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Investment advice for a widow
kWIKSAVE
Posted: 22 December 2017 00:55:39(UTC)
#23

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5 per cent each in the following.

Barratt Developments
Compass Group
National Grid
Unilever
Royal Dutch Shell B
Prudential
Burberry
Intercontinental Hotels Group
Diageo
Lloyds Bank
Weir Group
Dominos Pizza
RPC Group
Polypipe
Astra Zeneca
Severn Trent
Centrica
BT
Tritax Big Box REIT
Worldwide Healthcare Trust
Tim D
Posted: 22 December 2017 13:00:35(UTC)
#24

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kWIKSAVE;54525 wrote:

5 per cent each in the following.
...nice list trimmed...


I like a good fantasy income portfolio as much as anyone... but is this really something you'd dump on a 70-something with no interest in finance and expect them not to run off into the clutches of St James Place or similar the first time one of those "IMPORTANT DOCUMENT... IMMEDIATE ATTENTION...ADVICE" letters to shareholders turns up??? It'd be like someone leaving me a small working farm as a legacy and expecting me to feed myself from it. Bearing in mind the OP's widow might be holding this for another 10-30 years or even more, how "hands off" can you really expect this to be over that time? If you'd compiled such a list 10, 20, 30 years ago where would it be now if left untouched? I've a lot more faith CTY or even L&G's UK Index Trust (an FTSE AllShare tracker) will still be around and in good shape 30 years from now than I do half the stuff in that.

I think there's a lot to be said for the annuity answers, if leaving a legacy isn't a factor. Think of it as a longevity insurance policy.
3 users thanked Tim D for this post.
Captain Slugwash on 22/12/2017(UTC), john brace on 23/12/2017(UTC), martin hargan on 27/12/2017(UTC)
Suzie B
Posted: 22 December 2017 17:02:46(UTC)
#25

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I think I'm a kind of expert on this subject as I am a widow.

Thing to remember guys, is that while your wife may agree agree with you while you are alive she is probably going to develop a mind of her own after you are gone. Depending on what sort of person she actually turns out to be when it comes to money and investing this could have varying consequences.

So keep talking to your wives and try and get them to the stage where they understand for themselves what the family financial position is and some of the basics about money and investing. That way she will be less likely to fall for scams or make basic mistakes which undo all your good work. You can tell her from me it is well worth bothering to listen now rather than finding out for herself afterwards!

Even if you do not believe in financial advice yourself it may be kinder to leave her with the support of a financial adviser or wealth manager who can help her after you are gone. Such a person, carefully chosen by you now can take much of the financial worry off her shoulders at a difficult time in her life when she may not feel able to take decisions alone. If she turns out to be good at investing she can always take back control when it suits her.

You talk as if there was some magic investment strategy that could be set before you die and which would not need reviewing but actually we do not know the future and what is appropriate now may change over time.

Final point, do not under estimate your wife. On the one hand your wife may be better with money than you think. On the other hand, she may turn out to be like my mother in law who was left a fortune of several million in today's money which her husband had very carefully tied up so that she would not spend the capital. His intention was to shelter money from the tax man and pass the capital on to his children in due course, but I have to say he totally underestimated his wife's capacity to unpick it all and spend the lot!
18 users thanked Suzie B for this post.
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kWIKSAVE
Posted: 22 December 2017 17:54:24(UTC)
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Tim D

Yes !

She could set it up on Hargreaves Lansdown with help from her family .

Never sell anything with dividends rolling in.
jeffian
Posted: 22 December 2017 19:14:46(UTC)
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Loved Suzie B's post and it certainly chimes with my experience with My Old Mum. My stepfather, who was quite a lot older than her, died unexpectedly in 1979 leaving her a widow at 56 and although he had done everything for her up to that point, she coped admirably other than the last few years when she went dotty and I took over her affairs under Power of Attorney (another note to self for those prepared to face the inevitable - make sure you have both a PoA and up-to-date Will in place). If my wife tells me she won't be able to cope when the time comes, I just tell her "You will".

Talking of MOM's technique of Masterly Inactivity, Tim D says "If you'd compiled such a list 10, 20, 30 years ago where would it be now if left untouched?". The answer, from my experience, is probably rather better than many professionally-managed portfolios. As I may have bored you with already on another thread, when I took over MOM's role as Trustee of my stepfather's estate, I noted that the performance of the portfolio since 2007/8 crash had been appalling. It just so happened that I had logged all the holdings at 1998 on a spreadsheet but I had never bothered to update it as it was none of my business then but at my first Trustee meeting I was able to show a graph to the 'managers' overlaid on their own performance indicating that if they'd never touched a single thing since 1998, the total portfolio on MOM's death would probably have been worth double what it was! Even if you ignore the ""IMPORTANT DOCUMENT... IMMEDIATE ATTENTION...ADVICE" letters, Tim, things tend to take their course - Rights Issues, ignored, end up with your Rights being sold in the market and cash credited to your account, takeovers ditto. If you have to speak to someone, I find that having a good, commercially-minded accountant is more use than an IFA.
5 users thanked jeffian for this post.
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Chris Dean
Posted: 22 December 2017 20:19:47(UTC)
#29

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Excellent post, Suzie - in particular your comments about a financial adviser - it should be a wake up call.

