say you have cash in the bank - would that cover the gap?

Otherwise I would agree with AlanP_2 that relatively cautious investing would make sense.  Perhaps Capital Gearing Trust and a 40% equity multi-asset fund?