/ PLATFORMS / have exposure to growth , wherever it happens . Geographical and sector diversification should be high on your list of priorities for your portfolio going forward .
A very useful tool on Trustnet Direct shows you how well diversified your portfolio is and highlights overweight positions ( by asset class , region and sector ). You can view it here .
ACTIVE MANAGEMENT Passive or tracker funds – meaning those that aim to replicate the performance of a particular index , such as the FTSE 100 – have done well over the last year , but can they deal with the uncertain markets we face ? My opinion is that a real fund manager making active asset allocation decisions on behalf of investors is a better bet than simply aiming to track an index .
Personally , I keep a mix of both active and passive funds in my retirement portfolio , but I will definitely focus on the former in the future .
I am also sticking to the managers that have performed consistently
10 % 8 % 6 % 4 % 2 % 0 % -2% -4% -6% -8 %
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Source : FE Analytics
Your retirement is not the end of your pension strategy – merely a halfway point
over the long term . Look out for FE Alpha Managers in particular as this title is awarded for consistency , rather than flash-in-the-pan shorter term performance .
GET MORE INVOLVED , BUT STICK TO A STRATEGY
If you are reading this , you are likely to be a savvy investor with a plan ( unlike the vast majority of the UK population , who retire with less than £ 50,000 in their pension pot ).
I can ’ t stress enough that having a plan and sticking to it is important and seeing that strategy come to fruition over the longer term will put your mind at ease . Using portfolios and portfolio planners really helps to visualise how your
PERFORMANCE OF INDEX SINCE 23 JUNE
FTSE All Share ( 6.75 %)
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01 Aug 04 09 12 17 22 25 30 investments are doing and again the Trustnet Direct portfolio can help . There are a range of tools available that can highlight poor performers , help with asset allocation decisions , show you news affecting your investments and a goal tracker to see if you ’ re on track with your targets . Have a look for yourself here .
However , I ’ d counsel against “ daytrading ” your investment portfolio . Don ’ t sell and buy funds on a whim , but take a longer term view . Just because a fund is experiencing a short-term dip in performance , this doesn ’ t mean it won ’ t be a top performer over the long term . We ’ re in for a volatile ride over the next few years , so avoid knee-jerk reactions when it comes to your portfolio .
THINK LONG-TERM It is vital when drawing up your plan that you take a long term view and remember that your retirement day is not the end of your pension strategy – merely a halfway point . With pension freedoms in place , you can continue to increase the value of your portfolio well into retirement . With uncertain times ahead , the longer your retirement , the more time you will have to iron out the economic bumps we will encounter .
In the most recent issue of Trustnet Magazine , we discussed a longer term strategy in which you enter retirement with a higher risk portfolio and a cash buffer , offering you greater growth potential and spare money to use in down markets .
Giving up on your investments at retirement could rob you of a further 20 years of growth and if you ’ re about to stop working , you can ride out the Brexit storm by stretching out your time horizon .•
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