Tim Hale based plan- comments please?

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  • AnotherJoe
    AnotherJoe Posts: 19,622
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    baj25 wrote: »

    %
    3.5 Vanguard FTSE UK All Share Index Unit Trust Inc
    26.5 Vanguard FTSE Dvlpd World ex-UK Equity Index Inc
    7.5 Vanguard Global Small-Cap Index Fund GBP iNc
    7.5 Vanguard Emerging Markets Stock Index Inc Hedged?
    5 BlackRock Global Property Securities Equity Tracker D (Inc)
    5 Fidelity Institutional Index Linked Bond Inc
    5 Vanguard UK Inv Grade Bond Index Fund GBP Inc
    10 Vanguard Global Bond Index Fund GBP HEDGED Inc
    5 Vanguard UK Sht Term Inv Gde Bd Ind A Fund GBP Inc
    5 Vanguard Global Short-Term Bond Index Hedged (Inc)
    20 cash isa @2.5%

    Reminder of context- mid 50s and good health, still plan on working another couple of years, enough pension income to be comfortable (by our terms), so I'm not looking to squeeze the pips out of this lot. (c.250k all in ISAs, c.4% p.a. drawn). Any alarm bells ring that this is miles off achieving that? Thanks in anticipation of any observations, Brian

    You said in an earlier post "I'm lucky as I have a DB pension and rental income to cover my expenses (I'm also frugal) so I can take more risk than most with my portfolio.".

    This portfolio doesn't fit that at all. Its very conservative. Its like a strangely allocated vanguard 30.
  • Malthusian
    Malthusian Posts: 10,857
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    AnotherJoe wrote: »
    You said in an earlier post "I'm lucky as I have a DB pension and rental income to cover my expenses (I'm also frugal) so I can take more risk than most with my portfolio.".

    This portfolio doesn't fit that at all. Its very conservative. Its like a strangely allocated vanguard 30.

    I count 50% in equities, 30% in bonds and 20% in cash. I also wouldn't call the allocation strange (I would want more in the UK and a lot less in the US but each to their own). It's cautious but I'm not sure why you call it a Vanguard 30.

    Although in theory having a DB pension should make someone more able to take risk, in reality, if you take one person with a DB pension and the exact same person without a DB pension and make them live through a 40% stockmarket crash, psychologically they will react in exactly the same way - if they are going to panic and cash out then both of them will. The difference is that there may be a point at which the non-DB person is forced to cash out, to cover his living expenses, while the DB person may not be. However, if the threshold at which they both panic is higher than the threshold at which the non-DB person is forced to cash in, it is moot. This is why the UK regulator bangs on about your attitude to risk being different from your capacity for loss.

    To answer the OP's question: no, no alarm bells are ringing for me. Is it the allocation I would use - no, is it the best allocation for you - probably not, is it likely to result in disaster - probably not.

    Only thing I would flag up is the lack of commercial property. The BlackRock global property securities fund is not a commercial property fund although people seem to keep treating it as one. It is and behaves like a sector-specialist equity fund.
  • AnotherJoe
    AnotherJoe Posts: 19,622
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    Malthusian wrote: »
    I count 50% in equities, 30% in bonds and 20% in cash. I also wouldn't call the allocation strange (I would want more in the UK and a lot less in the US but each to their own). It's cautious but I'm not sure why you call it a Vanguard 30.

    Because I cant add up :D

    Although in theory having a DB pension should make someone more able to take risk, in reality, if you take one person with a DB pension and the exact same person without a DB pension and make them live through a 40% stockmarket crash, psychologically they will react in exactly the same way - if they are going to panic and cash out then both of them will. The difference is that there may be a point at which the non-DB person is forced to cash out, to cover his living expenses, while the DB person may not be. However, if the threshold at which they both panic is higher than the threshold at which the non-DB person is forced to cash in, it is moot. This is why the UK regulator bangs on about your attitude to risk being different from your capacity for loss.

    I agree but it was the OP who talked about taking more risk - and then packs his allocation with bonds and cash.

    I think its a strange allocation because
    -its got all that defensive stuff in it plus high risk funds,a bit of a contrast?
    -Its got 3.5% FTSE A which is neither here no there (eg why bother?) and because of the nature of the FTSE A means its actually in a handful of very large companies rather than spread across the UK economy as you might think.
    -Its got an emerging markets (adds risk) which is hedged (removes risk)
    -Its very skewed to EM and small cap in equities, yet has all that contrasting defensive bonds (which may not be defensive any more with the ways things are going)


    In summary, and I agree with your analysis of people saying they are high risk but then panicking when markets fall, I think the OP thinks he is high risk, but really is low risk and just wants a little gamble on the side with a bit of EM and small cap.

    Nothing wrong with that, but dont pretend its high risk.

    I think the OP is either conflicted or doesn't know if they really are higher risk.
  • bostonerimus
    bostonerimus Posts: 5,617
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    edited 9 June 2017 at 11:38AM
    AnotherJoe wrote: »
    You said in an earlier post "I'm lucky as I have a DB pension and rental income to cover my expenses (I'm also frugal) so I can take more risk than most with my portfolio.".

    This portfolio doesn't fit that at all. Its very conservative. Its like a strangely allocated vanguard 30.

    That was me....not the OP. I'm approaching 70% equities in a basically 3 fund portfolio and the percentage is drifting up as I've stopped rebalancing. I probably won't let it go above 75%.
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
  • Audaxer
    Audaxer Posts: 3,505
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    I think OP is still making things complicated with all the separate indexes. If keeping 20% in cash, I would think he would get a similar result from putting the other 80% in a VLS60 - that would mean 48% equities, 32% bonds and 20% cash. If the OP thinks the VLS has too much UK equity, he could consider another multi asset passive fund like L&G MI or HSBC Global Strategy instead of VLS as these also include a property index.

    I think trying to drawdown 4% per annum from a multi asset fund would be much more straighforward than drawing from separate index funds to make up the 4% withdrawn, while ensuring the portfolio is still rebalanced to same allocations.
  • baj25
    baj25 Posts: 48
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    The HSBC global fund seems to tick a lot of boxes, I wonder why I've not seen it mentioned here more frequently? Less UK centric than VLS, which in my mind is good, and low fees. I've seen some negative monevator comments about previous higher charging HSBC funds, any glaring downsides with it (they are not jumping out at me)?
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