Good Portfolio, Bad Portfolio

Ultimately a good investment portfolio is one that achieves your financial goals but it is easy to lose sight of what you are doing and accidentally end up with something that is not fit for purpose. In this video, I will show you what I consider when looking at a portfolio, so you can go through this process and review whether you are still on track.
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Timestamps
00:00 Introduction
00:19 Why are you investing?
01:22 Clutter
05:40 Risk & Risky Assets
06:26 Not Enough Risk
11:21 Too Much Risk
17:14 Too Complicated
18:30 Conclusion
I Use The Following Data Sources To Help Me Create My Videos
(These links provide new users with a special offer and may also provide me with a small commission)
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✔️ Sharepad - sharescope.co.uk/pensioncraftsp 2nd month free for monthly subscribers & Additional free 13th month for annual subscribers
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Where Else You Can Find Me
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Take A Look At Some Of My Other Videos
📹 Investment For Beginners playlist • Investing for Beginners
📹 Investing For Retirement playlist • Investing for Retirement
📹Investing With Vanguard playlist • Investing with Vanguard
📹 Portfolio Building Blocks playlist • Portfolio Building Blocks
DISCLAIMER
All information is given for educational purposes and is not financial advice. Ramin does not provide recommendations and is not responsible for investment actions taken by viewers. Figures that are quoted refer to the past and past performance is not a reliable indicator of future results.
If you need financial advice, Unbiased, the UK’s leading online directory of financial advisers, can connect you to an Independent financial advisor for free. Additionally if you use our link to register with Unbiased, your first consultation with a financial adviser is free. imp.i337888.net/c/4012142/193... (This link provides you with a special offer and we will also earn a small commission)

[@Pensioncraft]

Become a pensioncraft.com member and learn to be a better investor. To find what we offer and how you can join our friendly community click here www.pensioncraft.com/investor-education/membership/

[@layt01]

One of the best financial videos ever. Perfect summary of life, universe and everything.

[@Pensioncraft]

Thanks so much @layt01

[@jasons46]

Great advice here. Keep it simple, buy things you understand, take some risk but don't try to shoot the lights out.

[@Pensioncraft]

Glad you enjoyed it @jasons46

[@fredbloggs4867]

Wow, what a huge dose of common sense. thank you.

[@Pensioncraft]

Thanks for watching @fredbloggs4867

[@RajaseelanGaneswaran]

Dude, your videos are the best. Always reigning my undisciplined self when it comes to shares😊

[@Pensioncraft]

Glad you like them @RajaseelanGaneswaran

[@OmarTravelAdventures]

Brilliant Video. Thank you.

[@Pensioncraft]

Glad you enjoyed it @OmarTravelAdventures

[@clivedyer17]

Outstanding video, so clear and easy to understand

[@Pensioncraft]

Glad it was helpful @clivedyer17

[@TomsPersonalFinance]

Really great video, Ramin 👍

[@Pensioncraft]

Many thanks @TomsPersonalFinance

[@markwilliams4312]

Great content as usual. We have healthy pensions so only invest in global stocks and keep enough money in premium bonds to cover us for at least a three year market crash. Over the last two years we had some decent premium bond pay outs but would never suggest they are a good place to use as an investment, just a good place to hide money from the tax man. I'm not convinced that bonds are a place to invest as it seems to be the reserve of nervous people. Likewise commodities.

[@jonathanb5367]

"Scooby doo tree" had me laughing :)

[@paulwright9749]

Very informative and interesting vid. Amy chance you could do something on ‘with profits’ funds and how exactly these work? Many thanks. 👍

[@PH-dm8ew]

Love your channel. I think i have a good grasp on this as far as returns vs. risk. Any chance you could do an episode that explains why some software uses current cash flows and some use inflated cash flows. How can they both be valid? I know i am missing something?

