Long Term Investor Checklist – Banker on Wheels


investingAs a Do-It-Yourself Investor you know you can get great value from doing your own homework and investing without incurring additional costs (costs add up significantly)

  You control the re-balancing process and observe how markets evolve – a humbling exercise that shows that even most professional investors can’t add much value over the long term. You may have a plan but would like to get a second opinion – did I miss something? Investment advice is always personal ( gives broad guidance not tailored advice); here are some common questions investors seek to answer before starting out investing:  

Did I consider my objective and time horizon?


  • Different objectives drive different asset allocations in your portfolio
  • Be prudent if investing for the short or medium term and protect your capital against market volatility
  • For those with a long term vision seeking to be Financially Independent, Retired Early (FIRE) market volatility may help you achieve great returns over time; a typical model portfolio will be more aggressive towards long term returns
  • When approaching retirement or focused on regular income you may look at corporate bonds to reduce equity risk.


Do I have a plan when market crashes


  • Crashes are part of the game; plan on how you will behave when the next one comes along; how much can I lose? How long will a downturn last? How quickly can I recover my savings?
  • Here is a comprehensive answer on how to protect your portfolio


Did I choose the right Equity ETF?


  • The easiest way to combine equities and bonds is a one-stop ETF like Vanguard LifeStrategy or BlackRock’s ESG ETFs
  • A great way to control equity allocation is to buy a World ETF – I have reviewed the main ones so you only have to pick the best given your requirements
  • Alternatively, you could split your portfolio as introduced here through a Banker or Cyclist portfolio, and choose a combination of International ETFs


Do I have the right proportion of Bonds?


  • Bonds reduce the volatility in your portfolio and protect capital during sell-offs; unless you are very long term with high risk tolerance you need bonds – understand why
  • Understanding risk tolerance and time horizon is key to your financial success; take a questionnaire  to understand what stocks/bond allocation is suitable for you
  • Once you decide on an allocation, use this guide to select an appropriate bond ETF
  • Cash or bond ETFs? A mix of the two could be the answer – here is a calculator to compare cash and bonds


Did I hedge currencies where needed?


  • Currencies can be confusing here is what you need to know
  • You may consider a hedged international bond fund to reduce portfolio volatility as two thirds of risk in international bonds comes from currencies; you should keep international equity funds unhedged
  • Here is a guide regarding currency hedging


Did I consider all important criteria when choosing an ETF?



Did I decide if Gold is appropriate for me?


  • If you already have inflation protection with assets like real estate it may not be as necessary
  • Within your bond allocation you may also consider a small part of Gold


Did I clean up my portfolio from unnecessary ETFs?


  • Is your portfolio needlessly complicated with asset classes you don’t need making portfolio re-balancing complicated?  Understand how to clean up your portfolio
  • Financial theory is clear on  your chances of beating the market with stock selection, but if you really want to invest in single name stocks keep to a maximum of 5 to 10% of your portfolio (aka play money)


Lump sum or drip feed?


  • Research says initial lump sum investment outperforms 2 out of 3 times when compared with drip fed investment – ‘pound cost averaging’ – with 2% incremental returns over a 12-month period
  • However, when deploying savings in a volatile market it may be more comfortable to invest at regular intervals; the same research says if you decide to deploy cash over time be disciplined and invest on a monthly basis over 12 months (you can’t beat the lump sum investment over a longer time period)


Did I verify there is no overlap in my ETFs?


  • Do you have multiple ETFs covering the same markets and/or countries? Look at indices you want to track
  • Overlaps may make sense if you are investing in the UK and want world exposure (e.g. through MSCI ACWI) but also overweight your local country (e.g. add some FTSE exposure); be aware of home bias, though


Have I placed the ETFs into investment accounts based on tax efficiency?


  • It is important to track your overall portfolio; separate and place your ETFs into different accounts based on tax advantages – e.g. place bond ETFs that pay dividends into a non-taxable account such as an ISA and accumulating equity ETFs into taxable accounts.
  • The domiciliation of an ETF is important because of tax impact


Am I comfortable with my Broker’s safety?

    Make sure you understand how likely a Broker is to fail and what are the available compensation schemes.  

Did I decide how frequently should I re-balance my portfolio?


  • The general guidance is that re-balancing frequency has low impact on overall portfolio returns as long as you do it
  • Choose a rule – whether it’s deviation for your long term asset allocation or based on time period (e.g. annually) and stick to it
  • Here is a detailed guide on how to rebalance


Stay tuned

    This investment checklist is work-in-progress and will be expanded as resources are added to guide you through the investment process; exciting things are in the pipeline – if you want to know more visit the site and subscribe to our newsletter   Good luck with your Investments!   investing    

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