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Rebalancing ISA - where to start

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Comments

  • silvercar
    silvercar Posts: 50,976 Ambassador
    Part of the Furniture 10,000 Posts Academoney Grad Name Dropper

    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.

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  • Bostonerimus1
    Bostonerimus1 Posts: 2,027 Forumite
    1,000 Posts Second Anniversary Name Dropper
    edited 26 March at 9:14PM

    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.
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