Gyroscopic Investing

Hi everyone,

I'm a newbie investor who finished reading of the PP book (https://www.amazon.com/Permanent-Portfo ... 1118288254) a few days ago. The theory described in the book sounds reasonable to me and I believe that PP is a good starting point for investing.

I settled in the UK after moving from CIS region two months ago. I work in a big tech company and don't think that the UK will be my final destination point. Most likely I will try to move into the US in a few years. So i believe it makes sense to stick to the UK analogues of the US funds described in the book.

I ended up with Fidelity as a brokerage and the next list of funds for my PP:

Stocks - Vanguard U.S. Equity Index Fund GBP Inc (https://www.morningstar.co.uk/uk/funds/ ... F000003YD8)
Bonds - IBTL (https://www.morningstar.co.uk/uk/etf/sn ... 0P000159YO)
Gold - SGLN (https://www.morningstar.co.uk/uk/etf/sn ... 0P0000SV4I)
Cash - IBTG (https://www.morningstar.co.uk/uk/etf/sn ... 0P0001D4HF)

What are your thoughts on this selection ? And what list of funds do you use for your UK/Europe PP ?

Well.... I live in Australia so cannot be specific, however since you will be moving between countries, how about this?

Whatever country you move too, just change the cash allocation to the local currency.
You can model on Portfolio Charts & would be worthwhile to read Smiths posts regarding diversified Canadian portfolios.

Essentially, its an 80% International PP with 20% local currency.

https://wiki.earlyretirementextreme.com ... ide_the_US

PS: Consider using a tax sheltered account
<snip>
What is the UK equivalent of a 401k?
If you're employed, and your employer also contributes to your pension pot, the UK equivalent of a US 401(k) appears to be a Defined Contributions Pension Scheme – where contributions have tax reductions applied to both the investment and returns.
<snip>

Thank you for the response.

"Portfolio Charts" looks great, I will spend some time learning how it works and checking various portfolios.
Unfortunately most of the links here https://wiki.earlyretirementextreme.com ... ide_the_US doesn't seem to be working.

There is an investment ISA (Individual Saving Account) account that allows you to invest some amount of money without paying any taxes. This amount is 20.000£ this year. Also 12.000£ of capital gain outside of ISA are also tax free. So if you are married it's even possible to double this allowance.

I decided to opt out from a pension scheme as this money can't be used until you are 55 and most likely i won't be in the UK this time.

Could you please share funds that you use in Australia ?

Sure

Outside my retirement account I use the GoldSmith PP ie: Aussie GoldSmithPP - 25% PMGOLD, 75% VDCO
PMGOLD didn't exist when I started the PP, so I am using an Allocated Gold account at the Perth Mint.

Using different funds in my retirement accounts due to historical reasons, however if I was starting again I would just use Smiths approach.

https://www.vanguard.com.au/personal/pr ... 9/Overview
https://www.perthmint.com/storage/perth ... d-asx.html

Perhaps 3/4 of 40% Equity fund in the UK and 1/4 Gold ?
https://www.vanguardinvestor.co.uk/what ... l-products

Note for Smithy: Your fame has spread to the UK

Hal wrote: ↑Mon Nov 16, 2020 9:06 pm Note for Smithy: Your fame has spread to the UK

I'm so honoured!

For you in Australia gold choice is pretty straightforward

Your allocation in Australia and allocation you proposed for the UK looks reasonable. But are there any other advantages except of reduced costs for management and rebalancing in using a single composite fund instead of a dedicated fund for every asset ? Such funds (e.g. VDCO) maintain 33.3% allocation ratio between assets, right ?

choojoyq wrote: ↑Thu Nov 19, 2020 2:53 pm For you in Australia gold choice is pretty straightforward

Your allocation in Australia and allocation you proposed for the UK looks reasonable. But are there any other advantages except of reduced costs for management and rebalancing in using a single composite fund instead of a dedicated fund for every asset ? Such funds (e.g. VDCO) maintain 33.3% allocation ratio between assets, right ?

The gold choice was very easy. Even used to gold pan as I grew up in a gold mining area

Regarding VDCO;
<snip>
The ETF targets a 70% allocation to income asset classes and a 30% allocation to growth asset classes.
<snip>


In a small economy such as Australia, VDCO offered international diversification, as banking and mining accounts for around half the capitalisation of the ASX200
<snip>
The same pattern ought to work in any country that has a reasonably diversified domestic stock market, short term government bonds, and long term government bonds.
An investor in a country that lacks those prerequisites might consider building a PP based on the US, or whichever developed nation is most influential on the local economy.
<snip>


You could construct the allocation from individual components but it was just a lot easier to use a single fund.

Funds Percentage
Vanguard Global Aggregate Bond Index Fund (Hedged) 42.10%
Vanguard Australian Fixed Interest Index Fund (Wholesale) 18.00%
Vanguard Australian Shares Index Fund (Wholesale) 11.90%
Vanguard Cash Reserve Fund (Wholesale) 10.10%
Vanguard International Shares Index Fund (Wholesale) 8.40%
Vanguard International Shares Index Fund (Hedged) - AUD Class (Wholesale) 5.50%
Vanguard Emerging Markets Shares Index Fund (Wholesale) 2.00%
Vanguard International Small Companies Index Fund (Wholesale) 2.00%
Total 100.00%