Long term investing 20 years

[phib]

Looking for a long term investment strategy, have met with a number of wealth managers and everyone has a different view.

Property has been a great investment for us over the years but we will probably need to be a little more liquid than that due to needing some of the money for school fees in the next 5-10 years.

if you had 500k what range of investments would you be looking at.

All this assumes a low risk attitude and the objective being to protect the money if that makes sense.

Thanks

Phib

[Armitage.Shanks]

What’s wrong with state schools where you are?

[simong800]

You'd need 2 different strategies.

One for the money needed in 5 years.

One for the money needed in 20.

Doing the same thing for the total amount would be a disaster - either not taking enough risk for the longer timeframe, or taking too much for the shorter.

[Puzzles]

All the independent schools near me are super expensive, if I invested the fees I think it would be more beneficial.

[phib]

The schools thing is a decision thats made and I guess a personal one.

I am happy to look at a mix of short and long term options, just need some ideas on where to start.

Have max VCT's and max premium bonds (for all the family) and art / cars etc etc but dont know much about bonds etc

Thanks

Phib

[simong800]

phib said:

The schools thing is a decision thats made and I guess a personal one.

I am happy to look at a mix of short and long term options, just need some ideas on where to start.

Have max VCT's and max premium bonds (for all the family) and art / cars etc etc but dont know much about bonds etc

Thanks

Phib

For 20+ years I'd just stick money into global index trackers. There are next to no active equity funds that outperform over that timeframe, and if anyone can pick today which of the 5000 odd you should buy to outperform for 20 years then kudos to them. Money in S&S ISA wrappers on lowest cost platform, and into a global tracker = easy.

Personally speaking if I had say £250k that I might need in 5-10 years I'd be coming up with some kind of portfolio mixing "defensive" active equity funds (for growth without massive risk) along with wealth preservation trusts such as;

Capital Gearing Trust
Personal Assets Trust
Ruffer

You'd be outsourcing bond decisions (which bonds? which currency? what duration? corporate or government? etc etc) to fund managers whose mandate it is to protect investor capital who know far more about it than you or I!

These have returned 4-6% p/annum over the last 5-10 years with low volatility.

[phib]

si800 said:

For 20+ years I'd just stick money into global index trackers. There are next to no active equity funds that outperform over that timeframe, and if anyone can pick today which of the 5000 odd you should buy to outperform for 20 years then kudos to them. Money in S&S ISA wrappers on lowest cost platform, and into a global tracker = easy.

Personally speaking if I had say £250k that I might need in 5-10 years I'd be coming up with some kind of portfolio mixing "defensive" active equity funds (for growth without massive risk) along with wealth preservation trusts such as;

Capital Gearing Trust
Personal Assets Trust
Ruffer

You'd be outsourcing bond decisions (which bonds? which currency? what duration? corporate or government? etc etc) to fund managers whose mandate it is to protect investor capital who know far more about it than you or I!

These have returned 4-6% p/annum over the last 5-10 years with low volatility.

Many thanks, this gives me somthing to get started with !!

Phib

[RDMcG]

phib said:

Looking for a long term investment strategy, have met with a number of wealth managers and everyone has a different view.

Property has been a great investment for us over the years but we will probably need to be a little more liquid than that due to needing some of the money for school fees in the next 5-10 years.

if you had 500k what range of investments would you be looking at.

All this assumes a low risk attitude and the objective being to protect the money if that makes sense.

Thanks

Phib

I am a risk-averse long term investor and had the objective of capital preservation. I am in Canada but the objective was the same. I met with a number of banks and advisors and told them that I want to have a long term performance a bit better than the market as a whole, no gimmicks. That meant simply that I would aim to make a bit more in the positive years and lose a bit less in the negative years. I did not take any draw when I was working and when I left full time work in 2008 I set up a fixed monthly withdrawal, which oddly enough I have never changed.I do have other income sources.

I went fairly heavily into the equity markets with a balance of US and Canadian investments and a smaller exposure to other countries. Obviously when you invest in a foreign currency you have the double upside/downside of the performance of the stock itself and the currency fluctuations.

I do not actively invest myself at all, but leave that to the wealth management people, just set the objectives.. I get plenty of information/analytics but have learned that obsessively following the fluctuations in the market is one way to give yourself a coronary. In the long term I found that equities will generally do well. Obviously in recent years property has been good globally has in some geographies outstripped the public markets, but at least here it is headed down substantially . Too many heavily mortgaged people who could go upside down easily in a major correction and that will likely take many years to recover. My own sense is that the broader markets are likely to do better.

Unfortunately there is no magic way to predict the future, but the key is to see things in the very long term.

[Phooey]

500k is a lot to fk up in one go. Drip feeding say 1000/mth for 10+yrs I’d say just a cheap global tracker, but half a million squid I’d probably be taking professional advice. The trouble is finding a good IFA. My issue (which I could be totally wrong) is US equity (which is the main slice) of a global tracker is expensive, and the US hasn’t even confirmed a recession yet. It’s has to get cheaper. And then once we are in a recession you might want to look at other tilts (for example Small-Cap etc). You need a strategy.

