Thoughts on retirement pie?

Hi all,

Sorry I know there are millions these.

I am an extreme novice so I’m going long with this; I currently do not do CFDs or swings etc right now. But this is my pie for the long term.

Thoughts from you experienced investors greatly appreciated.

https://trading212.com/pies/l7AGHSKzjZ7BVw5hzEjc5nGPr0dQ

As I get some healthy profits I will looks to take them and reinvest.

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Looks fine :+1:

For retirement I personally have some world, asia and/or emerging markets ETFs just to spread the risky :wink:

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Looks good to me. I prefer growth stocks so probably wouldn’t go with WPP or LGEN myself but would switch them out for something like AMD or a cloud stock like Cloudflare for example.

Some might see Virgin Galactic as a punt, but I think the space industry is the next frontier for humanity so these early companies will be at an early mover advantage.

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Thanks. I’ll look at them.

I’ll grab some more growth when things settle I think.

WPP is probs in the wrong pie in fairness, it’s more a COVID play to sell in a couple of years.

Any other growth companies you’re hot on right now?

SPCE is pure speculation to be honest. But if they pull it off it’ll be pretty big.

Companies like Sartorius, Blackrock, Visa, Prologis, Equinix, Ocado, Digital Realty Trust, ASMI, ASML, BESI, Adyen, Taiwan Semiconductors, Cloudflare and Starbucks come to my mind. Some of those are more speculative than others but overall a bit more growth-oriented.

others have said it but I would add some international ETF’s

Or just add Scottish Mortgage trust for some growth/Ark invest style gains

ongoing charges of 0.36% and they borrow quite a lot (according to morningstar pushing up actual fees up to 0.77%). Those fees would make me want to avoid them.

The lending is manageable and the average gains more then make up for the management fee. In the last 10 years the first year was unprofitable but every year has brought returns of 20-50%

I do believe that those companies will outperform the S&P. I am curious to see how Apple plays out in the next few months though.

That is a very good point, I probably do need some skin outside of the S&P. Although that index has been a winner over the long term.

The main rationale behind only having a small amount of companies is that my portfolio is only £3.5k so far, over time as it increased I would more than likely look to add additional companies. I do track the ones I hold on a regular basis.

Would you recommend diversifying more even though my capital is so small?

Diversification is the only free lunch in investing, let me explain. To decrease the risk you would need to reduce your expected return, but diversifying also reduces risk while not really impacting expected returns. You reduce the uncompensated individual company risk with diversification. The compensated market risk isn’t decreased with diversification. It does come with a cost like @ev.joy said, that can be time (with individual companies especially) or having a broad ETF (expense ratio). The effects can be prevalent even on “smaller” portfolio’s (I find 3.5K a reasonably large amount but that’s just my opinion)

I was also thinking of putting together a retirement pie based 100% on equities. Can I ask why you personally chose to not include any bonds?

I was under the impression it was reasonably small.

I may add some companies with some profits (hopefully not too far away). My only concern was having small positions in companies, say £100, and if not being worth while. What are your thoughts?

That’s pretty intentional right now as they are something I haven’t read into and learned enough about as of yet. Maybe in future I will do so.

I tend to only get 45 mins of research in a day so it’s not a huge priority as of yet.

What are the main advantages from your own point of view?

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As long as you know what you invest in I think it’s almost always worthwhile to spread your money (just my opinion).

If we look at risk as volatility/standard deviation then we can conclude that the larger the amount of stocks the less the additional reduction in risk is achieved by adding more stocks (based on research). The ‘perfect’ amount of stocks doesn’t really exist as that’s something really personal, but in general 10-15 (largely debated) stocks capture almost all diversification benefits.

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From what I’ve read recently, there appear to be three conclusive arguments:

  1. Bonds (especially treasury bonds) will continue to yield almost nothing for the foreseeable future due to the current amount of government spending - they are simply no longer worth buying and holding
  2. If you have a long-term perspective, you might as well just buy & hold equities and ride out the drawdowns - over the long term, equities rise
  3. The better current option than investing in bonds is to hold bond-like equities i.e. safe and secure blue-chips, dividend aristocrats - these are (almost?) just as safe as bonds and will guarantee regular income

This is the current approach I’m following until I hear something otherwise.