Your opinion please

Albermarle

 Buying shares in few companies with high dividends payment ( over 4%), which will be enough to cover my expenses

You might be better off buying a fund or Investment Trust that specialises in holding high income producing company shares. Although you would pay a fee, it would be easier to manage and less time consuming.

Audaxer

Ivkoto said:

kinger101 said:

Ivkoto said:

kinger101 said:

Ivkoto said:

kinger101 said:

It's diversified in that it's a global index tracker.  And then it's not as it is 100 percent equity.  Which might not be a problem, but that depends on (a) attitude toward risk, (b) capacity for it and (c) what other investments you have.

I'm 100 percent equities in my DC scheme and will likely only dual down slightly nearer retirement.  But SP and DB will be enough for my basic income.  

As for hedged, it is more expensive so on probability, you will lose over the long term.

Other than that, the unhedged version is likely very similar to what I and many others wanting a low cost passive fund hold.

Thank you for the comment. 

a) the attitude towards risk is the highest possible imo

b) I am not sure if the question is this, but at the moment I am able to put around £1200 a month with about 10% increase each year for at least 10 years ( in 10-12 years thinking to stop working)

c) my other investments are split in :

83% - developed countries equity fund ex UK

7% - UK equity fund

10% - EM equity fund

The capacity bit (b) is partly related to (d) timeline, but it's a question of how well you could cope if say equities dropped say 50%?  Near or during retirement, it's probably not a position I'd want to be in, so I'd have some other assets which I could use so I don't necessarily have to draw down at the bottom.

Ok I see what you mean. From what I learned from this forum I will probably consider two options. 

1. Keeping cash for at least 2 years and when bad times come for the markets using it and when recover (even not fully) to top it up

2. Buying shares in few companies with high dividends payment ( over 4%), which will be enough to cover my expenses


Unfortunately I'll not have any other assets. 

Option 2 means your portfolio will then be restricted to companies which pay dividends.  As well as excluding growth companies, you'll end up with geographic bias.  In many countries share buybacks are more common (e.g, USA).  If the stockmarket did crash massively, lots of companies would also choose not to pay dividends.  

Thank you for your feedback. 
I have long way to go and definitely I will reconsider my options. 
I expect my pot to be around £300k at the time when I'll be considering stop working. I'll be happy enough to live with around £12k a year in today's money worthiness (hopefully I won't be living in UK at that time) if everything stays roughly the same with exchange rates and prices. I won't be paying any rent or mortgage, so I need to make my pot working for me and deliver that amount without much reduction of the capital.
Also I'll be 10 to 12 years away before the SP kicks in ( it will be the maximum amount if I work for another 9 years ). 

If you want to draw the equivalent of £12k income annually in say 10 years time, you will probably need a bigger pot than £300k if looking to draw 4%. If for example after 10 years inflation you need about £15k a year as a starting income, you may need a pot of £375k.

Ivkoto

Audaxer said:

Ivkoto said:

kinger101 said:

Ivkoto said:

kinger101 said:

Ivkoto said:

kinger101 said:

It's diversified in that it's a global index tracker.  And then it's not as it is 100 percent equity.  Which might not be a problem, but that depends on (a) attitude toward risk, (b) capacity for it and (c) what other investments you have.

I'm 100 percent equities in my DC scheme and will likely only dual down slightly nearer retirement.  But SP and DB will be enough for my basic income.  

As for hedged, it is more expensive so on probability, you will lose over the long term.

Other than that, the unhedged version is likely very similar to what I and many others wanting a low cost passive fund hold.

Thank you for the comment. 

a) the attitude towards risk is the highest possible imo

b) I am not sure if the question is this, but at the moment I am able to put around £1200 a month with about 10% increase each year for at least 10 years ( in 10-12 years thinking to stop working)

c) my other investments are split in :

83% - developed countries equity fund ex UK

7% - UK equity fund

10% - EM equity fund

The capacity bit (b) is partly related to (d) timeline, but it's a question of how well you could cope if say equities dropped say 50%?  Near or during retirement, it's probably not a position I'd want to be in, so I'd have some other assets which I could use so I don't necessarily have to draw down at the bottom.

Ok I see what you mean. From what I learned from this forum I will probably consider two options. 

1. Keeping cash for at least 2 years and when bad times come for the markets using it and when recover (even not fully) to top it up

2. Buying shares in few companies with high dividends payment ( over 4%), which will be enough to cover my expenses


Unfortunately I'll not have any other assets. 

Option 2 means your portfolio will then be restricted to companies which pay dividends.  As well as excluding growth companies, you'll end up with geographic bias.  In many countries share buybacks are more common (e.g, USA).  If the stockmarket did crash massively, lots of companies would also choose not to pay dividends.  

Thank you for your feedback. 
I have long way to go and definitely I will reconsider my options. 
I expect my pot to be around £300k at the time when I'll be considering stop working. I'll be happy enough to live with around £12k a year in today's money worthiness (hopefully I won't be living in UK at that time) if everything stays roughly the same with exchange rates and prices. I won't be paying any rent or mortgage, so I need to make my pot working for me and deliver that amount without much reduction of the capital.
Also I'll be 10 to 12 years away before the SP kicks in ( it will be the maximum amount if I work for another 9 years ). 

If you want to draw the equivalent of £12k income annually in say 10 years time, you will probably need a bigger pot than £300k if looking to draw 4%. If for example after 10 years inflation you need about £15k a year as a starting income, you may need a pot of £375k.

Thanks Audaxer! 
When I said I am expecting the pot to be around £300k,  I didn't calculate any growth during the next 10 years. Hopefully there will be more than £375k 🙂

We went a bit of topic 🙃

I have not many choices with my workplace pension and this is why I asked the questions, about the fund. Instead of splitting the investments and trying to diversify them myself, will it be better if I use this fund? How good is the percentage between the large, medium and small cap?