[@chrisyates2591]

You are amazing Ramin. Im trying to learn the basic priciples doing your into modules and reading your book the Financial Bestiary ; and following your youtube videos - soon I will join Pensioncraft as a member when im a little more knowledgeable and confident. The problem is im 71 and now retired with very little financial or investment knowledge - and as you know better than most this is a complex area - still a global index passive fund via Vanguard looks a possibilty for me. I just need to devote more time to study. Thanks for all you do

[@Pensioncraft]

Thank you @chrisyates2591 that is very kind of you to say! Our membership is varied and we have plenty of beginners so you don't have to be an expert to join. It is also a very friendly community who support each other to learn so I am sure you would feel most welcome.

[@lolololo3726]

Great videom as usual 👍🏿

[@Pensioncraft]

Appreciate it @lolololo3726

[@jam99]

More than 55-60% US exposure in most global index trackers in recent times. More like 65-70% e.g. VHVG currently 68% USA at the moment.

[@timetraveller3063]

Thanks Ramin

[@Pensioncraft]

Your Welcome @timetraveller3063

[@mohamedpatel3978]

Brilliant video.

[@Pensioncraft]

Glad you enjoyed it @mohamedpatel3978

[@TM-hw5tq]

Great video

[@Pensioncraft]

Glad you enjoyed it @TM-hw5tq

[@sachabarlow9483]

I love this, and also the assumption that couples should talk to each other about their moneys!!

[@chqshaitan1]

great video

[@Pensioncraft]

Glad you enjoyed it @chqshaitan1

[@clivedyer17]

There are so many off the shelf portfolios to choose from, and if you dig deep enough the data to help with choosing makes it easier. I agree that education is key. I have choose Royal London GP4 at the start of retirement (a slightly higher risk), and taken a TFLS and put in an ISA and savings to use if stocks enter a period of negative performance.

[@wrincht1]

On your cladogram you say, for instance, PFE,CVX,AAPL,BAC move together, are correlated. In fact their correlations, from May 2006, are: PFE with CVX, APPL, BAC respectively: 0.3, 0.2, 0.0. etc. So low correlations.

[@daisybee2245]

Thank you! I’ve just started with Vanguard S&P 500 & hope to add a world fund and will stick with the two!

[@MrFrobbo]

I'm similar, I've also added LifeStrategy for growth vs volatility. I want less volatility for part of my portfolio should I need to dispose of a % of the total investment.

[@jonbacon6664]

Simple but effective. I’m sure you’re away but the world fund is like 60/65% us anyway so just abre that in mind

[@JonnyMcJonFace]

ishares core S&P 500 I chose. Also vanguard developed world and vanguard emerging markets. And vanguard ftse250

[@mikew5274]

62 and retired, £600k in equity ISAs split roughly 80% world trackers, 10% Dodge and Cox/Ranmore Value funds, 10% L&G tech/Jupiter India. Another £350k in mmf/ various fixed rate bank accounts over 5-7 years to keep us going until DB and SP pensions kick in giving £50k annual income. Fingers crossed..

[@VoiceOfThe]

Keep you going? Unless you’re living a millionaire lifestyle buying a different yacht or toy everyday £950,000 is more than enough to see you through till you pass. Good job dude.

[@mikew5274]

@@VoiceOfThe The cash (and interest) is basically our income source along with a small db pension. It’s a good buffer and hedge against market corrections. Can’t see me putting any more into equities. My two kids have their eyes on big house deposits though and you should see how much gin and Clarins my wife gets through 😀

[@VoiceOfThe]

@@mikew5274 Women & kids eh 🙄

[@joannekelly5132]

How long did it take

[@dubsdolby9437]

Similar but achieved it at 53 🙂 50k annually and no tax liability.

[@gordonwinder2786]

Hi Ramin, the comparison of the Vanguard Lifestrategy funds is interesting - all the graphs seem to track one another, albeit at different levels of return. Is this to be expected when one fund is 80% bonds and at the other end of the scale 100% shares/0% bonds? All the peaks and troughs seem to align, and the only thing the bond element seems to do is reduce overall returns, not really moderate the risks? Am I missing something fundamental? Thanks Ramin.

[@b-m-c]

When do you plan to mix your 100% core portfolio up with some bonds or MMFs? I am 10 years from my planned retirement and 100% global Index trying to cook the pot up but wondering when is right to pour some 'non crashy' stuff in. When do you reckon?!

