SIPP Portfolio update 22nd January 2025

As advised with my last blog, having missed the latest target set for the blog (£500k by 8th Nov 2024) I've readjusted my goals, and would like to have a SIPP fund value of £325k in 1st May 2026. 

My intention then is to drawdown the SIPP in quarterly lump sums of £6,000 (£24,000pa) which represents approx 7.50%.  This was pointed out to me by a reader as being a tad on the high side, and I realise that; but then my long term intention is to leave nothing to my 3 sons. 

My eldest son works for an investment bank, and is in the process of buying a home for £1.30m - he's 34yo. By comparison, I grew up on a Liverpool council estate in the 1960's & 70's, and the home I live in is valued at £750k. I've worked damn hard for my money, and (in life's game of snakes & ladders) I've landed on a couple of snakes in my time, and very few ladders. Twice in the past 30 years I've gone back to the "start" (due to divorce and separation). Even with my choice of career (construction quantity surveyor), I'd be very comfortably off if I'd made a better choice of life's partner.

My middle son, after a stuttering start, is now on his way in his chosen career, and (fingers crossed) he'll be okay without any financial assistance from me.

My youngest son is about to graduate in Mathematics, and has a job offer from an international defence contractor that is over £100k pa (he's 22yo). 

So, overall, I don't think my boys will be in need of an inheritance from me - and I'm going to spend it.

I've been reading through a few old blogs, and that of 18th April 2017 is interesting. Theresa May had just announced a General Election for the 8th June, and I speculated that the decision was "brave or stupid - depending on the eventual result". I thought the voting may result in another coalition government, and there was in a way, as it was the Conservatives and the Democratic Unionists of Northern Ireland who formed it.  

The following week, on 22nd April 2017, I wrote a 5-year review of the SIPP and concluded that had I placed my entire SIPP into the 3i Group (Investment Trust) which was trading at 215p in August 2012, my SIPP would have had a value of £220,000 in April 2017 instead it was valued at £130,000.  With the shareprice of the 3i Group now at 3840 (and it was 775 on 22nd April 2017), had I continued pumping my SIPP funds into 3i and left them there, the SIPP would not have a value of £270,000 but would be well over £1 million, probably closer to £1.20m.

Sometimes, the most simple investment strategies are the ones that work the best.

I've been consolidating the SIPP recently. 

I've sold-off my losing speculative investment in Helix Exploration (HEX), to be honest I don't know what I was thinking when I did that and it's cost me about £4,000. 

My holding in Palantir (PLTR.US) has been halved to 100 shares, mainly as it's jumping up & down: it's been up nearly 20% and down 5% and it could be up 20% tomorrow or down 20% - it's like watching a roulette wheel.

I've also trimmed HG Capital IT (HGT) as the size of the holding was affecting the overall performance of the SIPP; it's SP is hitting a glass ceiling of 550p.

I've pumped the resulting funds into Allianz Technology Trust (ATT) as it holds 40% of it's value in the top-6 US tech companies (Nvidia, Apple, Microsoft, Meta, Alphabet, Amazon) and is currently trading on a 10.50% discount. That has to be a bargain. 

 

Portfolio Update: Strategy and future

2025: it's a big year for me, as I'm 66yo (or hope to be) on 8th November 2025 and will be able to draw on my Old Age Pension from the government.  My current plan is to commence drawing my pension from my 66th birthday - as there's no benefit in delaying payment - but, also, to carry on working at least until Easter 2026.  My current employment isn't too taxing on the brain-cells, and I enjoy the camaraderie of the office: I'm also paid a decent salary. 

The downside to staying in full-time employment is the lack of paid holidays, so I'm planting the idea in my manager's mind that I could be a useful "mentor and assessor" on a part-time basis. 

Will that work? Who knows?

What I'm not going to do is a paid hobby: nobody values skills anymore, and having visited a number of craft fairs on the run-up to Christmas, and watched skilled craft-makers struggling to sell their (sometimes) high quality goods for little more than cost-price, there's little point in doing that.

I've been writing my horseracing blog for 15 years (I've been following horseracing for nearly 60 years being introduced to the sport by my dad when I was a 7yo), and while I know I'm good at reading the form and spotting horses that are better than they have yet to show on the track (the only way to win at the sport is to spot potential earlier than anyone else), the number of hours that you have to put in versus the rewards do not merit the effort involved.  As such, this jumps season (which ends in April), will probably be my last one writing the horseracing blog. 

That's not to say I'm abandoning blog writing, I really enjoy it. The whole experience of writing gives me the chance to examine my thoughts, and set out my plans in a manner to accomplish them. The Pension Builder blog will continue unabated, in fact I can see it becoming more detailed.  The "upsides" of the Pension Builder blog are far greater than having £20 on a 6/1 chance at Haydock come in 1st. 

Having missed the initial target of the blog - £500,000 by my 65th birthday - I'm re-assigning my goals. I'd like to have a SIPP fund value of £325,000 on 1st May 2026.

From that, my intention is to drawdown approx 7.50% per annum (£24,000) which - after tax - will bolster my Old Age Pension by £20,400pa. I think that would provide a comfortable retirement.  My SIPP goal will be to grow the fund to meet that withdrawal, and some.  I expect we shall have inflation of an average of 5% for the foreseeable future, and endeavouring to grow the SIPP value to be able to cover that will be vitally important.

At the moment, I'm having an in-depth review of my SIPP holdings, and can't advise what changes I shall be making just yet. However, I am indebted to the recent post by Cassini, writer of the "Green All Over" blog - the link is on the right - as that resulted in a spike in readers of this blog. I hope some of those who visited, enjoyed what they found and will return again. What I found particularly interesting was the overlapping of our personal circumstances (we're both, reading between the lines, around the same age and soon to be reliant on our pension funds) and investment strategies. We are both on the lookout for multiple "baggers", we both use index-trackers as the bedrock of the SIPP, and we both have a element of "play" money for more speculative investments which may (or may not) come off. I always find synergies like this interesting: is it because we are "boomers", is it something to do with the way we were brought-up and the values we inherited, could it be just coincidence? 

That's it for now, lunchtime is over - back to the grindstone.