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Bulldog Drummond
Posted: 16 February 2021 23:37:07(UTC)
#192

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I cannot resist quoting a favourite Chesterton verse in the context of those who would rather have T Bills than a bit of fun

The Song of the Strange Ascetic

If I had been a Heathen,
I’d have praised the purple vine,
My slaves should dig the vineyards,
And I would drink the wine.
But Higgins is a Heathen,
And his slaves grow lean and grey,
That he may drink some tepid milk
Exactly twice a day.

If I had been a Heathen,
I’d have crowned Neaera’s curls,
And filled my life with love affairs,
My house with dancing girls;
But Higgins is a Heathen,
And to lecture rooms is forced,
Where his aunts, who are not married,
Demand to be divorced.

If I had been a Heathen,
I’d have sent my armies forth,
And dragged behind my chariots
The Chieftains of the North.
But Higgins is a Heathen,
And he drives the dreary quill,
To lend the poor that funny cash
That makes them poorer still.

If I had been a Heathen,
I’d have piled my pyre on high,
And in a great red whirlwind
Gone roaring to the sky;
But Higgins is a Heathen,
And a richer man than I:
And they put him in an oven,
Just as if he were a pie.

Now who that runs can read it,
The riddle that I write,
Of why this poor old sinner,
Should sin without delight-
But I, I cannot read it
(Although I run and run),
Of them that do not have the faith,
And will not have the fun.
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4 users thanked Bulldog Drummond for this post.
Tim D on 17/02/2021(UTC), Easyrider on 17/02/2021(UTC), J Ross on 17/02/2021(UTC), bédé on 17/02/2021(UTC)
Tyrion Lannister
Posted: 17 February 2021 00:03:40(UTC)
#164

Joined: 03/03/2017(UTC)
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Bulldog Drummond;153141 wrote:
Easyrider;153139 wrote:
I still can't see the attraction of PNL over LifeStrategy 40/60 or 60/40. Both have performed better over 5 years as far as I can identify and both are much cheaper.
LS 40/60 (40% stocks, 60% bonds) seems more diversified that PNL except for gold, but I may be mistaken.


Agreed. I find the forum fascination with CGT & PNL baffling.


I hold them both but am beginning to wonder why I bother. Both fell like equities in Feb/March last rear, only marginally less than Fundsmith. I’m just starting out as a retiree, and my obvious interest is wealth preservation, but CGT/PNL aren’t making me warm and cosy! I’m starting to think I’d be better be splitting them between cash and equities.
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5 users thanked Tyrion Lannister for this post.
Chris1986 on 17/02/2021(UTC), Sheerman on 17/02/2021(UTC), Easyrider on 17/02/2021(UTC), Jesse M on 17/02/2021(UTC), lenahan on 18/02/2021(UTC)
Aminatidi
Posted: 17 February 2021 09:18:26(UTC)
#188

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Tyrion Lannister;153143 wrote:
Bulldog Drummond;153141 wrote:
Easyrider;153139 wrote:
I still can't see the attraction of PNL over LifeStrategy 40/60 or 60/40. Both have performed better over 5 years as far as I can identify and both are much cheaper.
LS 40/60 (40% stocks, 60% bonds) seems more diversified that PNL except for gold, but I may be mistaken.


Agreed. I find the forum fascination with CGT & PNL baffling.


I hold them both but am beginning to wonder why I bother. Both fell like equities in Feb/March last rear, only marginally less than Fundsmith. I’m just starting out as a retiree, and my obvious interest is wealth preservation, but CGT/PNL aren’t making me warm and cosy! I’m starting to think I’d be better be splitting them between cash and equities.


I am considering selling down some PNL and possible an equal amount of CGT and replacing with EMQQ and Invesco Elwood Blockchain.

Less about the allocation and more about a pathological dislike of lots of holdings.

