FTSE100 best single year return since 2009.

Veloflyer

chiang_mai said:

GazzaBloom said:

I cam across this one liner the other day:

Minimalist Investing Philosophy: own the world, keep fees low, stay the course.

It's hard to argue with as a lifetime investing philosophy and could be facilitated by simply holding a global market cap weighted index fund.

By the time I reach my 70s If I felt the need to be building my own trackers and making constant portfolio adjustments then it would suggest something went seriously wrong with my retirement planning.

Without a doubt. The difficulty is, I'm already 75 and I don't have the recovery years ahead of me that will almost certainly be needed, if markets crash in a big way and those indicies fall far.

I'd agree with the basic philosophy in bold. Much of my (uncrystallized) pot is in 5 global trackers - VWRP for example. I have 5 to simply spread the risk. Not sure how wise that is. I am a simple soul and don't have much financial experience, but I'd like to think I have a modicum of common sense.

I too am twitchy about a crash, but I have come to realize that as long as I am in equities, that will always be the case. I need to seriously think about ILGs/annuity and act - preferably before any crash!

A pearl of wisdom I keep seeing is for basic retirement needs, preserve that part of the pot - via ILGs/annuity - that will fund them. The rest is beer money - which may still be kept in equity to hopefully grow.      

kempiejon

I like the idea of holding the world, but a global cap weighted tracker isn't the world. I recall traded equities aren't the biggest market. I look at credit/debt, private equities, government bonds, gold, commodities, property.

Veloflyer

kempiejon said:

I like the idea of holding the world, but a global cap weighted tracker isn't the world. I recall traded equities aren't the biggest market. I look at credit/debt, private equities, government bonds, gold, commodities, property.

Perhaps, but a global tracker is very simple to invest in. For simple souls like me, it represents an easy way to invest in a reasonably sound manner. 

chiang_mai

kempiejon said:

I like the idea of holding the world, but a global cap weighted tracker isn't the world. I recall traded equities aren't the biggest market. I look at credit/debt, private equities, government bonds, gold, commodities, property.

FWIW I'm not purposely holding the world. I'm holding the US markets, diluted by a further 40% of the world, as protection of sorts.

chiang_mai

kempiejon said:

I like the idea of holding the world, but a global cap weighted tracker isn't the world. I recall traded equities aren't the biggest market. I look at credit/debt, private equities, government bonds, gold, commodities, property.

Holding the World will allow you to diversify your equities but to diversify all your assets you will need to buy into other asset classes, such as the ones you have mentioned, each of which carries their own degree of risk. I would suggest that governement bonds will be much lower risk whilst private credit and gold are potentially higher. Buying a World equities tracker is indeed holding the world, but only the equities world. 

GazzaBloom

Stay the course is where many fall. Constant fear of crashes leading to portfolio adjustments, increasing transaction costs and being out of the market at the wrong times.

To be able to see the fluctuating market value of an asset by the second each and every day is a benefit of technology, but is also a curse for tempting erratic and impulsive human behaviour.

chiang_mai

GazzaBloom said:

Stay the course is where many fall. Constant fear of crashes leading to portfolio adjustments, increasing transaction costs and being out of the market at the wrong times.

To be able to see the fluctuating market value of an asset by the second each and every day is a benefit of technology, but is also a curse for tempting erratic and impulsive human behaviour.

When markets are booming, many over invest, when markets fall, many sell. In one direction it's the fear of missing out, in the other is the fear of loss. Trying to find the constant level at which we're comfortable, is not always easy, it's whatever number let's you sleep at night. A good starting point is to make sure you have put aside two years of income, what's left can be divided into the different asset classes of high low and medium, risk. For an older person, that might be say 60% equities, 30% bonds and 10% money market. Within the 60%, it makes sence to sub divide once again, according to risk levels, 20% High, 40% Medium and 40% Low....or whatever combination suits your risk tolerance.