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Am I too aggressively positioned at age 58?

This investor expects to live a long time and doesn't see a good reason to adopt a conservative stance for his investments

Philip is a 58-year-old scientist and worries that his investments are too aggressively positioned, given his age and objectives. He wants to retire at age 65 with income of £25,000 a year (including a full state pension). He has a self-invested personal pension (Sipp) worth £504,000 and an individual savings account (Isa) worth £81,000.

He says: "I have made no contributions to my Sipp since mid-2004, when it was valued at £156,000 so I have benefited from the eighth wonder of the world (compound interest). Most of my investment outperformance can be attributed to a single defensive trade: I converted my entire Sipp to cash in November 2007 and reinvested in January 2009."

His wife is aged 48 and has Isa (£38,000) and Sipp (£7,000) investments that are surplus to her income requirements as she will receive an index-linked pension of £25,000 a year from age 60. She is also eligible for a full state pension.

Their goal is to provide both children with a deposit to buy their first property (£50,000-£100,000 each) and to leave as much as possible of Philip's pension to the children.

Philip says: "If I live to age 90 (my relatives are long lived) my investment horizon is 32 years, so I don't see a good reason to adopt a conservative investment stance. Do you think my investments are too aggressively positioned given my age and objectives?

"I am a strong believer in active management and largely ignore investment costs. I think this makes me unusual given the current trend towards passive fund management and the chorus of advice from financial journalists to focus more on investment costs than investment performance."

Philip wants to know if he has too many funds or has any missing asset classes. He is also considering removing the open-ended funds from his portfolio in favour of investment trusts.

Reader Portfolio
Philip 58
Description

Retirement income & legacy for children

Objectives

Sipp & Isa

PHILIP AND WIFE'S ISA AND SIPP HOLDINGS

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