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Have you ever gone: I've got enough and so am getting out of equities?
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MBA MBA
Posted: 11 December 2023 10:23:29(UTC)
#1

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I know there was a thread on 'how much is enough' (or something like that) but this one is where I want to ask the following:

I'm by no means rich (or at least don't consider myself to be, although no doubt the social justice warriors will tell me I am), but there's a chance that within 10 years, fingers crossed, we will have enough to pay off/seriously pay down the mortgage, and generate an income of £30-40k pa between the two of us without taking any meaningful risk.

My intention at this point was to stay mainly in equities i.e. 60-80% and stay in equities for life via a bog standard global tracker. Im now thinking maybe I dont take that risk of another 'black swan' like risk, and one which this time government's cannot sheild us from i.e. QE after GFC and Covid.

Maybe I dont try and grow my wealth anymore and just call it a day (assuming between now and the next 10 years we dont have WWIII)

Have you done anything like the above?
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xxd09
Posted: 11 December 2023 10:42:58(UTC)
#2

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Yes I did
I had made “enough” ie a reasonably large pot of equities and bonds
Looked at historical Asset Allocations and surprisingly discovered that 30/70 equities/bonds got investors over the line equally successfully as 70/30 albeit the 30/70 left less for their heirs but had a more comfortable ride re volatility
The great John Bogle had this conundrum and finally settled on 50/50
I chose 30/70 at retirement-currently 33/62/5. 5=cash= 2 years living expenses
Now 77-20 yrs retd -worked so far even with this last years unusual bond drop (bonds never drop as much as equities )
So choose your personal Asset Allocation-how well can you cope with a 50% drop in the equity part of your portfolio?
Decide accordingly and then stay the course
xxd09
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Hilda Ogden
Posted: 11 December 2023 10:57:26(UTC)
#3

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My own rough and ready benchmark to stay long term invested in equities is to work out what you need. Then double it. I reckon by doing that and preventing any need to over reach for too high dividends from the portfolio then the portfolio is highly likely to outlive you. Invested in a sensible spread of investment trusts and perhaps a sprinkling of high quality shares.

Essential to have a two to three year income equivalent cash buffer to ride out volatility. A DB pension or annuity would achieve pretty much that too alongside the portfolio.
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Anthony French
Posted: 11 December 2023 11:08:14(UTC)
#4

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MBA MBA;289189 wrote:
I know there was a thread on 'how much is enough' (or something like that) but this one is where I want to ask the following:

I'm by no means rich (or at least don't consider myself to be, although no doubt the social justice warriors will tell me I am), but there's a chance that within 10 years, fingers crossed, we will have enough to pay off/seriously pay down the mortgage, and generate an income of £30-40k pa between the two of us without taking any meaningful risk.

My intention at this point was to stay mainly in equities i.e. 60-80% and stay in equities for life via a bog standard global tracker. Im now thinking maybe I dont take that risk of another 'black swan' like risk, and one which this time government's cannot sheild us from i.e. GFC and Covid via GFC.

Maybe I dont try and grow my wealth anymore and just call it a day (assuming between now and the next 10 years we dont have WWIII)

Have you done anything like the above?



As long as u can pick the time to sell u can't lose your hard earned
with a index tracker.
Maybe it would be prudent to reduce when your tracker is near it's high.
If u have a black swan event u could buy back and if your tracker
continues higher u make more profit.
Remember u can't actually bank a profit unless u sell all the holding
as in a black swan event the market can take back all your profit
and some.
Nice problem to have though.
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Anthony French
Posted: 11 December 2023 11:11:45(UTC)
#5

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The market wisdom was that for every ten years u
should buy bonds so if 60.
60% equity
40% bonds
but as recent history proved that was a wealth destroyer.
As with lifestyling the advice is not for your benefit.
Me a cynic ?
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MBA MBA on 11/12/2023(UTC), Captain Slugwash on 12/12/2023(UTC), Tom Davis on 12/12/2023(UTC), BigLoss on 22/05/2024(UTC)
Keith Cobby
Posted: 11 December 2023 11:18:19(UTC)
#6

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Nope. Agree with Hilda, I'll keep a couple of years cash and then stay in FCIT, SAIN, BNKR (plus JGGI) etc. They have been around a very long time, kept going in all situations, throw out sustainable dividends, offer inflation protection. I'll expire holding FCIT!
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guantou
Posted: 11 December 2023 11:24:19(UTC)
#11

Joined: 05/09/2009(UTC)
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The flip side to this argument is "I've got more than enough and so am not getting out of equities"

Ie: If the stock market was to throw us a curved ball and crash 80% I am still well off so why be cautious.
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North Star
Posted: 11 December 2023 11:40:54(UTC)
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Keith Cobby;289204 wrote:
Nope. Agree with Hilda, I'll keep a couple of years cash and then stay in FCIT, SAIN, BNKR (plus JGGI) etc. They have been around a very long time, kept going in all situations, throw out sustainable dividends, offer inflation protection. I'll expire holding FCIT!


I sold all my BNKR last week and reinvested in other global trusts and OEIC's. I can't understand why BNKR has under-performed so much over the past two years. FCIT not done much better either.
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Hilda Ogden
Posted: 11 December 2023 11:46:15(UTC)
#8

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North Star;289209 wrote:
Keith Cobby;289204 wrote:
Nope. Agree with Hilda, I'll keep a couple of years cash and then stay in FCIT, SAIN, BNKR (plus JGGI) etc. They have been around a very long time, kept going in all situations, throw out sustainable dividends, offer inflation protection. I'll expire holding FCIT!


I sold all my BNKR last week and reinvested in other global trusts and OEIC's. I can't understand why BNKR has under-performed so much over the past two years. FCIT not done much better either.

I'm having serious doubts about SAIN too. It's done about half as well as JGGI the last few years with about half the yield. Not great.
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Anthony French
Posted: 11 December 2023 12:07:30(UTC)
#12

Joined: 09/09/2018(UTC)
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EPIC Name Close Total_ret.% 2023 ytd Yield

JGGI JPMorgan Global Growth & Income PLC £4.89½ 19.07 3.47
SAIN Scottish American Investment Co (The) PLC £5.08 2.75 2.72
BNKR Bankers Investment Trust PLC 99p 2.53 2.31
FCIT F&C Investment Trust PLC £9.09 2.09 1.49
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MBA MBA on 11/12/2023(UTC), william barnes on 12/12/2023(UTC)
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