David Ayres, 62, was lucky enough to retire at 55 with a good company pension, which covers much of his day-to-day living essentials.
Alongside this David has an extensive investment portfolio, which he continues to invest for capital growth. This is to help fund his current lifestyle, be it paying for holidays or a new car — as well a potential financial buffer should his grown-up children need financial support.
David, who lives in Glasgow, has been “dabbling in shares” for around 40 years. “When I started I have very little to invest. But my appetite was whetted initially by the introduction of staff profit sharing by my employer and the privatisations of the 1980s.
“The initial attraction was to seek a short term return however, over the years, I came to view investing as a longer term way of building capital as well as providing enjoyment from investing in different vehicles. I would add that my risk appetite and the amount I have been able to invest have changed over the years.”
Today David’s main investment is housed in a wrap account managed by Standard Life, with a mix of funds, equities and bonds. He also invests in an Isa, as does his wife, and the couple also have cash in a number of easy access accounts.
Funds and Shares
The bulk of his investments are in funds. This includes holdings in two Fidelity index funds, their Silver-rated Fidelity Index World, and Fidelity Index UK.
Morningstar analysts say that Fidelity Index World fund has a “strong portfolio management team and notable investment process”. It adds that it “maintains cost advantages over competitors” with some share classes being priced “within the least expensive fee quintile among peers”.
David’s other significant fund holdings include RBS Managed Defensive and RBS Managed Growth and Aberdeen Standard Investment Managed IV. This latter fund has delivered an annualised return of more than 6% over the past five years, according to Morningstar Direct data.
When picking funds David looks at the nature of the fund and its past performance, preferring diversified funds that are invested across global markets rather than focused on a specific sector. Alongside these funds he also has some relatively small direct shareholdings, many of which he has held for years.
“I have small historic holdings in Standard Life Aberdeen, BT, and RBS, now NatWest Group. Generally I have been relatively fortunate in avoiding any catastrophic investments, although being relatively heavily invested in RBS in 2007 was not a very profitable position to be in!
“From reading investment journals and being employed in the financial services industry I learned early on to avoid over investment in any one share or fund, however the RBS debacles served as a timely reminder to always consider cutting one’s losses if an investment starts heading the wrong way.”
Taking the Longer View
David says that in recent years, his investment strategy has remained fairly constant. “When I was younger, and less cash rich, I was more open to riskier investments with the opportunity of higher return. Over the years though, I have come to appreciate the benefit of taking a longer term view and have resisted the more pessimistic market watchers. The current pandemic has proved to be a case in point with global markets recovering from their seismic drops in March 2020 relatively quickly.
“I am an active reader of investment journals and the financial press and most views were consistent in the need to avoid panic selling. Undoubtedly, there have been winners and losers in the past year, some unexpected success stories and some sad failures. But I think it’s also fair to say that the pandemic has been cited, wrongly, in some cases as the cause of some of these failures, with several companies already in a difficult place prior to coronavirus.”
