plonkee money an english-er's thoughts on personal finance

April 13, 2007

i need a strategy

Filed under: investment — plonkee @ 5:38 pm

I wrote here that I think that the best way to decide on which type of pension would suit is to have an overall strategy and then find the provider with the cheapest cost. I also wrote earlier that I have set up my ISAs for this new financial year. So what is my investing strategy?

I basically don’t have one. I have invested all my funds in FTSE All Share Trackers. Its not going to be pretty if the UK goes into a 40 year depression. Why have I done this? Well, I don’t know anything about how to pick actively managed funds, but I am aware that the majority do not beat the FTSE index. And they are expensive. I can pick up a FTSE Tracker for 0.1% annual fee but many managed funds have fees more like at least 1%. Thats ten times as much. So it looks like to me, index funds are the way to go, certainly for now.

I’m lead to believe that I should diversify my portfolio with asset allocation. I have no idea about this. I have a very small pot in three separate locations, two pension funds and one ISA. I need to investigate whether I would meet the minimums for additional funds or investments. But first, I think I need to work out which funds I might want. But fund names are so unobvious. Take one of the top 150 picks from Mark Dampier’s Wealth 150 at Hargreaves Landsdown the Standard Life Global Equity Unconstrained Accumulation Units fund. I’m sorry, how many big words do you need to have in your title?

What I think I need is a bit of money invested outside of the UK. But I’m not sure. I’ve caught financial paralysis. The easiest thing to do would be to do nothing. But that is bound to lose me money. So I’m doing what I think is the second easiest thing, despite my detractors. I’m investing in something that I understand. Hopefully sometime soon, I’ll learn enough to make a more informed strategy.

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