Swensen’s model investment portfolio is much better diversified than Markowitz’s but that doesn’t always work to your advantage. UK equities, emerging markets, and property have endured a tough 15 years or so versus the developed world. Tim believes that you should change the asset mix to protect your wealth as you approach retirement The defensive asset mix of the Smarter Portfolios only uses short dated UK index linked gilts, or conventional long dated gilts. Never conventional short dated gilts.

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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: investors underperform by possibly 6% to 7% pa (( These poor results were for the US and Germany – UK investors seem to be a bit better, underperforming by “only” 4% pa )) this is all about “thinking fast and slow”– making sure that your intuitive brain doesn’t overpower your reflective one active funds charge a percentage of assets under management, and so marketing is more important than performance If DIY investing were taught in schools then Smarter Investing would be the core textbook. Indeed because it’s your money on the line you’ll surely be more motivated than any class of 16-year olds.

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We’ve also included shortcuts with each to a comparable portfolio on the low-cost InvestEngine platform, as an illustration. 1

Smarter Investing (Financial Times): Hale, Tim: 8601404489112 Smarter Investing (Financial Times): Hale, Tim: 8601404489112

That is, I really needed less annual flooring for less years in the Gap from RE to starting my DB; a two-fold effect (or double-positive if you prefer). Unless saving for something specific, such as school fees, house deposit etc, I suspect most people start investing with a vague notion that it’s better over the long term than saving – which hardly amounts to a clear objective. I guess this may be why various ‘glidepath’ or ‘life-styling’ features are common in pension funds. 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. Part of the reason Smarter Investing is invaluable to a DIY investor is because Hale clearly describes the many choices you’ll have to make, and how to think about resolving them. So take the time to think about who you are and what you’re trying to achieve. If you don’t know yet, then the Markowitz portfolio is a great place to start.

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Is this purely due to preferring short bonds to long bonds in the current climate, or is it a change of reasoning about the benefit of long bonds to balance a high equity allocation? Note, we’ve used a money market fund in place of cash, but high-interest savings accounts will do just as nicely. Superdrug adds new 'VIP Rewards' offers to its existing loyalty scheme – here's what you need to know

Smarter Investing - Pearson Smarter Investing - Pearson

MoneySavingExpert.com is part of the MoneySuperMarket Group, but is entirely editorially independent. Its stance of putting consumers first is protected and enshrined in the legally-binding MSE Editorial Code. We often get asked ‘are we too small (or too big) to work with you?’. It is not about size but about attitude. If a firm is focussed on financial planning, puts its clients at the centre of all that they do, and if they want to manage an inhouse investment proposition that is based on the evidence and theory available, then it is likely we will be a good fit. That is provided you like us and vice versa! Like our financial planning clients, we are looking to work with firms over the long term. Hale has also downgraded the return expectations for his range of model portfolios that form the centerpiece of the book. The effect is most pronounced on portfolios with a heavy bond allocation, but the drag was enough to make me wince even on a 60:40 equity/bond allocation. That said, his emphasis on TER was a real eye opener for me. I had previously been somewhat complacent about this and I now realise that I have a couple of funds both of which are above 1% TER (1.69% and 1.96% – ouch). In addition I had also paid 5% up fronts on a couple of funds. If I knew then what I know now … Tim Hale has written a book of investment wisdom and common sense for the ages. Investors who follow his simple advice will be richly rewarded."I’m invested in Vanguard’s LifeStrategy 40% Equity fund, partly because of Accumulator’s earlier post at http://monevator.com/vanguard-lifestrategy/.