Strategies, ideas, does & don'ts for saving, investing and portfolio (incl cash) management

nick5990

wmb194 said:

nick5990 said:

wmb194 said:

nick5990 said:

I am due to receive a few thousand from a passed family members estate.
Without mentioning the total, I am considering splitting it between 25% NS&I fixed term bonds, 25% Cash ISAs, 25% Instant access, and 25% in Stocks and Shares (split between L/T ISA, S&S ISA and a general investment account).
My current S&S investments excluding SIPPs is around £30k. Value of SIPPs is around £14k. Age is 36.
I am not considering adding to my SIPPs since would like to build up savings outside stock market first.
One significant expense I anticipate is another used car which would be £6k+, and cannot presently cover this (without selling stocks / shares), but could do after inheritance received (within circa 3 months).  
I have not used all of my ISA allowance this year, but would consider maxing it out if deemed sensible.
I am torn between safer options but it being eroded by inflation, or riskier & chance to match or be close to inflation over a 10+ year period.
My disposable is around £600 per month of which I was investing £300 in a regular saver (now maxed out & maturing soon), and £50 to £200 variable in stocks & shares (now reduced due to likely car expense in next few months).
I did have a higher risk appetite before the car expense identified (11 plate near end of its life), and now I am a bit more cautious.
I am also slightly concerned about the US in terms of US Stockmarket. Its had a significant bull run over last 10+ years, 50%+ of my £30k is est in there, and would not want it to go up in smoke by 30% over the course of a week for the next black swan event that comes along. I know that being in equities in the long term historically is the right thing to do from what I've read.
 
Would appreciate peoples thoughts given the above - strategies, considerations, ideas, does & don'ts please

75% cash feels far too risk averse to me but it might depend on other factors e.g., how secure you feel in your job. You don't have to be overweight to the US, you could shift to other regions, but American companies earn money all over the world so... *shrug*

Ok, to clarify the 75% is just for the inheritance, not of the whole portfolio

Why are you thinking about it in a silo? Wouldn't it be better to see things in the round?

I don't understand your point can you rephrase please?

wmb194

nick5990 said:

wmb194 said:

nick5990 said:

wmb194 said:

nick5990 said:

I am due to receive a few thousand from a passed family members estate.
Without mentioning the total, I am considering splitting it between 25% NS&I fixed term bonds, 25% Cash ISAs, 25% Instant access, and 25% in Stocks and Shares (split between L/T ISA, S&S ISA and a general investment account).
My current S&S investments excluding SIPPs is around £30k. Value of SIPPs is around £14k. Age is 36.
I am not considering adding to my SIPPs since would like to build up savings outside stock market first.
One significant expense I anticipate is another used car which would be £6k+, and cannot presently cover this (without selling stocks / shares), but could do after inheritance received (within circa 3 months).  
I have not used all of my ISA allowance this year, but would consider maxing it out if deemed sensible.
I am torn between safer options but it being eroded by inflation, or riskier & chance to match or be close to inflation over a 10+ year period.
My disposable is around £600 per month of which I was investing £300 in a regular saver (now maxed out & maturing soon), and £50 to £200 variable in stocks & shares (now reduced due to likely car expense in next few months).
I did have a higher risk appetite before the car expense identified (11 plate near end of its life), and now I am a bit more cautious.
I am also slightly concerned about the US in terms of US Stockmarket. Its had a significant bull run over last 10+ years, 50%+ of my £30k is est in there, and would not want it to go up in smoke by 30% over the course of a week for the next black swan event that comes along. I know that being in equities in the long term historically is the right thing to do from what I've read.
 
Would appreciate peoples thoughts given the above - strategies, considerations, ideas, does & don'ts please

75% cash feels far too risk averse to me but it might depend on other factors e.g., how secure you feel in your job. You don't have to be overweight to the US, you could shift to other regions, but American companies earn money all over the world so... *shrug*

Ok, to clarify the 75% is just for the inheritance, not of the whole portfolio

Why are you thinking about it in a silo? Wouldn't it be better to see things in the round?

I don't understand your point can you rephrase please?

You're talking only the allocation of the inheritance, not looking at your entire portfolio in the round.

nick5990

Update - below for current portfolio.
L/T ISA £21k
S&S ISA £12.5k
General investment accounts £10k)
My current S&S investments excluding SIPPs is around £38k. Value of SIPPs is around £18k. Age is 37.
I have a 2015 scheme NHS Pension, current value est as £1.5k per year, accruing at £0.5k / year, and plan to draw on this between 68 and 72.
I have no holidays planned, but when I do go on them try to keep them under £1k for upto a week duration. Perhaps 4 of these over the next 10 years.
I don't own any property. I am a named beneficiary of a family trust which has one property.
No interest in owning property currently.

