New Boglehead - advice wanted! [UK]

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Topic Author
Jiggy
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Joined: Sat Jan 11, 2020 5:48 pm

New Boglehead - advice wanted! [UK]

Post by Jiggy » Sat Jan 11, 2020 5:58 pm

Hi All,

I've been investing for a couple of years now but with no real direction as to the funds I have chosen. Returns have been good but after I recently discovered Jack Bogle (I'm also a John who goes by Jack!) and the simple rules of investing that he encourages I have started the transfer of my £10k to Vanguard.

I am fond of the three fund approach and need to chose my investments for my 10k. I'm a 26 year old male and aim to be investing for the long term - for the next three decades-ish.

I was looking for some feedback on the funds I plan on investing in:

72% - S&P index

18% - Global > https://www.vanguardinvestor.co.uk/inve ... _fund_link

10% - US bonds - https://www.vanguardinvestor.co.uk/inve ... _fund_link


I'm just looking for some feedback and if anyone can see any glaring errors or improvements I could make before I pull the trigger!


Cheers all!

Jack!
:D

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LadyGeek
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Re: New Boglehead - advice wanted!

Post by LadyGeek » Sat Jan 11, 2020 7:42 pm

Welcome! I moved your post to the Non-US Investing forum, as your post suggests you are not in the US.

What is your home country?
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Cheez-It Guy
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Re: New Boglehead - advice wanted!

Post by Cheez-It Guy » Sat Jan 11, 2020 8:33 pm

Looks like UK.

TedSwippet
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Re: New Boglehead - advice wanted!

Post by TedSwippet » Sun Jan 12, 2020 4:05 am

Jiggy wrote:
Sat Jan 11, 2020 5:58 pm
I'm just looking for some feedback and if anyone can see any glaring errors or improvements I could make before I pull the trigger!
The level of US bias in your suggested portfolio would arguably be somewhat high even for a US based investor. For a non-US investor, it looks extreme.

Have you found our wiki pages? In them you can find several suggested portfolios for non-US investors.

Outline of Non-US domiciles - Bogleheads
Outline of Non-US domiciles - United Kingdom - Bogleheads
UK investing - Bogleheads

Topic Author
Jiggy
Posts: 3
Joined: Sat Jan 11, 2020 5:48 pm

Re: New Boglehead - advice wanted!

Post by Jiggy » Sun Jan 12, 2020 4:29 am

TedSwippet wrote:
Sun Jan 12, 2020 4:05 am


The level of US bias in your suggested portfolio would arguably be somewhat high even for a US based investor. For a non-US investor, it looks extreme.

Thanks for the feedback Ted! Yes I'm living in the UK.

What would be the implications for a UK investor having an equivalent about of US stock as a UK investor?
Would you suggest lowering the S &P index holding and increasing the Global or perhaps bringing in a UK tracker index to give some more UK exposure?

Thanks! :D

TedSwippet
Posts: 2565
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Location: UK

Re: New Boglehead - advice wanted!

Post by TedSwippet » Sun Jan 12, 2020 8:15 am

Jiggy wrote:
Sun Jan 12, 2020 4:29 am
What would be the implications for a UK investor having an equivalent about of US stock as a UK investor?
Large currency risk and lack of global diversification.
Jiggy wrote:
Sun Jan 12, 2020 4:29 am
Would you suggest lowering the S &P index holding and increasing the Global or perhaps bringing in a UK tracker index to give some more UK exposure?
I am not sure you have fully understood your proposed portfolio. Combining 72% US stocks with 18% in a global ex-UK fund gives you somewhere around 81% US stocks and 9% other country stocks but with a 0% UK allocation. The UK is around 6% of world markets. As a UK investor, you'd have to be extremely 'bearish' on UK PLC to entirely avoid it. Are you?

In addition, a 10% allocation to US bonds would only make sense if you were planning to retire in the US. Again, a large currency risk. Moreover, one that has no place in your fixed interest component.

Take a look at the suggested portfolios for UK investors in the wiki. Something like 80% Vanguard FTSE Global All Cap Index Fund (includes UK) and 20% Vanguard U.K. Government Bond Index Fund. Or even a single holding of Vanguard LifeStrategy 80%; one and done.

I'm assuming you're investing through an ISA here. Or maybe a SIPP. Either way, you will want to pay attention to UK platform charges. Going to Vanguard directly will cost you 0.15%, so £15/year on £10k, and it is difficult to undercut that (iWeb perhaps, but only if you trade fewer than three times a year). Vanguard do not yet offer a SIPP, though it is apparently (and permanently!) in the pipeline.

If you invest through Vanguard you can only hold Vanguard funds and ETFs. Other platforms offer a full range, so Vanguard but also for example Fidelity and HSBC, both of whom also offer a good range of tracker funds and ETFs, in some cases with annual charges that are a fair bit lower than Vanguard's.

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Forester
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Re: New Boglehead - advice wanted! [UK]

Post by Forester » Tue Jan 14, 2020 11:46 am

Jiggy wrote:
Sat Jan 11, 2020 5:58 pm
Hi All,

I've been investing for a couple of years now but with no real direction as to the funds I have chosen. Returns have been good but after I recently discovered Jack Bogle (I'm also a John who goes by Jack!) and the simple rules of investing that he encourages I have started the transfer of my £10k to Vanguard.

I am fond of the three fund approach and need to chose my investments for my 10k. I'm a 26 year old male and aim to be investing for the long term - for the next three decades-ish.

I was looking for some feedback on the funds I plan on investing in:

72% - S&P index

18% - Global > https://www.vanguardinvestor.co.uk/inve ... _fund_link

10% - US bonds - https://www.vanguardinvestor.co.uk/inve ... _fund_link


I'm just looking for some feedback and if anyone can see any glaring errors or improvements I could make before I pull the trigger!


Cheers all!

Jack!
:D
Your starting point should be a global tracker which includes developed & emerging markets; https://www.vanguardinvestor.co.uk/inve ... _fund_link

Then decide how much, if any, bonds you want to hold. If you're 26 one rule of thumb would be to deduct 10 from your age, so right now you would be 16% bonds. One option is global bonds, another is UK gilts. https://www.vanguardinvestor.co.uk/inve ... _fund_link https://www.vanguardinvestor.co.uk/inve ... _fund_link

Topic Author
Jiggy
Posts: 3
Joined: Sat Jan 11, 2020 5:48 pm

Re: New Boglehead - advice wanted! [UK]

Post by Jiggy » Tue Jan 14, 2020 2:52 pm

That's top, seems very sensible too!

Cheers all!

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