https://am.jpmorgan.com/gb/en/asset-management/adv/products/jpm-global-equity-multi-factor-ucits-etf-usd-acc-ie00bjrcll96 Again RFA is less volatile. VGLS max drawdown in 2022 is -15% vs -8% for RFA. VGLS max drawdown during coronavirus crash: -18% vs -17% RFA. Nothing in that one really. Instead of dwelling on yesterday’s winners, this selection of model investment portfolios enables you to answer the question: “what does a rational, diversified asset allocation look like?” crucially, has genuinely internalised the fact that equity markets are volatile in the short term but much less so over a 10+ years horizon.

Smarter Investing - Pearson Smarter Investing - Pearson

When considering your plan, remember that each asset class should play a strategic role in your portfolio.I’ve actually use this instead of a bond allocation now (from beginning of 2022, so worked out well so far). As part of this, starting to think around some of the rules of thumb for sizing bond allocation, and how they could be adapted and improved to safeguard against having too much in bonds, i.e. trying to avoid future overexposure to too richly valued bonds that won’t cushion equity volatility. This is what have come up with so far for a 2 asset global equities/higher quality (intermediate or long AAA-AA) global government bond allocation:

Review: Smarter Investing by Tim Hale - Monevator Review: Smarter Investing by Tim Hale - Monevator

If building wealth to provide a certain level of income is the objective, I suspect the same trade-offs regarding likely success apply to all.Seems that JPLG has more of a smaller bias. It’s largest holdings are 0.3%, whereas FSWD has FB, Apple, Exxon, MSFT, Cisco, Walmart all above 2% each… I remain puzzled that retirees are advised to increase their bond allocation because they cushion the portfolio and are less volatile than equities. Just looking Morningstar data for shares Core UK Gilt ETF (IGLT): 3yr SD 10.2%; 3yr mean return -11%. Vanguard UK Long Duration Gilt fund: 3yr SD 17.1%; 3 yr mean return -18.8%. Compare these to Vanguard FTSE Developed World etc (VHVE): 3yr SD 12.5%; 3yr mean return +13.2%. That’s because the assets enjoy low correlations – they tend to behave quite differently from each other, so can cover for each other’s weaknesses – and also because the portfolio allocates an uncommonly small percentage to equities.

Smarter Investing By Tim Hale | Used | 9780273708001 - Wob Smarter Investing By Tim Hale | Used | 9780273708001 - Wob

The book therefore doesn't cover the difficulties of knowing how to invest sensibly in 2013 when America and Britain are struggling for growth, fears grow in Europe of deflation and prolonged recession, Japan is determined to inflate its economy and is creating a potential currency war and who really knows what the truth is behind the remarkable growth in China. I had a similar thought to @Time like infinity wondering if the Ready for anything portfolio could have equities increased however wondered if 70% equities made much difference.Intriguingly, from 1870, UK government bond yields only made it past the 5% yield mark from 1960 – 2002 (and now of course). For a variety of reasons I then decided to take my DB early once it provided enough to cover, at least, the ‘essentials’ . Which means I have ended up with even more floor assets in the Pot outside the DB scheme.

Smarter Investing by Tim Hale | Waterstones

Unfortunately I can't see what people are getting so excited about and thought it made a dull read. Last few posts resonate with me. I’m 7-8 years away from FI but 95% equities so still carrying substantial risk, although my FI date isn’t a hard stop for RE. I am planning on rebalancing though contributions into a more balanced portfolio such as RFA. As ever we’ve created our investment portfolio examples with ETFs and index funds because we believe that a passive investing strategy is the best investment approach for most people. And if you already have some bonds – I have uk short, uk inflation and global agg ( hedged ) – all at big losses would you hold for now or sell and rebuy if you like this mix ( eg the I did’nt know about the global inflation linked option)Note, we’ve used a money market fund in place of cash, but high-interest savings accounts will do just as nicely. It sounds wonderful but the downside is you need a very large portfolio to generate enough income, even if you choose high-yielding dividend funds – as we’ve done for this load-out.