This is an audio transcript of the Money Clinic podcast episode: ‘Investment Clinic — Should I keep betting on Warren Buffett?’
Claer Barrett
My guest today has based her investment strategy on the wisdom of one man — Warren Buffett, the Sage of Omaha.
Margo
What I like about the investment philosophy is just the idea of looking for businesses that have inherent value. I think that Warren Buffett and his investment partners have done very well in finding those businesses.
Claer Barrett
Following the world’s most famous investor is a strategy that has rewarded 58-year-old Margo very well over the years. But as she approaches retirement, she wonders whether 94-year old Buffett’s strategy will still prove as effective.
Margo
I had been concerned for some time about having such a big exposure to Berkshire Hathaway. That investment model seems to have found its ceiling.
Claer Barrett
Buffett’s superfan Margo is one of many listeners who got in touch with a problem to discuss in our newly opened Investment Clinic with me, Claer Barrett, the FT’s consumer editor. In this special series of six episodes, I’ve been triaging plenty of different real-life investment dilemmas with the help of our financial experts. From 20-somethings figuring out their long-term strategy to older investors within touching distance of their retirement goals. We’ve been sharing real life stories about investing that we hope have educated and inspired you, no matter what stage of your investment journey you happen to be at. So what can we all learn from Margo’s investment story? Well, let’s open up the Investment Clinic and examine her portfolio.
Margo, welcome to Investment Clinic.
Margo
Lovely to be here.
Claer Barrett
Now, tell us a little bit about yourself, and what’s brought you to our clinic today.
Margo
Well, I suppose I’m nearing-ish, something that might start to look like retirement.
Claer Barrett
You don’t look it, I have to say (laughs). You’re 58 years young.
Margo
I’m 58 years young, yes. I don’t wanna really stop working, but I do want to have sort of broaden my choices around how I earn income and that kind of thing.
Claer Barrett
To make work optional.
Margo
Make work a little bit more optional, not be so reliant on corporate employment, that kind of thing. I think I’ve always been quite aware of personal finance, always been very aware of financial independence, even from when I joined the workforce, like, you know, 30 something years ago. So I think, I’ve been more sort of diligent, you know, going into pension schemes, being aware of tax effects, best way to work with tax impacts that kind of thing.
Claer Barrett
Well, your persistence has paid off. You’ve built up a seven-figure portfolio, mostly in equity funds, most of those with quite heavy weighting towards the US.
Margo
I have a retirement pot that I’ve been working on building up through my whole career, and I’m comfortable with it except that I’m aware it’s not particularly diversified.
Claer Barrett
But what you’ve managed to do is keep the vast bulk of your seven-figure portfolio within tax-efficient savings wrappers. So about 60 per cent roughly is held within pensions, self-invested personal pensions where you make the decisions about where that money is invested, and the remaining 40 per cent within your stocks-and-shares Isa. So you’re fantastically set up for retirement, but great flexibility there about when you take your money. So the big question for you, of course, is what’s in the portfolio? So one of your biggest holdings, around a quarter of your overall portfolio, is Berkshire Hathaway. Tell us why you picked that and a bit about what this stock is.
Margo
So it’s a firm that’s run by an investor called Warren Buffett.
Claer Barrett
Yep. I think we’ve heard of him.
Margo
I think of it as, what do they call it? Main Street US, so sort of, you know, big consumer brands, that kind of thing. And what I like about the investment philosophy is the value investing. Just the idea of looking for businesses that have inherent value, both on the balance sheet and in terms of the people running those firms and in competitive advantages that those businesses might have.
Also ideally looking at current prices that are below market or at least below that inherent value so that you’ve got that sort of value potential in the purchase. I think that Warren Buffett and his investment partners have done very well in finding those businesses and finding those stocks, right? And so I’m sort of benefiting from two things there. One is that value investing philosophy. The second is, there is actually a reasonable degree of diversification within that share, even though it is quite US-focused. So not regional, but at least in terms of the spread of the different kinds of industries and so on that are represented there.
Claer Barrett
I mean, the most famous investor in the world. He’s 94 now (laughs), of course, but he’s still like an absolute inspiration. But that does worry you a little bit. Now, it’s 25 per cent of your portfolio now, Berkshire Hathaway, but it was a lot more and you’ve kind of reduced that.