The very fact that we follow this forum shows that we're all pretty much hooked on 'doing our own thing' investment wise but the chances of a spouse or partner sharing this interest to the same degree are pretty slim. I'm not a huge fan of IFAs or Financial Planners but it's at times like this that they do have their place and assuming you have chosen carefully, then surely its worth sacrificing a few percentage points to ease the strain on a loved one.
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Alan Selwood
Posted: 22 December 2017 20:32:18(UTC)
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Jeffian's post chimes with what John Lee said a year or so back about the portfolios he runs for himself and others for members of his family : those he set up for family members, but which they did nothing with, gained from unexpected growth beyond the point where he sold his own identical holdings, making him realise that he would have done better to pick some good shares then do nothing, even if the companies had a few bad years in a row.

Conversely, you can find examples where the whole investment climate had a major shift of direction, and those who did nothing got left behind. John Galsworthy's Forsyte Saga (which I have mentioned before) showed the disastrous effect on an investment style based on the 19th century's economic climate once it became overwhelmed by the events of the first half of the 20th century, when inflation became a significant factor that made gilts lose value drastically. Similarly, a portfolio set up in the 1960s for a member of my family was clearly behind the times when I first looked at it, at the beginning of the 1980s.

There may be something to be said, in the case of provision for widows and widowers of semi-professional investors, for taking an adaptive, multi-asset approach such as may be found in investment trusts such as Personal Assets Trust, which does at least have someone knowledgeable who can spread risk across equities, fixed-interest bonds, index-linked bonds, gold, etc., and make adjustments based on market conditions and relative valuations. It makes less money in the good years, tends to lose less in the bad years, and keeps the investment style pretty much in tune with the times. Ruffer's RICA is similar in many ways.

You would certainly not want to be 100% equities in a repeat of 1972-74, or 100% gilts in 1972-80; nor would it have been sensible to be 100% cash in that era.
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King Lodos
Posted: 22 December 2017 21:11:03(UTC)
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I remember years back I built a virtual portfolio on Yahoo – it had Reckitt Benckiser, maybe Lockheed Martin, and a few others picked from newspaper shares tips – and forgot about it.

Years later I found the account, and it probably did better – including sailing through the financial crisis – than 99% of managed funds .. But it would've been a volatile ride.

The more actively we trade, the more what we're doing resembles poker .. And like trading, every strategy in poker involves understanding what people do instinctively (even experienced people) .. Therefore: most of what we do is counterproductive .. At least from a returns point of view – a lot of it might reduce risk, and also an important point that recent history plays a huge role in what we consider 'common sense'

Julianw
Posted: 23 December 2017 08:38:33(UTC)
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Fidelity conducted an internal study—a performance review of accounts between 2003 and 2013 to find which accounts did the best.

They found that the best performing accounts were from investors who were DEAD! In second place were investors who had FORGOTTEN they had accounts at Fidelity.
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Alan Selwood
Posted: 23 December 2017 09:56:49(UTC)
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Surprising! I thought that the best performers were supposed to be monkeys throwing at a dartboard (company names replacing numbers)! ;)

I wonder how they would rank compared with dead and forgotten investors?
Sara G
Posted: 23 December 2017 11:00:16(UTC)
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Julianw;54562 wrote:
Fidelity conducted an internal study—a performance review of accounts between 2003 and 2013 to find which accounts did the best.

They found that the best performing accounts were from investors who were DEAD! In second place were investors who had FORGOTTEN they had accounts at Fidelity.


I read that research and my initial reaction was that clearly anything we do as active investors is pointless, but I think there are some caveats...

1. Inevitably dead investors will have done better because their accounts would have been open longer than the rest, and the same would apply to a lesser extent to the forgotten accounts, and the impact of compounding is greater over time (so that the latter years produce the biggest returns).

2. Fidelity only looked at their own accounts, which may or may not be a fair representation of the total investing community.

I agree that much of what investors do has the potential to detract from returns, but this is not the whole story - cutting a loss to reinvest elsewhere or buying more when something becomes cheap or develops momentum may well boost returns significantly.

For me the key takeaway is that (apart from time horizons) what the dead and forgetful investors have in common is that they would not have sold at the bottom or bought at the top, which is what the majority of retail investors tends to do.
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laang lee on 23/12/2017(UTC)
Chris Dean
Posted: 23 December 2017 11:02:20(UTC)
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Ah! ..but they may be dead and forgotten monkeys!!
edward spear
Posted: 23 December 2017 13:57:53(UTC)
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Thanks so far. I have copied and pasted all the replies to a word doc so I have all your views to hand. Clearly I need to do some serious thiking.