I am not considering adding to my SIPPs since would like to build up savings outside stock market first.
One significant expense I anticipate is another used car which would be £6k+. I can now cover this with cash in instant access accounts. Have 12 months plus expenses easily accessible currently.
Rent is £395 / month including bills.
I will have used all of my ISA allowance for the 23/24 tax year.
I am torn between safer options but it being eroded by inflation, or riskier & chance to match or be close to inflation over a 10+ / 20+ year period.
My disposable is around £600 per month of which I am investing £300 in a regular saver (now £2,1k), and £50 to £200 variable in stocks & shares. 
I am also regurlary investing some of the instant access cash into S&S. I plan to reduce contributions to HL and increase to Vanguard over the next 12 months due to the charges.
Now doing £75 / month going into Vanguard LifeStrategy 60% / 80% equity) funds. £50 / month going to WS Blue Whale.
My risk appetite is now higher again following more available cash.

Total portfolio including SIPPs is circa £110k, excluding is circa £97k  
 
Would appreciate peoples thoughts on the revised situation above - strategies, considerations, ideas, does & don'ts please

InvesterJones

nick5990 said:

I am not considering adding to my SIPPs since would like to build up savings outside stock market first.

You don't have to invest in the stock market within your SIPP, you can hold any number of funds that hold other assets in a SIPP as well.

JohnWinder

 £75 / month going into Vanguard LifeStrategy 60% / 80% equity) funds. £50 / month going to WS Blue Whale.'

For a longer term investment strategy that makes no sense to me, so perhaps you can explain it. Meanwhile, here's the problem I see.

Your stocks in the VLS funds are more diversified, much more, and have been less risky (in their volatility, as you'd expect from diversification) than your Blue Whale stocks. Have a look at a cumulative growth chart of both together, which also shows BW with better returns over 5 years, but not three years.

Despite the VLS stocks being less risky than BW, you've decided VLS100 is too risky and gone for VLS60/80, while holding the more risky and more expensive BW fund. It would be cheaper and safer to have more VLS stocks and less in BW stocks if it's stock returns you're after. Over to you.

Secondly, any investing in BW after 2020 is particularly hazardous. By that time it had shown it was an excellent performing fund, substantiated the following year by even better returns. That sort of achievement sucks a lot of performance-chasing money into the fund, great for the fund managers/owners, but sad for the new investors who since early 2021 would have been better off in VLS100 (and paid less in fees as well). The first three stellar years of returns were due to some skill or some luck. If luck it will inevitably run out, and might have; if skill, they've lost it over the last three years they've underperformed VLS100. Relatively few actively managed equity funds have outperformed a comparable index over the longer term that is relevant for equity investing. Do you think BW will be one of them, or do you have an exit strategy for BW to prevent unnecessary losses?

ZeroSum

nick5990 said:

Albermarle said:

50% in US is lower than the size of the US financial markets  globally, so in this respect you are actually underweight in the US. 
Global index trackers typically have around 60 to 65% in US.
Having said that you are not the only one to be a bit nervous about being too reliant on US investments, but it is not normally recommended to reduce the % too far.
As others have said, your pension fund seems too low and when contributing to a pension, you gain tax relief ( if you have enough earned income) 

Ok thanks. I didn't mention my 2015 NHS Pension nor property details previously. They are now added to my initial post

How did you come by your £10k valuation given there's not 'pot' with DB pensions?

DoublePolaroid

I am contributing to an NHS pension which will cover my expenses plus more by the time I plan to retire. I therefore view my capacity (as distinct from my appetite) for risk to be very high as even in the event of an unprecedented and sustained market meltdown, I won’t have to get the begging bowl out. I therefore invest as much as I can in equities. 

Making a couple of basic assumptions based on your latest post - namely that your annual pension accrual doesn’t increase over thirty years (which is probably a worst case) and that you continue to contribute to the NHS scheme until retirement - you will have a guaranteed annual inflation-proof income of circa £30k in today’s money for life when factoring the addition of SP when you plant to retire. 

If you estimate that that amount would cover your basic needs, then you may want to consider if your capacity for risk with your savings is higher than you think it is, especially given an investment horizon of 30+ years.