Growing and preserving to help our children

"My main objective is to look after the capital, and benefit from compound dividend reinvestment and capital growth over time," says Jeffrey. "We plan to use the funds for the benefit of our children, for example paying for university fees and first home deposits.

"We shouldn't have a short-term need for this money - I have enough cash outside of this portfolio to cover our needs should things go wrong, so my timescale is long term. If another 2008 happened I would see it as an opportunity to accumulate quality holdings at higher dividend yields.

"I believe in the powers of compound interest and defensive investing and, although prices look high, they may remain so if politicians keep quantitative easing (QE) going, so I will keep reinvesting dividends.

"I would like a well-balanced portfolio of global stocks, although I believe global growth will be strongest in Asia and other emerging markets.

"I think many large companies will not be around in the future due to technological disruption, and I would like to try to benefit from this disruption, while also trying to invest in companies that are hard to disrupt because they operate in an area with high barriers to entry.

"I have also been thinking about whether I should have exposure to Japan or areas such as biotech.

"I don't think corporate bonds or government debt at current prices are good investments, hence my high allocation to UK property-focused investment trusts, Empiric Student Property (ESP), Tritax Big Box REIT (BBOX) and MedicX Fund (MXF). These also act in my portfolio as bond proxies.

Jeffrey's portfolio

THE BIG PICTURE

Chris Dillow, Investors Chronicle's economist, says:

You've got a good weighting in defensive stocks, which we know tend to outperform on average over the long run. I also like the use of collective investments as a way of diversifying the long-term danger of creative destruction, as technical change could destroy companies that look well-established today.

Buying cheaply when the market falls is a good strategy, and remember that investment trust discounts relative to their own history can be a guide to when sentiment is unduly depressed.

You seem to be about as well diversified as an equity-heavy portfolio can be. International diversification doesn't usually help very much, because most stocks are sensitive to swings in the global market. But your holdings of defensives, BlackRock Frontiers Investment Trust (BRFI) and CQS New City High Yield Fund (NCYF) do spread some risk.

Don't be distracted by the fear of missing out, as this can lead you to overdiversify and end up with an expensive version of a global tracker fund.

I mention this because you ask whether you should have more exposure to Japan. You already do, simply because the circumstances in which Japanese stocks do well are likely to be ones in which Asian and emerging markets do well. Consider in what circumstances Japanese stocks would do well when your other holdings wouldn't. I find it hard to envisage such events.

Daniel Adams, senior investment analyst at PSigma Investment Management, says:

Your age and financial profile would support a higher allocation towards equities as shown by your ability and willingness to take risk. While I would begin by allocating to higher-yielding assets in the Isas, I wouldn't preclude other investments, and always encourage investors to maximise their Isa allowance each year as any capital gains will also be exempt from tax.

Despite the headwinds in the short term, demographics, urbanisation, a growing middle class and improvements in productivity should see Asia and emerging markets continue on a positive trend. Nevertheless, emerging markets are vulnerable to idiosyncratic shocks and a balanced allocation across equities, so both developed and developing would make sense. And you will need to take an extremely long-term view, particularly given the emerging markets trends you have identified are very long term.

Having a total return perspective is the only way to look at investments as high yields often indicate stress in the business and a probable dividend cut. However, studies show that focusing on companies with a strong dividend culture - and not necessarily high dividends - have tended to outperform, largely by enforcing greater capital discipline in the business.

Given that you like a number of thematic plays, such as technological disruption, biotech and emerging markets, building a core portfolio with a number of satellite positions might be the best structure.

Jason Hollands, managing director at Tilney Bestinvest, says:

You have a substantial investment portfolio at a young age and a long-term timescale so can afford to take on a relatively high level of risk.

These are mainly well-managed investments, but I think the split across asset classes and geographies needs revisiting. Having 70 per cent exposure to equities is not overly aggressive given your circumstances, but the picture is very different when you consider the underlying positions.

You are excessively exposed to Asia ex Japan and emerging markets. Together these regions account for a third of your equity portfolio via regional investment trusts and Scottish Mortgage Investment Trust. And within Asia and emerging markets you have quite high weightings to small and mid-cap stocks.

Although these regions provide long-term growth opportunities they also expose you to very considerable risks.

In particular, China has accumulated the most rapidly built mountain of debt in history, with the Bank of International Settlements recently warning that it faces a potential credit crisis within three years. A victory for Donald Trump in November's US presidential elections represents a major event risk for emerging markets as he advocates tariffs of up to 45 per cent for China and other steep hikes for Mexico.

A further material risk is the prospect of further monetary tightening by the US Federal Reserve, which has been signalling a rate rise by the year-end. This would trigger a strengthening of the dollar, which would result in a squeeze in debt servicing costs for emerging market companies that have borrowed heavily in dollar-denominated bonds.