[@frederickwoof5785]

I'd like to know if you have some funds that are income, do regular withdrawals come out of the cash generated or are funds sold by the provider? (Vanguard)

[@me0101001000]

I've committed to creating three portfolios. One for myself and my living needs, one for my family (spouse, future children, etc.), and one to fund my work. Naturally, I take the most risk with my own portfolio, less risk with my work portfolio, and even less yet with my family portfolio. I'm a very risk tolerant person in my own life, so I feel comfortable enough investing in industries I know more about with some ETFs as insurance. My work projects are already risky enough as is, so I think my work fund should be a little less risky, so broader ETFs are just fine for me here. But when it comes to securing my family's future, I think I ought to play it even safer, because this money is not meant for me, but for my family, and I need to take more care when it comes to those investments, so I leave it all in a total market fund and call it good.

[@johnristheanswer]

Invest your family allowance from day one for your kids. We did that 27 years ago. Built a huge fund for them essentially for free. Can take a lot of risk too as lots of time and it's more or less a free 18 year bet.

[@ianharrison2238]

Hi Ramin, I think you have mixed up the LS 40 and LS 60 fund names in the table shown top left @ 10:24.

[@gaqkhan]

With of the market cap weighted eft being heavily weighted by a few large companies, do you think it makes sense to go for an equal weighted etf? And in particular, would you say there is more importance to this topic for an S&P 500 etf?

[@beat1riz]

Fire

[@nds9777]

Thanks Ramin....do you do any 1 on 1 advice...for "late starters"...?

[@Pensioncraft]

Hi @nds9777 it is never too late to start. We have many of "late starters" join our pensioncraft.com membership and you can find out more about my 1 to 1 coaching sessions here pensioncraft.com/investor-education/coaching/

[@nds9777]

@@Pensioncraft thanks Ramin

[@stevetaylor20]

Can you make a video on what would happen based on prior history with some financial calamity where the government outi n currency controls etc? By that I mean, what can do now to protect myself, such as open overseas account or ogld or btc etc. If Argentina can raid your bank account can UK raid accounts and securities held on brokerages...

[@jam99]

Buy physical assets. Hide them.

[@TheSamantha70]

Hi Ramin, i started investing in VLS60 for 10+ years, in January 2022. It seemed right for my risk profile as a retiree'. However, i paused in february 2023 as i lost my nerve slightly and read about the negative news regarding bonds. I then plumped £10k into a 1 yr fixed cash isa. When the cash isa matured i found that VLS60 had increased by +10%. I realise its probably a beginners mistake. But should i just return into the VLS60 now that the price is c.11% higher than when i paused? I'm wary of spoiling any decent work VLS 60 has done regarding personal rate of return. I have also received a small inheritance. Maybe for 10 years i could possibly go full 100% equities? I have a dc pension and various fixed/easy access cash accounts. Thanks!

[@montyloads]

Hi Ramin.... Trading 212s new cash isa!... any catchs we shouid be aware of that you can see? Looks a very good deal for the consumer at face value, just wondering if you have any thoughts on the product in regards to something we should be wary of?

[@Pensioncraft]

Hi @montyloads I have one myself so no concerns. Thanks Ramin

[@montyloads]

@@Pensioncraft That is reassuring, Thank you for the reply and also all the vids and podcasts. Very helpful for me as a new investor

[@thetjt]

Good video, very professional. 👍 I think I have low risk capacity & moderate risk appetite. Portfolio has been building up on equity funds which are perhaps too volatile for my liking but were also relatively cheap. So it's probably not exactly the portfolio I'd feel comfortable with in the long run (too much China) but has imo good upside potential which is kinda the idea in investing. Anyways I have about half of the principal cash still, so there's potential to add some if/when opportunities rise. Will likely add some more bond funds in next couple weeks...

[@kidkal7825]

Has anyone ever used a financial planner or wealth manager (apart from Romin of course). What are the positives and negatives and would you recommend it?

[@peterharris3096]

You might depending upon circumstances, eg you are close to retirement with several pension pots and if you wish to combine in say a sipp or arrange drawdown then your pension companies depending again upon the values and policy rules may require you to use a financial planner in the UK.