[randlemarcus]

One thing that's worth looking at is prepayment of the school fees. They can be very flexible for money upfront,and that pushes the fee inflation issue back where it belongs.

[BobToc]

brickwall said:

For the 20+ year pot I’d be looking at global equity trackers but also putting a portion into private equity (and perhaps a small amount into venture) to gain exposure to a historically faster-growing asset class that is somewhat separated from the public markets.

For this ticket size PE’s hardly worth the hassle.

[simong800]

BobToc said:

For this ticket size PE’s hardly worth the hassle.

What hassle do you see involved in getting exposure to Private Equity?

Anyone can log onto their Hargreaves Lansdown and buy x amount of ticker: HVPE.

https://www.hvpe.com

Exposure to over 1000 companies, diversified by sector, mix of venture/buyout/infrastructure.

10 year shareholder return to July 2022 = 426%

Zero hassle involved to be honest!

[simong800]

Phooey said:

500k is a lot to fk up in one go. Drip feeding say 1000/mth for 10+yrs I’d say just a cheap global tracker, but half a million squid I’d probably be taking professional advice. The trouble is finding a good IFA. My issue (which I could be totally wrong) is US equity (which is the main slice) of a global tracker is expensive, and the US hasn’t even confirmed a recession yet. It’s has to get cheaper. And then once we are in a recession you might want to look at other tilts (for example Small-Cap etc). You need a strategy.

Definitely not looking to be argumentative in the slightest, but as someone self managing a reasonable pot and having chosen to go this route rather than an IFA (having met a couple) I saw zero value they'd add.

In fact quite the opposite. The impact of fees is significant over a long investing timeframe, and most IFAs want to charge you a big % up front, an annual % ongoing and to stick you in a load of high OCF active funds which are near enough guaranteed to underperform the MSCI World/ACWI over time.

How many IFAs tell people "you'd be best off opening a Vanguard account and sticking it all in a tracker"? Because for many people that is indeed what they'd be best off doing rather than performance chasing their way into active funds.

Don't get me wrong, I am sure they could be of some use when it comes to understanding tax free wrappers, tax planning etc if someone doesn't have knowledge around that.

But I honestly think with some great resources out there (YouTube, forums), a couple of books (The Psychology of Money, The Little Book of Commonsense Investing) and a couple of excellent blogs (Monevator, Rational Reminder) self educating doesn't take long and adds a guaranteed couple x % annually to your returns.

[phib]

si800 said:

BobToc said:

For this ticket size PE’s hardly worth the hassle.

What hassle do you see involved in getting exposure to Private Equity?

Anyone can log onto their Hargreaves Lansdown and buy x amount of ticker: HVPE.

https://www.hvpe.com

Exposure to over 1000 companies, diversified by sector, mix of venture/buyout/infrastructure.

10 year shareholder return to July 2022 = 426%

Zero hassle involved to be honest!

Ironically PE is what I do for a living !!! And I dont invest in that !!

Phib

[pork911]

si800 said:

What hassle do you see involved in getting exposure to Private Equity?

Anyone can log onto their Hargreaves Lansdown and buy x amount of ticker: HVPE.

https://www.hvpe.com

Exposure to over 1000 companies, diversified by sector, mix of venture/buyout/infrastructure.

10 year shareholder return to July 2022 = 426%

Zero hassle involved to be honest!

cool. no downsides?

[Louis Balfour]

phib said:

Looking for a long term investment strategy...

....some of the money for school fees in the next 5-10 years.

Phib

[phib]

Louis Balfour said:

phib said:

Looking for a long term investment strategy...

....some of the money for school fees in the next 5-10 years.

Phib

That would have helped !!!!

[okgo]

randlemarcus said:

One thing that's worth looking at is prepayment of the school fees. They can be very flexible for money upfront,and that pushes the fee inflation issue back where it belongs.

Without wishing to hijack though I guess I am thinking similar to Phib.

Can you share a bit more on your experience of that?

[simong800]

pork911 said:

si800 said:

What hassle do you see involved in getting exposure to Private Equity?

Anyone can log onto their Hargreaves Lansdown and buy x amount of ticker: HVPE.

https://www.hvpe.com

Exposure to over 1000 companies, diversified by sector, mix of venture/buyout/infrastructure.

10 year shareholder return to July 2022 = 426%

Zero hassle involved to be honest!

cool. no downsides?

Of course many downsides.

Opaque fees
High fees
Volatility
Sometimes opaque holdings

Etc etc

Not sure what hassle though, it's as easy as buying a global index tracker ETF.

I see it as a high risk asset class, with potential for higher rewards than public markets

[phib]

okgo said:

randlemarcus said:

One thing that's worth looking at is prepayment of the school fees. They can be very flexible for money upfront,and that pushes the fee inflation issue back where it belongs.

Without wishing to hijack though I guess I am thinking similar to Phib.

Can you share a bit more on your experience of that?

Sadly our school doesn’t do that I did ask
Phib