Margo
Yes, that’s right. It was higher. And I also learned about a stock, a Swedish stock called Investor AB.
Claer Barrett
Investor AB, sometimes called a Baby Berkshire, is a family-run Swedish investment company, but it’s hardly small fry. Founded in 1916, it’s worth tens of billions of pounds and holds stakes in companies like AstraZeneca, Saab and Ericsson. Margo’s holding in it makes up around 23 per cent of her portfolio, but why did she invest in it?
Margo
I had been concerned for some time about having such a big exposure to the Berkshire Hathaway position. And so this gave me a way of buying something quite similar in terms of structure and philosophy and in a single share, I’m buying into something that’s quite diversified. But with Investor AB, I get the European exposure, so there now I’ve got a balance between US exposure and European exposure.
Claer Barrett
And those two investments over time, have you been happy with how well they’ve performed?
Margo
Yeah, Berkshire most definitely. Investor AB, I only made that switch maybe two, three years ago, something like that, but it’s done pretty well so far.
Claer Barrett
OK. Then the other kind of quarter of your portfolio comes from three global tracker funds. Now you’ve got an Aviva Investors multi-asset fund and you’ve got two HSBC global strategy funds. Now, all of these have got around a 65 per cent weighting to US equities, and then various divergences within that, whether it’s equities around the world in case of the HSBC funds or bonds in case of the multi-asset fund, tell me a little bit about why you picked those tracker funds, what attracted you to those?
Margo
I didn’t pick those tracker funds. That’s a portion of my portfolio that I’ve given into an adviser.
Claer Barrett
OK.
Margo
To whom I pay a fee, but I wasn’t willing to hand over my Berkshire Hathaway investment because it had done so well. But I had some other stocks and shares that weren’t doing particularly well in my Sipps and Isas. So I handed that portion to him and he selects those funds. I think, you know, he recommends those funds to me, but really he has selected them.
Claer Barrett
And these are all funds that are broadly built out of ETFs, exchange traded funds, so it’s pretty cheap to put together and the fees on those are fairly cheap too. Although obviously you’re paying an advice fee.
Margo
I am. Yeah. It’s not huge, the advice fee. And that’s the other thing I would say, in the same way you can lose a lot of your investment to tax, you can use a lot of your investments to fees, management fees.
Claer Barrett
Absolutely.
Margo
And I’ve never been convinced that’s really necessary.
Claer Barrett
OK, I suppose what concerns you now is that, although the tracker funds might be fairly diversified around the world, you’ve got these two big holdings, one of which is very exposed to the US. Your tracker funds are also very exposed to the US. And then the final kind of piece in the equation is that the rest of your portfolio is made up of your current occupational pension. You’re paying into in your workplace, which happens to be a big US firm (laughs).
Margo
Exactly.
Claer Barrett
So tell me about your sort of thoughts on the US at the moment at this crucial pivotal time in history.
Margo
It’s tricky, right? But . . . So from a personal point of view, I’m very uncomfortable having that level of exposure to the US. It’s a very concentrated exposure that I have, right. And if we’re seeing the world through whatever sort of painful messy sort of mechanisms peel away from the US, I don’t know that any of us can predict how that will all fall out.
Claer Barrett
Absolutely not.
Margo
Right? But to have that level of dependence on one country, and particularly one country that’s now behaving in a very erratic fashion, it does concern me. Even with the Buffett investments, the impact on even American high street could be quite significant.
Claer Barrett
Well, yeah, there are real worries for the health of the US economy going forward.
Margo
Yes.
Claer Barrett
So before I bring our two experts into the studio, what are the kind of things that you would like to ask them?
Margo
I guess one is, do I have a lack of diversification from their point of view? And if so, what kinds of things could I do about that? Second thing is my question around equities versus something so-called safer in air quotes, right?
Claer Barrett
Some bonds with fixed income.
Margo
Yeah. Should I be thinking about balancing in that direction, given my age? I’ve got seven more years of major accumulation. At what point should I make those kinds of decisions? I think those are my two big kind of questions, really.
