Comments on: Updating My Investing Strategy

By: Nick

Nick — Tue, 27 Oct 2020 12:03:04 +0000

Personally, I wouldn’t bother using multiple brokers. All your securities will be held in a segregated nominee account with an external custodian, so even if both the broker and custodian go bust your investments will be safe. You do always have the option of requesting paper certificates which you can keep in a bank deposit box – but brokers do not like this and will charge hefty fees for it.
Like you, I make regular monthly investments (in my case half my salary) and re-invest dividends. I have found that the best value for me is Interactive Investor as they charge a modest flat fee and offer a full range of investments. My monthly investments are made at no cost using their regular investment plan. Other occasional trades usually cost nothing as the flat fee includes some free trades each month but if over that limit the cost is only £4/deal.
On tax, so far as possible I try and keep dividend paying funds in my SIPP and ISA, and for those outside those wrappers will look to funds that pay no or very low dividends, e.g. SMT, MNKS, PCT, and from time to time bed and breakfast them to minimise CGT.
The only sector specific area I am in at the moment is Tech, other funds are either generalist global or geographic, with an emphasis on quality growth over value. I remain unconvinced by the UK, so only about 5% there.

By: HariSeldon

HariSeldon — Sat, 24 Oct 2020 12:29:42 +0000

Isa can be passed onto a spouse on death and remain in an isa tax wrapper.

By: Alice Holt

Alice Holt — Sat, 24 Oct 2020 10:21:34 +0000

My guidelines are very similar to yours ITinvester.
I started in the early 80’s with a plan to build capital from spare income.
I sought low cost, tax efficient investments and by the late 80’s was regularly investing in global IT’s (Bankers, Alliance, Scottish Mortgage) through the IT saving schemes, alongside a UK tracker fund.
I still hold those IT’s, in fact global IT’s (together with All World tracker funds) form the backbone of my current portfolio.

Now drawing my pension (but still working part time for an advice charity), an increasing chunk of my portfolio is now held in wealth preservation IT’s (PAT & CGT).

I take a more adventurous stance with my SIPP, and with the SIPP’s I am funding for my nieces. I’m taking advantage of the IHT tax benefits outlined by John B. The assets in my SIPP (with my nieces as beneficiaries) won’t be subject to 40% IHT but have benefited from the 20% tax uplift.
My contributions to the SIPP’s in their own name take advantage of the IHT rules around gifts from surplus earnings (and the 7 year rule). Again it has benefited from the tax uplift.

It meant I could continue to help with their futures, knowing that they couldn’t blow that money at age 18 / 21. It will certainty help them in their middle years, as the necessity for them to put large sums away for their retirement is greatly reduced.

By: Festerarl

Festerarl — Thu, 22 Oct 2020 17:23:02 +0000

I’m building up my knowledge of investing now that I’ve taken early retirement and am happy to have found this blog. It’s very interesting and gives me food for thought. I do follow a number of YouTubers too which is informative. Many of these are related to understanding company accounts, although I am not really planning to invest in single company shares – ITs and OIECS plus trackers are my favoured funds and have been for some time. Thanks

By: John B

John B — Thu, 22 Oct 2020 17:09:52 +0000

No private pensions and SIPPs are passed on tax free to beneficiaries if you die before 75 but after 75, they may pay tax on withdrawals. In any event there is no IHT to pay from DC pensions. Therefore if IHT is likely to be an issue, keeping funds in a pension is highly tax efficient from an IHT perspective.

Great blog BTW.

By: ITinvestor

ITinvestor — Thu, 22 Oct 2020 16:47:28 +0000

In reply to David Naylor. Thanks David, that's definitely worth highlighting and something I will need to bear in mind when the time comes. My understanding is that it is only free from inheritance tax if you die before your 75th birthday.

By: David Naylor

David Naylor — Thu, 22 Oct 2020 16:28:12 +0000

Depending on your particular financial situation, it is not always a wise move to move funds from a SIPP to an ISA. Remember SIPP funds are inheritance tax free on death, ISAs are added back into your estate for IHT calculations.

By: ITinvestor

ITinvestor — Thu, 22 Oct 2020 15:35:45 +0000

Thanks Global Investor – sounds like your performance has been excellent given those names you’ve mentioned. I don’t think I could ever claim to as disclipined as Buffett though!

By: Global Investor

Global Investor — Thu, 22 Oct 2020 15:23:16 +0000

Thanks IT for a very enlightening presentation,

You have outlined a large part of your personal investing strategy including the 10 point plan. You are as disciplined as Buffett !!!! I regret that I am not as disciplined as you and tend to hold on to ascending winners and those that disappoint get ruthlessly kicked out so would be paying more in charges. One obviously has to balance the transaction costs with the expected better returns. I have been investing heavily in US Tech for the past 5 years and it has paid off well. Apart from owning the high flyers – Apple, Alphabet A, Facebook, Paypal (previously Square), Visa and SMT I have bought the likes of Datadog, Etsy, Bill.com and Unity Software which have surprised me as maybe one potentially is the next big one. I also held Tesla and sold at a good profit.I have been very disappointed with LSE stocks which have all been AIM ones. For the last 9 -12 months they are going around in circles up one day and down the next so have culled a lot of them leaving me with two – Hilton Food and Team 17. I have one other UK Trust – J P Morgan China Growth & Income (JCGI) which has impressed me. I have 3 other large cap US and 3 EU stocks. There is one certainty in stock investing is that there is “no certainty”. At this time I think markets could surprise us further between now and end of year ??? Biden as President outright winner will be a major boost to markets if it were to happen IMO. Business likes certainty and don’t appreciate the Trump wrecking ball but afraid to come out and say so. Good luck with your excellent investing plan.