[@connorg7930]

If one has changed their mind on a fund in a SSIP, would you recommend selling it and then buying into a different one or just leave it and change the automatic investment into a preferred fund? My thinking is if you sell, and then buy into a different fund, you'll be buying in at a higher price

[@jam99]

No easy answer. It depends how "wrong" you think the original fund investment was.

[@spartacus4929]

It's a bigger risk not to take on more risk up to the sweet spot.

[@dubsdolby9437]

Show us your portfolio performance over the past 3-5-10 year's 👍

[@MagicNash89]

Being fully invested in one global fund can be considered a concentration risk😉

[@TimComley]

Check the weight

[@pistopit7142]

Why?

[@Goady1000]

I am 40% max usa

[@MagicNash89]

Stocks are very different among each other, the more I learn, the more I find its incorrect to bundle them all together under one asset class umbrella like that - sector and region matters GREATLY there, they do not all go in sync, Energy would often go against Tech. Consumer staples holds fairly well in high inflation environments with higher interest rate, while Tech/Consumer discretionary goes way down in that situation. Same goes for bonds, different duration - huge difference. Emerging bonds have basicly been like stocks, they play a region diversification role mostly. Corporate bonds go down during market crashes a la Covid, but long-term duration bonds go way up in that scenario. I could go on and on and on.

[@thetjt]

Good post. I had not even heard of emerging market bonds... but indeed, I checked, they *do* follow the stock market. If same with corporate bonds, I might forget they exist as well. I've been recently considering buying LONG duration bond funds for diversification... then again if inflation starts rising again they will go down with stocks so there's that... Gold is also interesting but I think it's currently probably too expensive. Yet it would be nice to have some shiny coins like uncle Scrooge, not enough to swim in but still...

[@MagicNash89]

@@thetjt There are also different duration bonds in general, so 15-30yr crashed harshly last 3 years, but 7-10 - less so. In fact short duration bonds have even risen a bit, with a great dividend yield. Short and Ultrashort bonds is one of the few assets that holds up, doesnt crash, pays a better dividend during a "rising interest rates" environment, but is not a good place to be longterm. So there is TON of variety. Also long-term bond etf should recoup their losses in the long run when the underlying bonds in the fund mature and through dividend payements, provided nothing changes on the "credit risk" fo the government, it will take a while for 15-30yr ones, but as the old lower yield ones get mature, and new ones - higher yield ones, are bought, and maybe interest rates go down a bit in a few years raising the value of the current higher yield bonds, it looks like a good proposition for diversification.

[@mmabagain]

Vanguard Wellington and Wellesley. 50% each. Retired.

[@lawrencer8673]

If you have an S&P 500 index fund plus a world index fund , the chances are that the world index fund will have 60% USA stocks.

[@power1212]

Over the past 8 years of investing I have gone from 7-8 funds down to just 1, MSCI World.

[@jam99]

And by doing that I would bet you have also a lot more free time. For some, that is just as, or more valuable, than money.

[@tanaychowdhury1589]

2:30 Agglomerative hierarchical clustering !!

[@beresd]

50% HSBC All world / 30% L&G tech / 20% fundsmith

[@ivanbeacon5883]

The issue is the £ is becoming worthless. It will soon be like the Turkish lira, thanks to the magic money printers. So investing in portfolios that give 6% mean youre loosing money. KZbins completely ignore this as their primary incom stream is shilling & paid promotions.

[@jam99]

Are you a Kremlin bot?

[@philiplythgoe7173]

l invest coz l like it, no intention of ever spending the money. Nowt better to do.. HELP, LOFL

[@keithlos1497]

Same...once a long term saver it is hard to change that mindset.

[@coderider3022]

10:33 This is what Dave Ramsey doesn’t get !

[@jam99]

It's good advice not to read stocks and shares magazines.

[@boombustinvest]

NEVER EVER EVER EVER EVER BUY A BAILLIE GIFFORD FUND!

[@mrvincefox]

Or you could just buy Bitcoin

[@Bioinformusician]

Love a good scoobi^H^H^H dendrogram!