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Don't hold back- but don't be too cruel when looking at my portfolio
eain
Posted: 02 March 2018 12:11:02(UTC)
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I am stopping work along with my wife this summer. Teaching is not the job it used to be and we want to do some living !

We have ISA's to the value of £243K between us.

We have enough cash to see us through to me taking teachers pensions in 4 years time, this is a combination of my SIPP (80K and in cash) and a cash holding of £90K. At 60 I'll get my pension of £20 K per year plus a tax free lump of £60K. I will buy four more pension years to get full state pension when the time comes.

One year after I get my teachers pension my wife will draw on her SIPP from 55 until she hits 60 when she'll draw her teachers pension of about £16K per year plus a tax free lump of £45K. We'll also buy 5 more years to get her a full state pension.

We have an income requirement of £30K per year, we reckon if not less, we are quite frugal-
don't have a big car, no debts and no mortgage. We value the great outdoors and simple things in life.

We want to dip in and out of the ISA holdings from time to time , this would be to fund some big trips/adventures- mostly big cycle tours and treks until our bodies give in and demand more luxury.

Currently all of our ISA's are IT's and are a real jumble, not too much planning or science so I wanted to ask the forum what would you do if it was your portfolio? Don't hold back, but don't be too cruel please.

The breakdown at present is :


CTY - 20% City of London
HNE- 5% Henderson Eurotrust
HFEL- 21% Henderson Far East Income
MRCH- 13% Merchants Trust
MRC- 6% Mercantile Investment Trust
LWI-8% Lowland Investment Trust
HHI-8% Henderson High Income
FGT-14% Finsbury Growth and Income


Thanks all, this forum is great reading and some really knowledgeable people. I have had a rather haphazard approach to things I am afraid.





2 users thanked eain for this post.
Dian on 03/03/2018(UTC), Guest on 04/03/2018(UTC)
Mickey
Posted: 02 March 2018 12:39:58(UTC)
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Hi,
I suspect you will get by on less than 30k a year but it is a good starting point imho. My wife was made redundant and we decided to enjoy life a bit more, I am not working and neither if us is yet at retirement age. We have cut bills quite easily, sold one of the cars and bimble around in an old one.

For me, the first thing to do is decide on how much risk you are willing to take and whether you want income, growth or both. Remember if you need cash then you can sell rather than rely on dividends.

John Baron holds 4.5% of HFEI in his Summer and Autumn portfolios which may suggest you are a bit heavy there. You can sign up for a 7-day free trial of his stuff at http://www.johnbaronportfolios.co.uk/

I find that he holds too many IT's in his portfolios for me but a 7-day look around will give you some great ideas I think. I actually subscribed for a year but am not convinced that I need to renew, that may change of course. The cost of subscription is £170 a year, easily made back if he gets things right of course. My subscription was paid-for quickly following his tips but perhaps I would have made that anyway, who knows?

Your holding of CTY at 20% seems high to me unless you want the dividends, I prefer FGT which you hold already. Perhaps remove CTY and think about one of the Baillie Gifford Trusts such as Scottish Mortgage, Monks etc. if you can stomach some volatility. This would also give scope to add some Smaller Companies or perhaps Mid Cap, I like Henderson Smaller Co's (HSL) and JPMorgan Mid Cap (JMF)

Best of luck with retirement!



6 users thanked Mickey for this post.
dlp6666 on 02/03/2018(UTC), colin fellowes on 02/03/2018(UTC), Mike L on 02/03/2018(UTC), gillyann on 02/03/2018(UTC), Dian on 03/03/2018(UTC), Rickenbacker Al on 04/03/2018(UTC)
Keith Hilton
Posted: 02 March 2018 14:04:05(UTC)
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Your portfolio is very UK centric, with nothing in the US or Japan. The UK holdings contain many of the same companies, such as, Shell, HSBC, Glaxo, so there's scope to consolidate these. MRCH has been a poor performer, as has CTY recently. I'd review these along with HHI.

I'd also agree with Mickey about keeping FGT, but as it has a fairly concentrated portfolio, you might want to keep another more diversified UK fund alongside.

As your ISA appears to be for occasional expenses, rather than regular income, there's scope to introduce some more growth orientated funds, rather than just high yielders. You can always sell shares if you need more income.

Also, it might be worth considering diversifying into some themes, such as, commercial property, infrastructure, renewables, private equity, technology, biotech, healthcare etc.
Keith Cobby
Posted: 02 March 2018 18:40:38(UTC)
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I sold all my UK Equity Income trusts (including FGT which is the only one I keep on my watchlist) because I was concerned the requirement to provide yield was influencing the managers to buy shares with unsustainable dividends. Sales included City of London, Lowland, Henderson High Income, and I reinvested in global and asian trusts. I note that you have (as I did) quite a few of the Henderson trusts. Some of the sale proceeds I topped up Bankers which I have held for decades and really like.
4 users thanked Keith Cobby for this post.
Dian on 03/03/2018(UTC), eain on 03/03/2018(UTC), Martina on 03/03/2018(UTC), what me, worry? on 04/03/2018(UTC)
Mr Helpful
Posted: 03 March 2018 11:12:22(UTC)
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eain;58081 wrote:
I am stopping work along with my wife this summer.
We have ISA's to the value of £243K between us.
We have enough cash to see us through to me taking teachers pensions in 4 years time, this is a combination of my SIPP (80K and in cash) and a cash holding of £90K. At 60 I'll get my pension of £20 K per year plus a tax free lump of £60K.
We want to dip in and out of the ISA holdings from time to time , this would be to fund some big trips/adventures- mostly big cycle tours and treks until our bodies give in and demand more luxury.
The breakdown at present is :
CTY - 20% City of London
HNE- 5% Henderson Eurotrust
HFEL- 21% Henderson Far East Income
MRCH- 13% Merchants Trust
MRC- 6% Mercantile Investment Trust
LWI-8% Lowland Investment Trust
HHI-8% Henderson High Income
FGT-14% Finsbury Growth and Income