Claer Barrett
Big questions indeed, especially when we’re talking about such a sizeable portfolio. I’m about to invite the experts into the studio, but before we hear more from them, an important disclaimer from me. The Money Clinic podcast is intended as a general discussion about investing, and is not intended as financial advice or any kind of investment recommendation to Margo or indeed any of you. Everybody’s financial situation is different, and you should always do your own research before you make any investment decisions. Now, without any further ado, let’s bring in our experts. Very fine fellows, FT columnists, the pair of them, starting off with Stuart Kirk, our skin-in-the-game columnist, and, like Margo, a fellow Australian. Good morning, Stuart.
Stuart Kirk
Good morning Claer, pleasure to be here.
Claer Barrett
And we have Simon Edelsten, who you may also read in the FT Money section at the weekend. Simon is a great columnist, but he’s also a fun manager and works for a firm called Goshawk Asset Management. Welcome, Simon.
Simon Edelsten
Morning, Claer.
Claer Barrett
Guys, you’ve been sitting outside the studio listening to me chat to Margo. What are your first impressions of how she’s been doing as an investor?
Stuart Kirk
I’ll kick off. I think the first thing to say is congratulations. You’ve clearly played a blinder and perhaps we should be swapping chairs and you should be telling me how I should invest my money. But clearly, it’s a spectacular result, either through sheer skill or luck. It’s been an incredible time to own equities, obviously, and it’s been an incredible 20 years to own US stocks. Both of those things put together means that you’re in good shape, and I think at this point we’ll be dealing with a good problem rather than a bad problem, and I look forward to getting into that in a moment.
Claer Barrett
Absolutely. Simon, what would you say is your first opening thoughts to Margo?
Simon Edelsten
Well, I’d rather echo what Stuart said. Owning equities has been fantastic. Owning American equities has been better than owning most equities. We’re certainly at one of those points in history and valuations as well. So both the political situation in Europe, as well as America, and also the valuation of markets makes this very good moment to reassess and check that the shape of the underlying investments that you’ve got through all these different holdings make sense to you in terms of what might be to come over the next 10 or 15 years.
Claer Barrett
In the weeks that have elapsed since we recorded this episode with Margo, US stock markets have indeed had a tumultuous period as fears grow over President Trump’s trade tariffs could trigger a recession. That’s something that would obviously stretch far beyond America. This is especially unnerving for investors getting closer to retirement. How does Simon think older investors like Margo could assess the equity-bond mix of their portfolio?
Simon Edelsten
I think it’s enormously difficult compared with fund management, planning for retirement is a horror show. The number of variables you’ve got in planning for retirement is huge. And your biggest risk is trying to work out how much inflation there might be at some point in future. So it’s like we’re being asked at some point or we put ourselves under pressure perhaps at some points. Say, right, today is the day I’m going to sell my equities and I’m gonna buy some bonds or an annuity, which is effectively the same thing. But as soon as you buy that, you’re having to make a judgment about whether the yield that you get from that bond, the yield you get in your annuity, is going to be enough to keep your standard of living going, even if some unexpected inflation turns up in perhaps five or 10 or 15 years’ time. As we’ve seen recently, it only takes a little bit of inflation for a few years, like around the Ukraine War, for your cost of living suddenly to shoot up. So it’s terribly difficult to plan. And it is putting people off buying bonds, I suspect, because they think at least equities sort of keep up and cope with inflation as long as you can hold them for a long period of time.
Claer Barrett
Now Stuart, every week in FT Money in your skin-in-the-game portfolio, you’re writing about how you manage your own retirement pot in your Sipp. As you said at the outset, it’s not done quite so well, it is not quite so large as Margo’s, but what’s your attitude as somebody who is a similar age towards getting that balance right between equities and bonds?
Stuart Kirk
Yeah, Simon’s right. This is the fundamental question, and I think the informed expert view on this has changed in my time in finance. A while ago, when we all worked down a mine and smoked 20 packs of fags a day, we would retire and then promptly die, you know, five, 10 years later, and that shift from equities to low-risk income-producing bonds was an obvious thing to do. Now, many of us retire and have 30, 40 years ahead of us. So the new thinking is you now want to have a higher proportion of your portfolio in equities for longer because you can handle the volatility over a longer period of time. And so an old 60-40 portfolio at retirement, that ratio is generally moving up, particularly if you’re feeling good about yourself and perky and you look quite healthy and you think you’re gonna make a good longer retirement. Now people are talking 70-30, 80-20, you even hear people sort of advising, hell, if you’ve got enough money and you’re producing enough income, stay at 100 per cent if you’re going to be around for another 30 years. That’s a reasonable equity timeframe. So I think the issue with your portfolio, yes, the equity bond call is a big thing that we can discuss in a moment. But the concentration in US equities in particular, I would say just at the margin is the more important call to make here, and I think Buffett, which we’ll also get to, is a distant third for reasons I’ll give later.
