Thursday, 11 March 2010

My Current Low Charge Portfolio – March 2010

Buying (New money): Since my last post I have saved 83% of my net earnings. In addition some more good news was that significant earnings that I had been waiting on for the past year were paid to me this month meaning my total savings amount was also very large at 6.1% of my Low Charge Portfolio assets. These were allocated as follows: 84.7% to cash, 2.3% to UK equities, 3.2% to international equities, 0.6% to index linked gilts and 9.2% to UK commercial property. This money was invested both outside of any tax wrappers and also within a pension. Unfortunately no investment was made into my stocks and shares ISA as I have already made my £7,200 worth of contributions. I am eagerly waiting for the new ISA year starting on the 06 April 2010.

Asset Movements from my Retirement Investing Portfolio: As I detailed here I also moved a further 0.6% of my total retirement investing assets from cash to gold. The timing of this couldn’t have been more perfect and this has already seen a capital gain of 6% mainly through the devaluation of the pound.

Selling: Nothing this month

Dividends: No dividends paid this month

Current UK Retail Prices Index: 3.7% up from 2.9% last month

Current Annual Charges: 0.57% down from 0.59% last month

Current Expected Annual Return after Inflation: 4.1% which is the same as last month

Current Return Year To Date (from 01 January 2010): 1.7% which is up from -2.8%

How close am I to retirement: A good month from both the market and my new contribution meaning I have gone from 39.7% to 44.5% in a single month. Retirement can move further or closer each month and is affected by movements in asset allocations, asset prices or additions/withdrawals to my current low charge portfolio.

The following are the highlights for the month:

- Desired Cash portion moves from 11.5% to 10.5. This month I have moved yet further from the desired by going from 14.0% to 17.2%.

- Desired Bonds portion doesn’t move from 17.4%. This month I have moved closer to the desired by going from 20.8% to 18.5%.

- Desired Property stays constant at 10.0%. This month I have moved further from the desired by going from 8.1% to 7.9%.

- Desired Commodities stays constant at 5.0%. This month I have moved closer to the desired by going from 3.2% to 3.7% with the gold purchase.

- Desired International Equity portion moves from 13.3% to 13.5%. This month I have moved further from the desired by going from 13.1% to 12.8%.

- Desired Emerging Market Equities stays constant at 5.0%. This month I have moved closer to the desired by going from 2.7% to 2.8%.

- Desired Australian Equity portion moves from 19.2% to 19.6%. This month I have moved further from the desired by going from 19.5% to 19.4%.

- Desired UK Equity portion moves from 18.6% to 19.0%. This month I have moved further from the desired by going from 18.6% to 17.8%.

My total equities allocation is now 52.8% across all markets and has now fallen a long way from the desired allocation of 57.1%. One of the big causes is that the majority of my new money entering has been allocated to cash. I am going to have to seriously consider adding to my equities allocation. The worst deviation I have is my emerging markets allocation which is 2.2% away from desired. I am however a little nervous about adding here as I am exposed to both currency as well as market risk when buying this asset class and as I’m sure all readers are aware the British pound has not been performing well against the world stage. This therefore is making me think that I will add UK equities. Of course, when I make decision I will be sure to post details.

As always DYOR.

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