Fifth time lucky as the forums seems to be playing up this morning!
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1 user thanked Aminatidi for this post.
Harry Trout on 17/02/2021(UTC)
Easyrider
Posted: 17 February 2021 09:39:17(UTC)
#193

Joined: 09/11/2020(UTC)
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I'm not sure why capital preservation is all that important when one is retired unless you want to leave the capital to your sprogs, or you are slowly liquidating your holdings into income.
Surely most retired people are more interested in dividends to fund their retirement?
The PNL dividend yield is only 1.23%. LS 40/60 is only slightly higher at 1.40%.
If you want the income why not have a parcel of good and well established ITs paying between 1.5% and 3.5%?
If there's a correction and their prices fall substantially, their dividends will go up.
Therefore it doesn't matter if prices fall if dividends are your priority.
I suppose the perceived advantage of PNL over LS 40/60 is that it's an IT and its active, not passive, and it holds some gold.
If I were to chose between the two - which I wouldn't - I'd go for LS 40/60 because of the lower cost, its passive, it doesn't hold gold, the dividend yield is slightly higher and the performance is slightly better.
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Robin on 17/02/2021(UTC), Jimmy Page on 17/02/2021(UTC)
Robin
Posted: 17 February 2021 09:59:08(UTC)
#196

Joined: 06/07/2009(UTC)
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I think this is an interesting discussion.

Bulldog Drummond - your perspective is an interesting one, as an adviser to UHNW individuals it would be interesting to hear your ideas of portfolio construction for those less fortunate who may never recover from a 50% plus drop in value of holdings - what would you recommend for those who would otherwise hold say 40% in wealth preservation - there is of course a big distinction as Easyrider suggests between those who have accumulated a sufficient portfolio and those n the journey who are not there yet, but who could ill afford to see a big drop in portfolio value (if you have £2m and experience 40% drop you'll be ok, if you have £400k - still a very decent amount - and experience a similar drop age say 50 with little hope of much added accumulation - things look different).

You mentioned bond holdings in another thread, Bulldog, RL Global I think - this has been edged by both CGT and PNL over 1 and 3 years and by CGT on 5 (PNL close behind) and it dropped more than CGT and PNL Feb/March 20 - be interested in your take on that, is it a preference for income?

These issues have been discussed in detail before and KL (bless his soul) developed strong arguments for a % in wealth preservation, including for the purposes of rebalance. Be really interested in a little more detail to your thinking?
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7 users thanked Robin for this post.
Sheerman on 17/02/2021(UTC), Jesse M on 17/02/2021(UTC), Guest on 17/02/2021(UTC), Guest on 17/02/2021(UTC), Hyndford on 17/02/2021(UTC), Jeff Liddiard on 17/02/2021(UTC), Trudy Scrumptious on 17/02/2021(UTC)
Robin
Posted: 17 February 2021 10:06:38(UTC)
#189

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Aminatidi;153158 wrote:
Tyrion Lannister;153143 wrote:
Bulldog Drummond;153141 wrote:
Easyrider;153139 wrote:
I still can't see the attraction of PNL over LifeStrategy 40/60 or 60/40. Both have performed better over 5 years as far as I can identify and both are much cheaper.
LS 40/60 (40% stocks, 60% bonds) seems more diversified that PNL except for gold, but I may be mistaken.


Agreed. I find the forum fascination with CGT & PNL baffling.


I hold them both but am beginning to wonder why I bother. Both fell like equities in Feb/March last rear, only marginally less than Fundsmith. I’m just starting out as a retiree, and my obvious interest is wealth preservation, but CGT/PNL aren’t making me warm and cosy! I’m starting to think I’d be better be splitting them between cash and equities.


I am considering selling down some PNL and possible an equal amount of CGT and replacing with EMQQ and Invesco Elwood Blockchain.

Less about the allocation and more about a pathological dislike of lots of holdings.

Fifth time lucky as the forums seems to be playing up this morning!


