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  • FIRST POST
    • Olivier811
    • By Olivier811 6th Feb 18, 2:22 AM
    • 25Posts
    • 2Thanks
    Olivier811
    27 year old Asset Allocation
    • #1
    • 6th Feb 18, 2:22 AM
    27 year old Asset Allocation 6th Feb 18 at 2:22 AM
    Hi all,

    I have approximately 420,000 in total assets and they are split as follows:

    135,000 cash - in a mixture of high interest current accounts and fixed rate bonds
    285,000 Stocks and Shares - Some in an ISA and some unwrapped. Mixture of ITs, majority in Vanguard Lifestrategy 80 acc.

    I am looking to buy a house and would like a 45,000 deposit. In addition an emergency fund of 20,000. I therefore believe I have too much cash given my age (135-20-45 = 70) and have resolved to drip feed 6,000 every month from tomorrow into VLS80 for 11 months to end up with approximately 80% in stocks which from what Ive read seems a more effective amount (80% stocks, 10% cash, 10% Real Estate).

    Is this 80% stocks a good allocation given my age? Also what are peoples thoughts on holding over 100k in VLS80? Open to going to see an IFA if people think that would be a good idea but also equally happy to do the research and DIY myself.

    Thanks!
    Last edited by Olivier811; 06-02-2018 at 5:23 AM.
Page 1
    • Alexland
    • By Alexland 6th Feb 18, 6:45 AM
    • 2,248 Posts
    • 1,636 Thanks
    Alexland
    • #2
    • 6th Feb 18, 6:45 AM
    • #2
    • 6th Feb 18, 6:45 AM
    There's nothing obviously wrong with what you are doing provided you are investing within you volatility tollerence as it would be a shame to crystallise losses when markets are next low.

    For the property deposit I assume you have done the LTV calculations to ensure you get the best rate on the remaining mortgage balance?

    Also worth considering the use of pensions and LISAs (if you are buying 12 months after the LISA opening date, and/or to help invest for retirement) as appropriate for you circumstances.

    Alex.
    Last edited by Alexland; 06-02-2018 at 6:49 AM.
    • Olivier811
    • By Olivier811 6th Feb 18, 7:18 AM
    • 25 Posts
    • 2 Thanks
    Olivier811
    • #3
    • 6th Feb 18, 7:18 AM
    • #3
    • 6th Feb 18, 7:18 AM
    There's nothing obviously wrong with what you are doing provided you are investing within you volatility tollerence as it would be a shame to crystallise losses when markets are next low.

    For the property deposit I assume you have done the LTV calculations to ensure you get the best rate on the remaining mortgage balance?

    Also worth considering the use of pensions and LISAs (if you are buying 12 months after the LISA opening date, and/or to help invest for retirement) as appropriate for you circumstances.

    Alex.
    Originally posted by Alexland
    Thanks Alex, when you say crystallise losses do you mean sell when the market is low due to needing the money? This is why I have kept plenty of cash aside so hopefully I won't need to touch the money for a fair while.

    Yes I've worked out the best rate for the mortgage and also have a LISA - would you say that 80% equities is a rather large amount? I really don't want inflation to erode my money and keeping it in cash I believe would be at risk of that.
    • Alexland
    • By Alexland 6th Feb 18, 7:30 AM
    • 2,248 Posts
    • 1,636 Thanks
    Alexland
    • #4
    • 6th Feb 18, 7:30 AM
    • #4
    • 6th Feb 18, 7:30 AM
    Thanks Alex, when you say crystallise losses do you mean sell when the market is low due to needing the money? This is why I have kept plenty of cash aside so hopefully I won't need to touch the money for a fair while.

    Yes I've worked out the best rate for the mortgage and also have a LISA - would you say that 80% equities is a rather large amount? I really don't want inflation to erode my money and keeping it in cash I believe would be at risk of that.
    Originally posted by Olivier811
    Remember to keep using the LISA after the property purchase - probably switching from a cash to S&S version.

    80% equities is fine if you can stomach the volatility. From what you say I agree you are unlikely to need to draw upon the investments so the biggest risk is a behavioural error of seeing markets going down, your wealth being significantly erroded, the gripping fear that you have made a huge mistake and this time the markets may drop to zero and then taking action to limit your forward exposure by crystallising losses. If that happens you would have been better in cash or a lower risk choice.

    Alex
    • cloud_dog
    • By cloud_dog 6th Feb 18, 7:40 AM
    • 3,654 Posts
    • 2,174 Thanks
    cloud_dog
    • #5
    • 6th Feb 18, 7:40 AM
    • #5
    • 6th Feb 18, 7:40 AM
    Hi all,

    I have approximately 420,000 in total assets and they are split as follows:

    135,000 cash - in a mixture of high interest current accounts and fixed rate bonds
    285,000 Stocks and Shares - Some in an ISA and some unwrapped. Mixture of ITs, majority in Vanguard Lifestrategy 80 acc.

    I am looking to buy a house and would like a 45,000 deposit. In addition an emergency fund of 20,000. I therefore believe I have too much cash given my age (135-20-45 = 70) and have resolved to drip feed 6,000 every month from tomorrow into VLS80 for 11 months to end up with approximately 80% in stocks which from what Ive read seems a more effective amount (80% stocks, 10% cash, 10% Real Estate).

    Is this 80% stocks a good allocation given my age? Also what are peoples thoughts on holding over 100k in VLS80? Open to going to see an IFA if people think that would be a good idea but also equally happy to do the research and DIY myself.

    Thanks!
    Originally posted by Olivier811
    What is your pension position? Are you a HRT payer?
    Personal Responsibility - Sad but True

    Sometimes.... I am like a dog with a bone
    • Olivier811
    • By Olivier811 6th Feb 18, 7:50 AM
    • 25 Posts
    • 2 Thanks
    Olivier811
    • #6
    • 6th Feb 18, 7:50 AM
    • #6
    • 6th Feb 18, 7:50 AM
    What is your pension position? Are you a HRT payer?
    Originally posted by cloud_dog
    Only pension I have is a personal one with approx 15k in. Not HRT, as currently travelling.
    • Olivier811
    • By Olivier811 6th Feb 18, 7:54 AM
    • 25 Posts
    • 2 Thanks
    Olivier811
    • #7
    • 6th Feb 18, 7:54 AM
    • #7
    • 6th Feb 18, 7:54 AM
    Remember to keep using the LISA after the property purchase - probably switching from a cash to S&S version.

    80% equities is fine if you can stomach the volatility. From what you say I agree you are unlikely to need to draw upon the investments so the biggest risk is a behavioural error of seeing markets going down, your wealth being significantly erroded, the gripping fear that you have made a huge mistake and this time the markets may drop to zero and then taking action to limit your forward exposure by crystallising losses. If that happens you would have been better in cash or a lower risk choice.

    Alex
    Originally posted by Alexland
    Thanks, I will continue with the LISA. I think I have read/researched enough to realise that that is probably the biggest mistake to make investing, so I am in it for the long haul and prepared to stomach the swings.
    • Alexland
    • By Alexland 6th Feb 18, 8:24 AM
    • 2,248 Posts
    • 1,636 Thanks
    Alexland
    • #8
    • 6th Feb 18, 8:24 AM
    • #8
    • 6th Feb 18, 8:24 AM
    Ok that sound fine then. It sounds like our stomachs are about to be tested soon anyway.
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