I have some savings of around 70k pounds. If you were in my place, how would you invest?
It partly depends if you are a local British person, or an expat living in the UK or abroad.
In any case, you should
- Move away from a purely pound based portfolio, for obvious reasons. The Pound is now crashing and acting like an emerging market currency. You should at least have exposure to international markets.
- I wouldn’t keep it in the bank, as I would be losing money to inflation
- I would focus on a international’s diversified, portfolio
In terms of number 3, if I actually lived in the UK, I would have maybe 35% in the UK FTSE, 55% in various international indexes, and 10% in bond indexes.
There are loads of UK-based firms that do ISAs and other instruments that aren’t available to those living overseas.
As I am a UK citizen living overseas, I have 10% or so in the FTSE, as I more clear about my wealth in USD, as an expat.
It also depends on your age. If you are older, meaning within 10 years or so of retirement, 10% in bonds should be raised to 25%+.
Whatever you do, the important things are:
- Being long-term
- Never timing the markets. At a recent client event, the Shark Tank (and previously Dragons Den) star Kevin O’Leary admitted that he had tried and failed to time the markets.
If somebody worth an estimated $400million can’t do it, then very few people (if any) can.
It is better to just invest now and forget about it and
- Not care about the news, Brexit, and so on
- Not worry about short-term declines and rises in the market. That brings me back to number 1, and just be long-term
- Adding to your portfolio when you get fresh money
- Have a portable portfolio if you are a UK expat, or a British person living overseas.
I would also focus on the objective. Is it retirement, or another objective?
Once you know why you are investing, it makes it easier to stick to a plan.