I know you have a big exposure to CGT/PNL, but I do find these decisions are always easier when things are going up!!!
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Aminatidi on 17/02/2021(UTC)
bédé
Posted: 17 February 2021 10:16:37(UTC)
#194

Joined: 26/09/2018(UTC)
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Easyrider;153167 wrote:
most retired people are more interested in dividends to fund their retirement?


I can't disagree. But are they right , or very wrong? Most does not represent the best example, usually the majority are the unthinking, lazy disinterested.

There are two ways of making money from shares. 1. Capital gains, 2. Dividends. Neither is guaranteed. If you want a guarantee, buy an annuity.

Dividends are certainly not guaranteed. In times of hardship they will be reduced. Sometimes companies maintain high dividends by eroding capital, borrowing even.

Liquidate your gains, spend your dividends by all means, but preserve your capital so that you can continue to do this over a long period. OK, an alternative might be to estimate your lifespan and run all your holdings down to zero by Day D.
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Easyrider on 17/02/2021(UTC)
Aminatidi
Posted: 17 February 2021 10:20:20(UTC)
#191

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Robin;153177 wrote:
I know you have a big exposure to CGT/PNL, but I do find these decisions are always easier when things are going up!!!


100% they are.

Tim seems able to sum up my thoughts better than I can - thoughts on his question above welcome :)

I hold my hands up that as you say when things are going up it's easy but sideways and down is still a struggle.

I could go 100% equities and in six months time be moaning that equities have gone sideways for several months.

Sometimes it's just life.
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Robin on 17/02/2021(UTC)
bédé
Posted: 17 February 2021 10:34:16(UTC)
#126

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Trudy Scrumptious;153100 wrote:
So probably the right time to be topping up Personal Assets, or at least rebalancing.


Funny how different people read things differently.

Just focus on the immediate pre- and post-Covid-crash period. Which fund gave the best protection? If crash protection is what you want - Ruffer.
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2 users thanked bédé for this post.
Joe Average on 17/02/2021(UTC), Trudy Scrumptious on 17/02/2021(UTC)
Tim D
Posted: 17 February 2021 10:40:07(UTC)
#163

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Bulldog Drummond;153141 wrote:
I find the forum fascination with CGT & PNL baffling.


Probably because there aren't actually that many things claiming to offer the same thing.

If investors are looking for equity or bond or real asset/"alt" exposure, they're spoilt for choice: thousands of funds, hundreds of trusts.

But look for something which might give a decent long-term return without too much volatility and with an emphasis on avoiding capital loss and PNL/CGT/RICA are pretty much where you're guaranteed to end up I think, if decent quality bonds are no longer floating your boat. Next nearest things are probably RCP or the BH hedge funds, but they're not really the same thing at all, so back to PNL/CGT/RICA it is.

Or at least that used to be the case. It'll be interesting to see how things like VLS40 or some of the new IA Volatility Managed funds - low numbered MyMap, L&G MultiIndex and the like - compare. But those things don't have a lot of history yet so arguably haven't been tested in a crisis. (Although I see Lifestrategy - only launched in the UK in 2011 - has been around in the USA since 1994 so it might be interesting to dig up how it performed in 2001 and 2008; not sure where to look for a US equivalent of trustnet charting though.)

I just stumbled on the PensionWise guy's review of Lifestrategy and he seems to really hate the idea of the fixed allocation in a crisis: https://pensioncraft.com...ard-lifestrategy-funds/ : "In short fixed allocation is a dumb strategy. So dumb, in fact, that we'd consider it a risk."; presumably anyone who agrees will be more inclined towards the hands-on active permabears than cheap passives. Not clear to me how the new actively-managed-bag-of-cheap-passives IA Volatility Managed funds fit into this world yet though.
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7 users thanked Tim D for this post.
Robin on 17/02/2021(UTC), Monty Claret on 17/02/2021(UTC), Joe Average on 17/02/2021(UTC), Easyrider on 17/02/2021(UTC), Harry Trout on 17/02/2021(UTC), Trudy Scrumptious on 17/02/2021(UTC), Aminatidi on 17/02/2021(UTC)
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