Portfolio Critique Help

masonic

aroominyork said:

masonic said:

flopsy1973 said:

There is the good possibility that i will not need it in next few years if we decide not to move and i dont want this money sitting in cash ISA doing nothing and thought the next best thing would be WP ??

If you might need the money to move house within the next few years, then I don't think such WP funds are appropriate - they are generally about 40% equities and the balance is mostly medium risk assets, so the probablility of a loss over a few years is not negligible! A 20-30% loss would, I think, be in the realms of possibility.

'Possible' is a broad term, whether or not within the dominion of a realm. You, Flopsy and I have today been on a thread I started about Capital Gearing Trust, and I think a huge number of things would have to go wrong for it to deliver a 30% loss over a few years. 

I was using the 1973-1974 crash and its effect on a 40:60 portfolio as an example of the worst case scenario. Your own guestimates in the other thread of 40% for equities (which Linton upped to 50%) and 15% for bonds would give a loss of 25% (using 40% for equities) or 29% using 50%, so I'm surprised you think 30% is beyond the pale. I think bonds as a general asset class probably have a higher loss potential than 15% in the current climate, but hopefully the positioning of WP funds avoids the most sensitive parts of the asset class.

We might assume (and hope) the strategies at play within CGT will skilfully avoid the worst of a severe crash, but it's not something I'd take for granted.

masonic

flopsy1973 said:

masonic said:

flopsy1973 said:

Yes but there may be no house move either and if we did decide maybe we would only need around 200K. I did not want this money sitting doing nothing and as it part of my pension provision need to do something with it ?

It's hard to make useful suggestions while information is being drip-fed. If you only (maybe) need £200k cash and you have £425k now, you could keep £200k in cash and invest the rest alongside your other pension provisions. Or you could invest all £425k in WP funds and accept there is a risk it might only be worth £300k when you need to access it and that you'll be crystallising an £83k capital loss to raise that £200k. Of course the loss might be smaller than that or you might be in profit. Such is the unpredictability of medium risk investments and why the general wisdom is they should be held for a minimum of 5 years.

Have you considered sitting down with an IFA and making a proper financial plan? With the amounts under consideration it would be good value for money and may give you peace of mind.

I have sat down with IFA  but didn't really feel he could offer me much more than what I was doing now with high fees on top , also saw FA and he suggested VCT to offset my income tax and suggested a investment bond for my holdings !!!!

That sounds very disappointing.

flopsy1973

It is because there is not much choice in my area and ones I have have left me with nasty taste in my mouth hence being in the position I am now so grateful for suggestions?

flopsy1973

So what could I do with this to protect it from inflation 

masonic

flopsy1973 said:

So what could I do with this to protect it from inflation 

There is no way to get a guaranteed return higher than inflation with investments available to buy today. There is no way to beat inflation over the next couple of years with a high degree of confidence. The available investments that can keep up with inflation have considerable downside risk in the short term. Demand for assets that have a degree of inflation protection has pushed up their prices already. Over the medium term (5+ years) you have options, as discussed above.

london21

Interesting responses.
Try to increase your pension (Tax benefits)
possibly real estate to diversify portfolio
You seem to prefer active funds and risk score of 6 high risk appetite. 
I prefer passive funds to active ones.
I prefer the ones with less fees <0.1%
I prefer to diversify but realised that US funds doing better than UK ones at present but long-term will balance out i suppose.
I am 31 and my top 2 performing funds at present are Legal & General US Index  and Legal & General International Index Trust.

flopsy1973

masonic said:

flopsy1973 said:

So what could I do with this to protect it from inflation 

There is no way to get a guaranteed return higher than inflation with investments available to buy today. There is no way to beat inflation over the next couple of years with a high degree of confidence. The available investments that can keep up with inflation have considerable downside risk in the short term. Demand for assets that have a degree of inflation protection has pushed up their prices already. Over the medium term (5+ years) you have options, as discussed above.

So I am back to finding suitable investments as per rest of my portfolio that needs work ? 

flopsy1973

On the pensions thread I have asked this question but yes plan to hopefully retire at 60 so most of this money can be invested.  We have combined mortgage debt of about 37k 
So yes urgently need to get this working for me