Having just finished Tim Hale’s book, ‘Smarter Investing
‘, I could say that I wish I’d read this before I’d started my own investment journey.
But actually, I won’t.
How is one to learn without making a few mistakes along the way? Perhaps it’s easy for me to say this because the mistakes I’ve made thus far haven’t been costly.
I have enjoyed bumbling my way through FI blogs, investment and financial websites this past year, doing my own thing.
What Hale’s book has done is confirm that I’ve done some things well and other things not so well and it’s put me on the right track to correct the latter.
Anyway, here’s a well written review of the book.
Back To School
At times, I did feel like I was reading a textbook back at school, my eyes glazing over a bit and I was half expecting an exercise or question to work on at the end of each chapter!
However, most of it was written in a friendly, informative way.
Takeaways from the Book
Useful snippets I’ve gotten from the book include:
- Diversification is not all about better returns, it’s about risk reduction
- Ignore short-term market noise
- Build a “portfolio for all seasons”
- Stick with your portfolio mix
Anyway, here’s what I came up with for my ‘Portfolio For All Seasons‘:
Current Allocation vs Target Allocation for my “Portfolio For All Seasons”
As you can see, my current allocation is totally skewed towards the UK (‘home bias
‘ at its worst!) and I have some rebalancing to do, which I’ll either do by investing cash in funds that need more allocation or switching a couple more funds.
The allocation is still pretty aggressive (90/10 equity/bonds) but I’m planning to stick with it for a few years, or rather, stick with it once I’m at my target allocations.
In this post
, I listed all the various funds I’ve invested in – my portfolio was described by one person as ‘crazy’ and I guess it is! My next investment post won’t list each fund, it’ll be a variation of the above portfolio mix table because that’s all I really need to update and keep track of, to ensure that I’m sticking to my plan. Perhaps a comment on particular funds I’ve invested in during that month or a note of how much my portfolio has grown (or not, as the case may be).
Also, I think I’ll include my shares under the ‘Domestic Equity’ bracket, even though it seemed like Hale only mentioned having funds in the portfolio.
Hale also points the reader to SensibleInvesting.tv, which provides lots of great videos about passive investing, featuring the likes of John Bogle, Rick Ferri, Hale himself and others (whom I hadn’t heard of before but that’s not unusual!)
And the final good bit of advice from Hale?
- When the going gets tough, choosing to do nothing should be the default strategy
All in all, an excellent reference book which I shall be reading again to ensure I don’t deviate from my plan!