Portfolio thoughts please..

Hoenir

Dh6 said:

In my mind the bond fund can fall dramatically as we’ve seen recently but the individual gilt won’t. In my mind I want a really safe haven for my risk off side of the portfolio. It’s no good to me if bonds and equities go down together.

 If interest rates rise then both bonds and equities (broadly speaking) will fall. As both for entirely different reasons are impacted by this event. You've witnesses bond funds fall in value dramatically. Do you understand why?  Do you understand the mechanics of Government Bonds also the the term Mark to Market. Equities one day will go on a roller coaster ride of their own. Depending upon which segments of the markets you own, this can be a bruising and financially expensive exercise. 

Dh6

CheekyMikey said:

At your age I wouldn’t be considering adding anything but equities to my portfolio for another 20 years…that’s what I did and it worked for me, but do what you feel comfortable doing.

I’m averaging into the market monthly, I’m aware the circumstances that have led to the performance of the global equity indexes over the last 15 years or so most probably will never happen in my lifetime. 

Dh6

My thoughts exactly, with fifteen years to go you could definitely extend your mortgage to fund the best phones and TV subscriptions

Due to my personal circumstances of being self employed I spent my 20’s and early 30’s concentrating on paying off my mortgage hence why we didn’t start our investment journey until around 32. Other than my mortgage I’ve never had any debt, I was brought up with the mentality to save for something if you wanted it.

Dh6

 If interest rates rise then both bonds and equities (broadly speaking) will fall. As both for entirely different reasons are impacted by this event. You've witnesses bond funds fall in value dramatically. Do you understand why?  Do you understand the mechanics of Government Bonds also the the term Mark to Market. Equities one day will go on a roller coaster ride of their own. Depending upon which segments of the markets you own, this can be a bruising and financially expensive exercise. 

Thanks Thrugelmir. I broadly understand why interest rates affect both equities and bonds and why the bond funds have fallen recently. 

I also broadly understand how government bonds work but haven’t owned any bonds whatsoever mainly due to my age but also the fact that I won’t invest in something I don’t fully understand. 

Having invested through the Covid pandemic I would say that I’ve already experienced a roller coaster ride with my equities but I’m relaxed about their volatility and I’m aware that the vast majority of my contributions are yet to be made.

Owning the whole index I would say that I own most segments of the market already. I’ve also done my homework regarding the index funds before I invested in them and I’m aware of the concentration in the US and in particular US tech giants.

Im happy to read opposing arguments to passive indexing so that I’m not a victim of confirmation bias.

DH

Hoenir

Dh6 said:

 If interest rates rise then both bonds and equities (broadly speaking) will fall. As both for entirely different reasons are impacted by this event. You've witnesses bond funds fall in value dramatically. Do you understand why?  Do you understand the mechanics of Government Bonds also the the term Mark to Market. Equities one day will go on a roller coaster ride of their own. Depending upon which segments of the markets you own, this can be a bruising and financially expensive exercise. 

Having invested through the Covid pandemic I would say that I’ve already experienced a roller coaster ride with my equities but I’m relaxed about their volatility 

I admire your optimism. Though it's unlikely that you'll be able to rely on Central Banks policies to help inflate asset prices the next time around.  As an investor you'll never stop learning. 

For context I bought shares in the very first private equity trust in the UK when it launched in 1981!  

GazzaBloom

Hoenir said:

Dh6 said:

In my mind the bond fund can fall dramatically as we’ve seen recently but the individual gilt won’t. In my mind I want a really safe haven for my risk off side of the portfolio. It’s no good to me if bonds and equities go down together.

 If interest rates rise then both bonds and equities (broadly speaking) will fall. As both for entirely different reasons are impacted by this event. You've witnesses bond funds fall in value dramatically. Do you understand why?  Do you understand the mechanics of Government Bonds also the the term Mark to Market. Equities one day will go on a roller coaster ride of their own. Depending upon which segments of the markets you own, this can be a bruising and financially expensive exercise. 

Can I smell a sock?

Dh6

Hoenir said:

Dh6 said:

I admire your optimism. Though it's unlikely that you'll be able to rely on Central Banks policies to help inflate asset prices the next time around.  As an investor you'll never stop learning. 

For context I bought shares in the very first private equity trust in the UK when it launched in 1981!  

If by optimism you mean I expect the 10% plus returns year on year on the global equity indexes from 2009 until recently, fuelled by QE, the answer is, I’m not!

By my calculations I can achieve my goals with a much smaller % return above inflation. 

Thanks for the reminder that we never stop learning, this is a fact that I’m already aware of!

Hoenir

Dh6 said:

Hoenir said:

Dh6 said:

I admire your optimism. Though it's unlikely that you'll be able to rely on Central Banks policies to help inflate asset prices the next time around.  As an investor you'll never stop learning. 

For context I bought shares in the very first private equity trust in the UK when it launched in 1981!  

If by optimism you mean I expect the 10% plus returns year on year on the global equity indexes from 2009 until recently, fuelled by QE, the answer is, I’m not!

Actually it wasn't. Related purely to the Covid era experience you alluded to.