Like anything in life, change is often a challenge. Sometimes you start out with the best intentions, but later, those ideas seem naïve. I decided to update my portfolio and this article will give you an idea of my thinking on why I made some investment decisions.

Disclaimer: None of this article or anything on my site is financial advice, it is merely my thoughts on how I decided to allocate my money. You should consult an expert financial advisor before making any decision on how to invest.

The old set up

When I set up my investments about a year ago, it revolved around transferring my pensions into a SIPP. I was ditching the high fee and low performing funds for Vangaurd ETFs.  I really didn’t know what I was doing. However, I live by the tenet that you learn by doing. So I did.

Now I know a lot more, to the extent that I now know how much I don’t know. However I did know that I had to change something.

What changed?

Back in early 2020, the world was our oyster. I had not heard of Covid-19 and I’d just started investing properly.

The UK had officially left the EU and I thought it might take an upturn with that news. I’m not a Brexiteer, but I did have faith in our abilities as a nation. I was hopeful we as a nation might rebound and become a success. Also, I wanted to keep my money in pounds to protect against currency fluctuations. So I bought a large chunk of VUKE which is the FTSE 100 Vanguard fund, and also a lesser amount of VMID which is the FTSE 250.

However shortly after buying, things took a turn for the worse. Covid 19 hit and the stock markets crashed. Then the UK government proved itself to be entirely inept at basic reasoning and decision making. Then we had the fuss about the end of the transition period with the EU, and an atrocious ‘Deal’ that seems to make it almost impossible for British business to export to the EU.

And even more depressingly, we have the same government until 2025.

As this point, my faith in the UK was decimated. The markets had decided and with the FTSE 100 still 12% lower than when I bought it, something had to change. Luckily it’s easy to change when your holdings are in ETF.

What did I do?

Firstly, I decided to move away from my UK biased portfolio. I was being held back by the sluggish economy and the old school nature of the FTSE 100. I sold most of my holdings in the VUKE fund, in exchange for VWRL. I kept a few thousand in VUKE just incase there is a turnaround following the vaccine roll-out.

VWRL is a Vanguard ETF holds shares of around 3500 companies around the world. It’s truly a global tracker. The fee for VWRL is slightly higher (0.22%) than VUKE (0.09%) but I don’t mind that as the returns will be higher than the FTSE 100.

My asset allocation was:

And now it is like this:

I still have a few UK assets but they are significantly reduced. The new issue might be I’m now USA heavy.

If I compare this to the VWRL asset allocation (approximated below), It appears I’m light on European assets and heavy in US assets. That’s probably because I’ve got a large proportion of my portfolio in VUSA (S&P500) ETF.

Current Portfolio

My portfolio has gone from this:

To this:

Target allocation

I don’t have a target asset allocation, and maybe this is something I need to decide on. I picked these funds and this is the outcome. Not the most coherent strategy. I have ambitions to write an investor statement but thats for another day.

I’m happy to be heavy on the US as a lot of growth happens there. I think I might be low on Asia though so I might try to increase this part of my portfolio.

Also, part of me is thinking I should just convert it all into one VWRL fund. That would be simplest. I don’t have the time or knowledge to make truly expert, reasoned, and targeted investment decisions, and therefore this may be the best option for me.

I am happy being 100% equities as I see this as a worthwhile risk to grow my wealth.

Bitcoin

The second change I made was I bought my first bitcoin. After waiting a very long time to get approval from Coinbase to get open an account, I invested £1000. To my shock the fee for that was £50. That is rather high in my opinion! But it’s done now. Let the roller coaster begin.

Again this was done in the learn by doing mentality. I know next to nothing about Bitcoin, but now I have £1000 at stake, it will encourage me to understand it better. That amount is an amount I can easily afford to lose entirely, but enough to make me pay attention.

I keep thinking that if I’d invested my redundancy pay in Bitcoin in August, it would be worth about £100,000 by now. That’s too good to ignore.

Conclusion

After about a month after the change, I’m very pleased to report my investments are growing. VUKE is still struggling along. I seem to have made a good decision.

Bitcoin is still a mystery to me and rather a dark art. It is becoming more mainstream so my FOMO investment is less of a gamble.