Thanks to all who have given me their opinions and experience.

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laang lee on 23/12/2017(UTC)
jeffian
Posted: 23 December 2017 14:26:53(UTC)
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I note several posts above confirming my view that Masterly Inactivity (© My Old Mum) is a valid option for those without the time or inclination to manage their investments. I can add a category to Julianw's "Dead" and "Forgotten" categories - "Sold". I rarely sell but for a time, when I did, I used to run a dummy portfolio into which I placed one share in that company at the price I sold it. Depressingly, it was my best-performing portfolio!
philip gosling
Posted: 12 January 2018 22:17:46(UTC)
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Tim D;54501 wrote:
Considered a nice sensible multi-asset fund as a one-stop-shop? IMHO these are a better and cheaper alternative to having some random IFA/wealth manager try and run the same sort of asset basket for you. A relative with significant holdings in Kames Diversified Monthly Income, Artemis Monthly Distribution and Fidelity Moneybuilder Balanced - picked as reasonably cheap (for actively managed) multi-asset monthly income payers a couple of years ago - seems happy enough with them so far. No portfolio "fiddling" needed; you're paying the fund managers to do that within their funds' holdings.

Income oriented things like the funds mentioned may well generate more income than your wife would need, but I'm guessing she'd be comfortable enough building up cash reserves in the bank with any income surplus. Either that or mix with a multiasset passive like a VanguardLifestrategy or L&G MultiIndex (which will yield less, but probably outperform in the long run due to lower charges) to bring income down to the desired level.

One other thought... the portfolio you're describing contemplating building (UK progressive dividend payers) sounds a lot like it's the sort of thing you can get off the shelf via say City of London IT (or some others like it, but I like CTY's market-leading low charges). Personally I'd much sooner leave my own wife a single big holding in CTY than a menagerie of individual stocks needing ongoing attention. Sometimes it's best to pay someone (by which I mean CTY's management, not an IFA!) to do something for you.




For my wife
I would have thought you should go global and I would and will move my wife into Vanguard Life strategy 100% - she doesn't need cash now and hasn't a clue on funds, ITs. Shares, ETFs, Bonds etc and will not be learning.

She needs a one stop shop. Any ideas better than Vanguard?
Mr Helpful
Posted: 13 January 2018 11:21:11(UTC)
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philip gosling;55320 wrote:

For my wife
I would have thought you should go global and I would and will move my wife into Vanguard Life strategy 100% - she doesn't need cash now and hasn't a clue on funds, ITs. Shares, ETFs, Bonds etc and will not be learning.
She needs a one stop shop. Any ideas better than Vanguard?


If going 100% (Global) Stocks compare the geographical weightings of :-
VLS100 v VWRL (or IWRD which omits EM)
to see which one may be preferred
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philip gosling on 13/01/2018(UTC)
Stephen B.
Posted: 13 January 2018 14:34:19(UTC)
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I would generally agree with the idea of doing nothing, but it isn't always an option. I started investing seriously in the early 90s, and if I think back to how my portfolio looked by the late 90s I doubt that I'd now find anything seriously wrong with it. However, it wouldn't have been an option to just leave it alone, because quite a lot of the investments have just gone - companies have gone bust, merged or demerged etc, investment trusts have wound up, restructured or completely changed their investment remit ... so there wasn't an option that would have involved no admin. On the other hand, I'd be reasonably confident that large global investment trusts will be around for a long time and will give decent, if not spectacular, returns, so if i were looking for a minimum-admin investment that could be largely left alone for a long time I'd probably go for a handful of those.
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Stephen B.
Posted: 13 January 2018 15:06:48(UTC)
#39

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By the way, some time around the end of the 90s I picked an IT portfolio that was intended to be a medium-risk hold-and-forget comparison - I tracked it for a few years but I haven't looked at it for a while. I just had a quick look at what it contained:

Baring Emerging Europe
Fleming US Discovery
Gartmore Smaller Companies
Herald
Henderson Technology (now Polar Tech)
RIT
Scottish Value (now Henderson Alternative Strategies)
Templeton Emerging Markets
TR European Growth
TR Far East Income

It would be interesting to see how it's done - probably fairly well. However - Gartmore Smaller Companies? Anyone know what happened to that?
Mickey
Posted: 13 January 2018 15:31:02(UTC)
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Stephen B.;55344 wrote:
...However - Gartmore Smaller Companies? Anyone know what happened to that?

The name brings a shiver to my spine as I recall Gartmore Govet Oriental :-)
chubby bunny
Posted: 13 January 2018 16:17:26(UTC)
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Stephen B.;55344 wrote:
However - Gartmore Smaller Companies? Anyone know what happened to that?


Seems to have merged with SLS in 2008 - http://citywire.co.uk/mo...-aaa-rated-nimmo/a320546
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Stephen B. on 13/01/2018(UTC)
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