It seems that £243k (59%) is in Stocks (with an Income bias), nil in 'defensives', but £170k (41%) in Cash?
Taking note of current Stock Valuations, and the impending retirement, perhaps sensibly conservative,

One of the biggest risks for (potential) retirees is the so-called Sequence of Returns Risk. The possibility of being forced to sell Stocks for income needs at a time of bad prices, from which the portfolio never recovers.
Chapter 18 of the book 'The Informed Investor' by Frank Armstrong, tackles the issue head on, and is suggested reading to side-step the risk.

How does the Stock side of the portfolio split down geographical-wise?
UK/Global/US/Asia-Pacific/Europe/Emerging Markets.
At first glance it does, as already observed, look UK overweight.
1 user thanked Mr Helpful for this post.
neville dwards on 03/03/2018(UTC)
eain
Posted: 03 March 2018 14:40:57(UTC)
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Keith Cobby;58101 wrote:
I sold all my UK Equity Income trusts (including FGT which is the only one I keep on my watchlist) because I was concerned the requirement to provide yield was influencing the managers to buy shares with unsustainable dividends. Sales included City of London, Lowland, Henderson High Income, and I reinvested in global and asian trusts. I note that you have (as I did) quite a few of the Henderson trusts. Some of the sale proceeds I topped up Bankers which I have held for decades and really like.



Keith, which global and asian trusts did you go for?

I have been thinking about selling HHI and CTY and investing in a smaller UK trust as well as going more global.

I won't be a forced seller as I have plenty of cash and forthcoming teachers pensions which also come with cash.

thanks all, some cracking advice- I have already taken a look at the John Barron portfolios which I can do for the next 7 days.

eain
1 user thanked eain for this post.
Mickey on 03/03/2018(UTC)
Mr Helpful
Posted: 03 March 2018 15:27:02(UTC)
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eain;58139 wrote:

I won't be a forced seller as I have plenty of cash and forthcoming teachers pensions which also come with cash.
eain


And the 'Investment Plan' allows for the buying of further Stocks on any significant price weakness?
Keith Cobby
Posted: 03 March 2018 16:04:47(UTC)
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I invested the sale proceeds in Bankers, Edinburgh Worldwide and Pacific Horizon. Other core holdings for me are Henderson Smaller Companies and F & C Global Smaller Companies. I didn't top up the latter two as they are already two of my top four holdings.
2 users thanked Keith Cobby for this post.
Mike L on 03/03/2018(UTC), Mickey on 03/03/2018(UTC)
Woodberry
Posted: 04 March 2018 12:25:10(UTC)
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Joined: 25/01/2009(UTC)
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Some general suggestions from someone who was in your situation ten years ago. I had various investments when I retired early (with redundancy). I had accumulated them over the years but I didn't pay the investments much attention - while I was working.

Since retirement I have put some of my new free time into them. It took some years to work out my own principles for investing. I made some mistakes. And my objectives evolved. So I would suggest you plan for a gradual evolution of your portfolio and your objectives (particularly once your domestic budget has adjusted) rather than a big bang.

Now I have a collection of investment trusts spread around the world and the sectors and mainly leave them alone.

First principle is to have a range for the amount in each investment (in my case 5% to 6%) to avoid being too exposed to any single stock or IT.

Then look for some fixed income which is insulated from bank rate changes and stock market gyrations (eg P2P whose interest rates will rise as bank rate rises and some fixed income ITs investing in company securities).

Then look for representative global ITs, Europe ITs and East Asia/Japan ITs to get a spread. Watch out for the % in US in global ITs to make sure it is not too high and there is a real global spread within them. I also have 6% gold.

Two other points. Your fifties and your sixties are the best times travel and take up new acitivities. Unfortunately the chance of health limitations increases significantly in your seventies. So go for it now. And remember that if you don't travel first class then your children will!
3 users thanked Woodberry for this post.
Alan M on 04/03/2018(UTC), JMac on 05/03/2018(UTC), Margaret D on 10/03/2018(UTC)
Alan Selwood
Posted: 04 March 2018 12:44:06(UTC)
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....and if you do travel First Class (or Business Class) your children may later not be able to afford to!
;)
2 users thanked Alan Selwood for this post.
laang lee on 07/03/2018(UTC), philip gosling on 10/03/2018(UTC)
eain
Posted: 10 March 2018 12:32:16(UTC)
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thanks so far for all the advice

here is a link which may interest some people interested in IT's - free kindle book

eain

https://www.amazon.co.uk...36fef425feeef5dab0517683
3 users thanked eain for this post.
philip gosling on 10/03/2018(UTC), halfinchnut on 10/03/2018(UTC), Esthomizzy on 24/03/2018(UTC)
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