I’ve chosen them because each offers a different perspective on asset allocation that you can customise to suit your personal financial objectives, circumstances, and temperament. I remain puzzled that retirees are advised to increase their bond allocation because they cushion the portfolio and are less volatile than equities. Just looking Morningstar data for shares Core UK Gilt ETF (IGLT): 3yr SD 10.2%; 3yr mean return -11%. Vanguard UK Long Duration Gilt fund: 3yr SD 17.1%; 3 yr mean return -18.8%. Compare these to Vanguard FTSE Developed World etc (VHVE): 3yr SD 12.5%; 3yr mean return +13.2%. We’ve also included shortcuts with each to a comparable portfolio on the low-cost InvestEngine platform, as an illustration. 1 It also matters that gilts have low correlations to equities so when equities crash the diversifying potential of government bonds tends to come to the fore. Though not always. https://am.jpmorgan.com/gb/en/asset-management/adv/products/jpm-global-equity-multi-factor-ucits-etf-usd-acc-ie00bjrcll96

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If you’re struggling to push the button and finally invest for real, fear not. It happened to me and many better investors besides. You are not alone. I suspect it’s just variants of cash buffer conservatism and there is no hard and fast answer. The 3/6 months living expenses really comes AIUI from the accumulation phase of life so you’re not forced into a drawdown should you e.g. lose a job or have a short term life event. Once you are actually in drawdown you perhaps don’t need such a buffer and maybe 1/2 months will do plus a plan on how to replenish which would be from your overall portfolio. My inclination is to leave that short term buffer out of the portfolio proper then rebalance/drawdown according to my chosen strategy. In practice if I drawdown once a quarter there might be times my short term cash is 4 months and hopefully never less than 1 month, but I hope I will plan my drawdowns conservatively so there is always more in the tank if needed at the next drawdown. Over estimating ‘essentials’ prior to pulling the plug is not apparently that unusual. On reflection, I was very conservative – but perhaps it is better to be wrong this way rather than under-estimating! As ever we’ve created our investment portfolio examples with ETFs and index funds because we believe that a passive investing strategy is the best investment approach for most people. I guess its unrealistic to expect the free trading platforms to offer us everything but I like InvestEngine’s portfolio features and am considering it for managing my GIA post TFLS crystallisation. Even more attractive if they eventually offer SIPP albeit at a charge.The truth is there is no one portfolio to rule them all. Whichever load-out ‘won’ the last decade or three is unlikely to top the podium in the future. Unless saving for something specific, such as school fees, house deposit etc, I suspect most people start investing with a vague notion that it’s better over the long term than saving – which hardly amounts to a clear objective. I guess this may be why various ‘glidepath’ or ‘life-styling’ features are common in pension funds. The rule of 72 is a useful guide to compounding. You divide 72 by the % change so at a 5% growth rate an investment would double in just over 14 years, and another 14 years to double again (up to 400%). If you only net 3% because of charges, it takes 24 years to double. i.e the financial services industry gets rich but you don't. That’s achieved via the large allocations to long bonds, gold, and cash. They guard your flanks against a panoply of economic threats:

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Note, we’ve used a money market fund in place of cash, but high-interest savings accounts will do just as nicely. That’s the longest timeframe I can get for a representative combo of ETFs. It’s not clear to me how justETF’s portfolio tool handles rebalancing. Rather than the more general risk scenario where people have to draw a reduced DB earlier because they’ve run out of “bridge” before DB commencement age?A solid slug in equities still offers some growth however, while the enlarged UK position reduces currency risk. All-World’s lowest point in 2022 is -13.6% vs -8% for RFA portfolio (this is 60/10/10/10/10 version). JCB – Cheers, I’m glad it helped. In bonds defence, they suffered a historically bad return during that time period. One of the worst on record. That can happen to any asset class. So the last 3 years doesn’t really reflect the long-term potential of government bonds. On the deaccumulation example I wondered if there was a reason why the cheaper BCOG wasn’t suggested for the commodity allocation.

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For a variety of reasons I then decided to take my DB early once it provided enough to cover, at least, the ‘essentials’ . Which means I have ended up with even more floor assets in the Pot outside the DB scheme. That’s because the assets enjoy low correlations – they tend to behave quite differently from each other, so can cover for each other’s weaknesses – and also because the portfolio allocates an uncommonly small percentage to equities. If I have the figures right what would the benefit be over just keeping cash? I appreciate its value decreases with inflation but there would be no risk in the value going down.That is, I really needed less annual flooring for less years in the Gap from RE to starting my DB; a two-fold effect (or double-positive if you prefer). So for an RFA portfolio probably still benefit to finding the HSBC All World on another platform unless I’m missing something? Cash is there as an all-round workhorse providing for immediate liquidity and moderate recession protection. It’s also less vulnerable to inflation than medium bonds. Unfortunately I can't see what people are getting so excited about and thought it made a dull read. FWIW, I am now over 6.5 years RE and recently started my DB pension – around four years ahead of my baseline plan at retirement. I have always used a floor and upside approach; so carried a relatively large amount of non-equities into retirement.