Over the previous 18 months and the next 18 months we are moving from the accumulation phase to the withdraw and spend phase. I retired about 18 months ago and my wife plans to go in about 18 months after cutting her hours back significantly this year.

As a consequence earned income will be reducing but DB pensions will be increasing, SPs will commence and a couple of AVC pots associated with the DBs will be withdrawn tax free and the funds put elsewhere.

The DBs and SPs will more than cover our general living expenses fortunately so our investments are for "luxury" spends e.g. extended long haul holidays each year for a few years whilst we are still fit enough to go on safaris, explore South America and the like.

This is an opportunity to try and shape the overall setup towards the future and we are aiming for.

A) 15% / 3 years "luxury" spend in cash to protect against a market fall and having to sell assets at "low" values (more cash than held now whilst good salary coming in).

B) The following 15% / 3 years "luxury" spend in Bonds and PBs (bonds will be reducing as both AVC funds are quite bond heavy, PBs will be increased)

C) 15% in various alternative ITs - PE (HVPE and NBPE), Infra (3iN and HICL), Renewables (UKW and BSIF). Hopefully they will grow but in the meantime they will generate an income which can be used to top up the cash pots and reduce the need for asset sales. No change here.

D) 55% in a range of global equity ITs (BUT and SSON) and funds (small amount of Fundsmith and some passive global trackers) for longer term, inflation beating returns. This will be an increase against current allocation.


Also hold a small amount of CGT and PNL which encompasses both bonds and equities components.


Target Return of CPI + 4% with the logic being that if we withdraw about 5% for the first 10 years and then that reduces to say 2.5% as we travel less often and / or shorter distances we won't run out before we couldn't care less.


Probably nowhere near optimal but perfectly adequate to do the job it needs to do.


As said above we are fortunate to have "won" basically and can now enjoy our leisure years without money worries.

Personal opinion (and solely personal, everyone defines this stuff differently) I think VLS 60 would be a VERY generous benchmark as your portfolio is right now 100% equities. Not only that, you're massively overweight US and tech. To me that is higher risk than a straight global equity index, but I completely understand the point that you have changed asset allocation a few times over the last year. HSBC GS Dynamic is 75% equities, with the rest being bonds and property.

I think this year is a coin flip, as you've basically made a load of massive bets with your portfolio. Big bet on the US, Tech and Quality factor. If those factors underperform the portfolio will, if they outperform you will do very well indeed assuming you stick to the allocation.

The key point though from what you've said is



This should define your overarching investment objectives and thus your strategy, but you've stated your objective is to beat the market. To beat the market you are taking more risk, and by taking more risk you are increasing your chances of a huge loss.

If you lost double what the market did in a down year (and didn't outperform in a good year) then something isn't quite right with the overall plan, again solely in my opinion. You're higher risk, lower reward.

Buy gilts, risk free if you hold until maturity.

Late 40s, retirement maybe 3-5 years away. For 2025, the plan is not radically different to 2024:

- on weakness in price, continue to top up Infra (HICL, INPP, BBGI), Renewables (UKW, BSIF), REITS (THRL/CRT, SUPR) and resources (BRWM) in my ISA, hopefully driving an increasing average yield whenever the price drops. Dividend income may exceed ISA inputs this year (or get close) so it is all about buying the most units at this point of solid income bearing equities. Yields of 6-8% for solid, often partially inflation linked income seems to good to miss

- trimming out most individual shares in SIPP and recycling into VWRL so it takes less mental cycles. SIPP is all about growth for use in 10-15 years from now

- building a cash/cash-like buffer of MMF, SMIF/similar, and potentially gilts in a unwrapped and ISA accounts ready for potential retirement. With yields of 4-5% and personal inflation at 2-3% happy to hold 3-5 years of cash in very low risk investments still returning 2-3% in real terms.

In all accounts, some cash on hand to take advantage of dips as they happen.

Well at the moment I'm planning to
1. Put maturing gilts into either other gilts or MMF's
and
2. Continue to drip feed from MMF's to global world trackers, with maybe a few small tweaks to the small 'active' portion of my portfolio.

That could all change though.

Lots of things could impact investments in a major way this year - arguably more so than usual.
Wars, Trump, Musk, AI, increasing indebtedness, bigger separation between the haves and have nots (both at a country level and individual one) etc

Currently my thinking is we'll have interest rates that will stay higher for longer - just look at the strength of the US economy. The number of new jobs created this month has far exceeded the expectations of the market (256k v 160k expected). It's difficult to see them cutting rates if that scenario continues.
While the US powers ahead the rest of the world is - to an extent - crawling. Can that increasing disparity continue? Not sure.
The 'mood' in US markets is generally very positive, but as we all know a lot of that is down to the Mag 7. Valuations in the US are crazy from what I understand, so if any of those earnings disappoint doubt could easily creep in.
I've got a feeling there's a bubble there somewhere......

But if interest rates stay higher for longer then I guess the current MM rates will remain.
I don't know what will happen to gilt prices but if they trend down throughout the year the yields will become more attractive than they are now (and they are not bad now), so I could see myself transfering money from an MMF into a short dated gilt.
If there is a crash then I think having a reasonable cash buffer in MMF'S/gilts is wise.