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Rebalancing ISA - where to start
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My IFA manages my SIPP. This is money I want to control myself. I agree, there is a lot I don’t know. The funds were bought because that sector was thought to be doing well at the time. I’m good at buying, but less good at selling, so I have things I should probably sell and use the proceeds for a general tracker. Some funds have done unbelievably well for many years and I’m happy to keep some money in riskier funds for a higher expected return. What I don’t want to do is buy something that duplicates funds I’ve already got, by investing too heavily in a sector I’m already sufficiently exposed to. I’m also reluctant to sell something that has continuously performed exceptionally well, though I appreciate that carries a risk.
what I’ve learnt from this thread is that I should sell some stuff and invest more in a general tracker. Whereas I thought the answers would be that I am low on sector X and should buy that with the cash in the ISA. So I’ve learnt a lot just from being here.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.1 -
Managing a relatively large number of funds can be difficult and you end up a bit paralyzed. You need to come up with a target asset allocation - say 50% global equities; 10% UK equities; 30% bonds and 10% specialities etc. This should reflect you tolerance for risk and financial goals. Then implement that with as few funds as possible. When I was working I made a rule to never have fund allocations less than 20% of the entire portfolio, apart from cash which I kept between 5% and 10%. This kept the number of funds down and stopped me from speculating too much.
Since retiring I've basically had 3 funds, a global equity tracker, a domestic equity tracker and a multi-asset income fund that owns bonds and dividend companies. The portfolio has had an 11% average annual growth for the last 12 years ie. it has more than tripled in value.
And so we beat on, boats against the current, borne back ceaselessly into the past.2
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