Annual Portfolio Review 2019

Annual Portfolio Review 2019

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12 Responses

  1. Avatar Al Cam says:

    With a W/D rate of <1% looks to me like you still have absolutely no worries!

    A few quick Q's if I may:
    a) should your "personal target" not be 2.3% rather than 4.1%;
    b) are you using Nov 2019 CPIH as your annual measure of inflation
    c) why have you moved away so much (with more planned) from Fidelity

    • Mike Rawson Mike Rawson says:

      I was worried about Corbyn until last month, but I’m not worried about anything at the moment. There’s a looming market crash to get through, but perhaps not this year.

      a) yes – fixed, thanks for spotting that

      b) yes – I update on 1st Jan and more than one Dec figure is not yet published. It’s the same every year so it works out long-term

      c) I found Fidelity inflexible, even when I had a lot of money with them – they wouldn’t split a large ISA for me and I can’t trade my SIPP online. I also find them like HL in that they push you towards the active OEICs universe, where they make the most money. Budget brokers don’t market anything to me.

      But apart from that, 10% is my target maximum exposure to any counterparty. AJ Bell is the exception because I can’t find another cheap SIPP. I had high hopes for the Vanguard SIPP but it’s aimed at small pots.

      • Avatar Al Cam says:

        re b) above
        As I understand it, most UK government depts seem to use Sept to Sept (usually available from around mid October) to estimate annual inflation and then apply the uplift/increase [to state pension, tax thresholds, etc] the following April. From what I can tell a lot of DB pension schemes also use this approach. IMO what they should use is the average of inflation over the 12 months immediately prior to the uplift being applied – but, I assume, as some of this inflation data may not be available and/or validated in good time – they have to use an alternative approach.

  2. Great post and I love the death ratio idea!
    But to be a bit pedantic – your life expectancy has not dropped by 1 this year – since you’ve not died in 2019 you are statistically going to live by about 0.97 fewer years!
    That’s something to feel good about.
    If you had died in 2019 then that would be a different matter.

    • Mike Rawson Mike Rawson says:

      Good point, but I think rounding is allowed in a high-level post like this. Glad you like the death ratio, it went down like a cup of sick the first time I presented it to an investor group (% gain last year was their only KPI).

      Expected age to the nearest year is all I need for most of the relevant calculations, and my life expectancy has been stuck at 86 since I started looking it up.

  3. Avatar Al Cam says:

    re “I can’t trade my SIPP online”.
    Could you clarify please if you meant income drawdown and/or just regular buy/sell type transactions?

    In any case, do you know anybody that does allow all or even some of these transaction types online in a SIPP?

    I ask as I am in the middle of another drawdown from my SIPP and am becoming somewhat irritated with the telephone calls/paper-based system.

    • Mike Rawson Mike Rawson says:

      I meant regular trades – it’s an old pension and they haven’t moved it on to their new platform. I’m waiting to find out if they can organise an in specie transfer to their “new” SIPP. If not I will cash in and move elsewhere. I’d been hoping the Vanguard offer would be compelling but they are targeting small pots.

      I mostly drawdown from HL, which involves lots of form-filling. My partner uses PensionBee for some of her money and their drawdown process is very easy. Too expensive (and simplistic) to use for all of our pensions, though.

      • Avatar Al Cam says:

        Thanks for the prompt and informative reply.

        I see what you mean about PensionBee.
        It looks to me like a whizzy interface to third party money managers; all of which/whom have to be paid!!

        From what I can tell, the Vanguard SIPP looks like it should, in practice, be very similar to their S&S ISA – albeit with the pension overlay (tax relief, drawdown (in due course), etc)

        I will just put up with my drawdown irritations for the time being – they did tell me they were planning to move it all online, and PensionBee does show that that can actually be achieved.

  4. Avatar Al Cam says:

    I have some over-arching questions about so-called alternatives.

    Also, I have seen other folk consider real estate as being more bond like – possibly because they view the rental income (even if imputed for your own home) as a proxy for a coupon.

    Thus, I am somewhat intrigued by your mapping of Property to Equity Alts.

    Could you say a few words about what led you to make this particular mapping? Thanks.

    • Mike Rawson Mike Rawson says:

      It’s pretty simple – historical correlations between stocks and property are high. Rob Carver’s book Smart Portfolios has more detail.

      I see the portfolio as built around stocks as a growth engine. Everything else is there to lower the volatility of stocks.

      Thinking in terms of income/yield makes no sense to me. A pound is a pound, wherever it comes from.

  5. Avatar Al Cam says:

    Some more recent words on the topic of correlation between property & stocks at:

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Annual Portfolio Review 2019

by Mike Rawson time to read: 4 min
More in Featured, Mike's portfolio
Stock Screeners December 2019
Stock Screeners December 2019

Today's post is the regular monthly update on the outputs produced by our stock screeners.