Gyroscopic Investing

This question has probably been asked many times before, but here goes :-

As a UK Investor for the Permanent Portfolio the Gold Allocation is straightforward.

However for stocks does the PP point to the use of a wide UK Index Fund (FTSE All Share), a Global World Index Fund (MSCI World), or a US Index Fund such as S&P 500, Russell 1000.

Again for long term Gov't Bonds, should they be US Treasuries, Global Gov't Stock Funds or UK Gilts. 

And how about Cash is Sterling OK?


My preference is to hold Stocks in a Global World Index Fund, Bonds in UK Gilts, Cash in Sterling.

magneto wrote: My preference is to hold Stocks in a Global World Index Fund, Bonds in UK Gilts, Cash in Sterling.

That's the best way.  You want to own assets in the same economy, preferably the one of the country in which you live.

There's some quick posts on UK implementation here;

http://gyroscopicinvesting.com/forum/index.php?topic=93

and here

http://gyroscopicinvesting.com/forum/in ... ?topic=506

Clive also has a more indepth guide online (but it's down at the moment)

There's a short and sharp UK ETF PP about half way down this page;

http://monevator.com/2010/10/19/9-lazy- ... tors-2010/

Personally I hold T46 for Gilts, VVUKEQ for stock, PHGP for Gold, Cash spread around a few high interest accounts. There are of course many different ways of implementing it based on your own preferences.

The PP is relative to the country you live in.  So I would buy a mutual fund or ETF based on the broad UK stock market, hold Sterling as cash, gold is gold obviously and long dated UK treasuries

Adam1226 wrote: That's the best way.  You want to own assets in the same economy, preferably the one of the country in which you live.

I agree with this line of reasoning, but IMO its conclusion is that, of the options listed, UK Index Fund (FTSE All Share) is best.

I am not an expert by any means, but for what it's worth, I have 25% each of:

Stocks:  of which half is FIMNI (Fidelity UK Index Moneybuilder OEIC based on FTSE All-shares),  and a quarter each MDFTIA (HSBC FTSE 250 OEIC), IXWU (IShares FTSE ex-UK ETF). I wanted to diversify a little, but over six months, I'm not sure that there's been that much difference in performance between the three. I would have been happy with just the Fidelity I think, but am not unhappy with what I have.

Gilts: UK Treasury T42 4.25% maturing in 2042

Gold: 2/3 BullionVault, 1/3 PHAU (iShares Physical gold ETF)

Cash: mixture of cash ISAs, NSANDI Index Linked certificates, Premium Bonds etc.

To be honest, I could never really follow the arguments over the cash element and using money funds. I couldn't find anything that seemed similar in the UK and on the grounds that if you don't understand something, don't invest in it, I decided just to use up my ISA and other non-taxable avenues instead.  They are all well under the limit for the government guarantees so they are as safe as they can be, I suppose, and at at least I'm getting some interest on them.

I hold the gilts and most of the index funds and ETFs through Interactive Investor (iii.co.uk): everything can be done online apart from buying the gilts, which must be by phone. I've always found them very helpful.

Off topic, but Clive has the slickest avatar I've ever seen.

Well done.

Thanks to everyone for the responses.

As regards LT Bonds is there any problem with undated Gilts, e.g. 3.5% War Loan.  You can't get longer than undated.  If they rise to par and are called in, then a switch can me made at that time to an alternative.