UK resident trouble choosing allocations

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Topic Author
AndyS
Posts: 3
Joined: Thu Mar 26, 2020 4:17 am

UK resident trouble choosing allocations

Post by AndyS » Thu Mar 26, 2020 4:38 am

I have spent a bit of time reading through the Wiki pages and already have a decent idea on what I'm doing, apart from one thing.... Choosing my asset allocation.

My dilemma comes from my current work situation along with the age difference between me and my wife (I am 36 and my wife is 47).

I earn our main income from betting and trading on the sports markets and over the past 18 months I have averaged a yearly salary of high 5 figures GBP. Some months are not very profitable whilst others are extremely profitable. Everything I do is risk calculated.

We have a 20yr mortgage on an extremely low interest rate. For the past 6 months I have been slightly overpaying this along with maximising my S&SISA contributions.

Currently I own 100% equities and I know I need to rebalance at some point soon. Probably once the markets settle down a little.
Being that I am exposed to a very volatile income from day to day, seeing markets drop as they have done, hasn't given me any discomfort. In fact I have gone out of my way to invest more than usual in the current crash.

Any advice is most welcome.

Resident: UK
Currency: GBP
Emergency funds: 6 months
Debt: None
Age: 36
Desired asset allocation: Help me??
Portfolio: Currently hold £25-30k in Vanguard Global All Cap, no bonds. Invested between 2018 and 2020.

TedSwippet
Posts: 2736
Joined: Mon Jun 04, 2007 4:19 pm
Location: UK

Re: UK resident trouble choosing allocations

Post by TedSwippet » Thu Mar 26, 2020 2:09 pm

Welcome.
AndyS wrote:
Thu Mar 26, 2020 4:38 am
I have spent a bit of time reading through the Wiki pages and already have a decent idea on what I'm doing, apart from one thing.... Choosing my asset allocation.
...
Currently I own 100% equities and I know I need to rebalance at some point soon. Probably once the markets settle down a little.
Being that I am exposed to a very volatile income from day to day, seeing markets drop as they have done, hasn't given me any discomfort. In fact I have gone out of my way to invest more than usual in the current crash.
The rough rule is 100-age in bonds, or 120-age in bonds, or some variation on that depending on where you look.

This is just a rough rule, though. The right place is where you can tolerate the volatility. If you're happy with 100% stocks then that's right for you. It's not for everybody, but everyone is different.

Does your wife have her own portfolio, and if so, how does she run it? If it's conservative, then you have a buffer against extended poor stock performance. Are you making best use of ISAs? Also, a pension or SIPP?

Topic Author
AndyS
Posts: 3
Joined: Thu Mar 26, 2020 4:17 am

Re: UK resident trouble choosing allocations

Post by AndyS » Thu Mar 26, 2020 7:11 pm

Thank you for replying.

Yes my wife has her own portfolio but specifically for a pension. She holds her ISA as cash only much to my dismay but it is her choice and money she had saved before we met.
She is very risk averse, so quite the opposite to me and her pension portfolio is 80% bonds I believe.

When you say making your best use of ISA, what do you mean? This will be the first full financial year I have been able to max out the 20k limits anyway. I have placed regular orders for the Global All Cap throughout the year.

SIPP is new to me, I have not opened one as of yet. This is something I plan to look at hopefully before the end of the financial year in a week or so.

TedSwippet
Posts: 2736
Joined: Mon Jun 04, 2007 4:19 pm
Location: UK

Re: UK resident trouble choosing allocations

Post by TedSwippet » Fri Mar 27, 2020 3:51 am

AndyS wrote:
Thu Mar 26, 2020 7:11 pm
Yes my wife has her own portfolio but specifically for a pension. She holds her ISA as cash only much to my dismay but it is her choice and money she had saved before we met.
She is very risk averse, so quite the opposite to me and her pension portfolio is 80% bonds I believe.
Assuming you stay together(!), your wife's very conservative -- perhaps over-conservative -- allocations balance out your own riskier ones, so that between you, you have something that might look relatively conventional. Depending on the relative levels of your own and your wife's assets, that is; if one of you is massively richer than the other, that would skew things.

In that sense then, a 100% stocks portfolio for you might make sense.
AndyS wrote:
Thu Mar 26, 2020 7:11 pm
When you say making your best use of ISA, what do you mean? This will be the first full financial year I have been able to max out the 20k limits anyway. I have placed regular orders for the Global All Cap throughout the year.
Just that you invest inside an ISA first, and only make further investments outside once your annual investment amounts exceed your annual ISA limits. It sounds like that's the case.
AndyS wrote:
Thu Mar 26, 2020 7:11 pm
SIPP is new to me, I have not opened one as of yet. This is something I plan to look at hopefully before the end of the financial year in a week or so.
There are some rules around what type of income you can put into a SIPP. Google the term 'pensionable income'. If you don't have an 'employer' you might be restricted to just a minimal annual contribution of around £3k or so. It's a small help, but by no means is it enough to build up a decent pension, even over 30 years.

Finally, if you haven't already found it, this wiki page has an overview of investing from the UK:

UK investing - Bogleheads

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galeno
Posts: 1640
Joined: Fri Dec 21, 2007 12:06 pm

Re: UK resident trouble choosing allocations

Post by galeno » Fri Mar 27, 2020 5:14 am

Personally I like the 60/40 portfolio. You and your wife are 42 years old together. 60/40 would be a conservative port for you.

Topic Author
AndyS
Posts: 3
Joined: Thu Mar 26, 2020 4:17 am

Re: UK resident trouble choosing allocations

Post by AndyS » Fri Mar 27, 2020 5:02 pm

Thank you very much for your advice. It is much appreciated. I often see advice on personal investments but never really seen anything in regards to a couple who have an age difference as well as complete opposite risk tolerances.

This has all been very helpful.

I will look to inform myself more on SIPPs.

Thanks again

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