You have no exposure to Japan, the world's second largest stock market. Although many investors dismiss Japan on the basis of its ageing population, it is home to many world-class, international companies. At a time when dividend growth in the developed world is variously slowing or contracting, payouts from Japanese companies are rising from a low base, with considerable headroom for further increases as 55 per cent of Japanese companies are net cash positive, compared with just 20 per cent of US companies. Policy in Japan remains supportive, with very loose monetary policy, a recently announced fiscal stimulus programme and a boost from the forthcoming Tokyo Olympics, which should attract 40m visitors.

HOW TO IMPROVE THE PORTFOLIO

Chris Dillow says:

This portfolio carries liquidity risk as well as market risk. In the event of a serious downturn your property investment trusts and perhaps BlackRock Frontiers might suffer because their assets would become difficult to trade. If you're a genuine long-term investor, this might be a virtue because such assets should do well in normal times to compensate for this liquidity risk. But you can only reap this risk premium if you really are a long-term investor.

Many people who think they are long-term investors give up during bad times. Ask yourself whether you really have the discipline and means to stay the course. And check that your cash holdings really are enough to maintain a high exposure to risk in this portfolio.

Be wary of chasing growth, which you think will be strongest in Asia. We know that in a number of countries long-term economic growth doesn't translate into stock market returns. Asian stocks might do well if China surprises us by growing faster than expected, but this is a risky bet.

Thirdly, beware that when you mix stocks and funds you can end up duplicating holdings. For example, Scottish Mortgage Investment Trust (SMT) has 10 per cent of its assets in Amazon (AMZN:NSQ), which you also own directly.

And you ask whether you should have exposure to biotech, but you already do: Scottish Mortgage's second-biggest holding is genomics company Illumina (ILMN:NSQ).

I don't think any of this warrants rejigging your portfolio. But it's something to watch.

Daniel Adams says:

You should review your allocation to Japan as a number of factors should provide an incredibly favourable backdrop for Japanese equities over the medium term.

Japanese equities are trading at attractive valuations, both on an absolute basis and particularly relative to other international equity markets. There is a wholesale change in corporate mentality at a national level with an increasing focus on shareholder returns. And the economy has a very favourable business cycle, with the central bank firmly in the accommodative camp, as other regions look to start tightening policy. The Japanese Yen will have a huge impact on returns, so I would consider a sterling hedged fund such as Goldman Sachs Japan Equity (LU1474194062).

Biotech has had a fairly torrid time over the past twelve months largely due to the negative rhetoric of the presidential candidates in the run-up to the US election. But healthcare generally is a sensible long-term investment given the positive growth dynamics of the industry, due to an expanding and ageing global population. Healthcare should also add some defensive characteristics to your portfolio as earnings in the sector tend to be relatively resilient in times of crisis and many pay a healthy dividend. We access the sector via the Polar Capital Healthcare Bluechip Fund (IE00BPRBXV28). Polar Capital has an experienced healthcare team and a range of funds you can choose from, including one focused on biotechnology (IE00B42P0H75).

I would suggest reducing your large exposure to UK property, particularly Empiric Student Property. The recent volatility around Brexit shows the risk of investing such a large chunk of capital in a single strategy.

While I broadly agree with your concerns about valuations of bonds, there remains pockets of opportunity, so I would add some exposure to further diversify the portfolio. US high yield offers returns of 5 to 6 per cent, which are incredibly attractive and broadly comparable with long-term equity returns. But with bonds you are higher up the capital structure so safer in the event of a default.

In a low-growth world where corporate profits are crimped by meagre revenue growth the backdrop looks far more supportive to credit than equities. And given your view on emerging markets and Asia, some exposure to emerging market debt might also be appropriate.

Jason Hollands says:

Your exposure to UK and US equities is largely through a handful of large international stocks. While these are quality businesses, there is a lack of diversification in these key markets and you are missing out on the more dynamic, historically higher-returning parts of these markets, notably small and mid-cap stocks.

Conversely your European equity exposure, principally gained via European Assets Trust (EAT), is the other way around as this is mainly invested in small and mid-caps. You could migrate some of your UK equity exposure into Liontrust Special Situations Fund (GB00B57H4F11), which invests across the market-cap spectrum.

Outside of equities, your primary exposure to other asset classes is via property funds (19 per cent) and high-yield bonds (6 per cent), with a small allocation to commodities.

Your UK property exposure is too high given you are a growth investor. A little exposure to absolute-return funds would provide a more steady component to the portfolio, as could some infrastructure. Options include JPM Global Macro Opportunities (GB00B4WKYF80) and Lazard Global Listed Infrastructure Equity (IE00B5NXD345).