Claer Barrett
OK, so as we’ve said, lots of US exposure across Margo’s portfolio between Berkshire Hathaway and her tracker funds, but Buffett fans will know that nearly a quarter of Berkshire Hathway’s portfolio is in cash or bonds. A record $334bn at the end of 2024 as he continues to sell down stakes in Apple, Citigroup and Bank of America. In fact, Berkshire is now making more from the income generated by US Treasuries than from its dividends on equity holdings. Many investment commentators believe that the sage made these moves in anticipation of a market correction. But my next question for Simon is how investors should frame this.
Simon Edelsten
Yeah, so there seems to be currently a mismatch between the amount of the equity world, which is represented by American stocks, which is up towards 70 per cent and the amount of the real world, which is represented by America. So if you look at GDP share, so it would be a lot lower than that. And it hasn’t always been this way. So 12 years ago, I remember the share of American equities and global equities was about 45 per cent. A lot of the reason for that is because the technology companies which dominate the US west coast have done particularly well over the last 10 years.
Claer Barrett
The so-called Magnificent Seven.
Simon Edelsten
The Magnificent Seven have done particularly well, the rest of the world doesn’t have so many of those sorts of stocks. But all the same, there is that implicit imbalance between what goes on in the city and the valuations here, and what is going on in people’s savings, often without them being aware of what’s going on. Because if you buy a tracker fund 15 years ago, 12 years ago, it’s changed its shape, it’s changed its risk profile, but it doesn’t change its name on your statement. There is certainly an overlap between global tracker funds and the Buffett portfolio inside Berkshire Hathaway, because not only are his large equity investments American, the wholly owned businesses that he owns are very American indeed, things like Burlington Railroad, Midwest Energy.
He’s a very domestic investor. And interestingly, if you look at what he’s been doing recently, apart from selling American equities, he’s also been switching a little bit into Japanese equities. Yeah, he has. So he doesn’t show the most enormous sense of conviction about what’s going on in America. And also he hasn’t bought anything for years. I mean, this cash pile has built up because he hasn’ made any big acquisitions, which would typically be domestic. So yes, trying to find ways to diversify and spread the money around would seem like a sensible thing.
Claer Barrett
Clearly a conversation to have with your adviser after the podcast, but tell me a little bit about your feelings on Buffett. Simon mentioned there the huge cash pile that he’s sitting on record levels around $334bn at the end of this year. And as we said, he hasn’t made any big acquisitions, he’s been trimming his equity holdings. And he’s 94.
Margo
Yes, yes.
Claer Barrett
I mean, how does that make you feel as an investor who’s held Berkshire Hathaway for many, many years?
Margo
Yeah. I mean, breaking those two questions down separately. I think maybe the first one’s possibly the more important one, ie the fact that there’s a huge cash pile. That’s because he’s . . . My impression is he and the people he’s trained around him are very disciplined in their investment decisions, and they’re not going to invest just because they’ve got a huge cash pile, they’re going to investment if they find the right opportunities, right? And so maybe this tells us it’s another information point that says, you know, we’ve gone as far as we . . . that tells us something about America.
Claer Barrett
US stocks are overvalued (laughs).
Margo
For example, and the fact that he can’t find solid domestic businesses to invest in and so on. So it’s another, for me, that’s a bigger information point about heeding the sort of suggestions that Simon was just making around looking at how things fit into the overall framework. The age doesn’t, I mean, we all get older, we’ll all die, like there’s nothing…
Claer Barrett
We do, and there is a succession plan.
Margo
There’s a very solid succession plan and so maybe the markets will wobble around that, and that might impact the valuation. But I don’t know that necessarily impacts the inherent value in that stock over time, as much as the fact that that investment model seems to have found its ceiling, at least in the current time in the US.
Claer Barrett
Stuart, turning to you now, famously, your own portfolio that you write about in Money doesn’t have any exposure to the US. Do you want to briefly talk us through why that is? And then we’ll get on to the issue of Margo’s portfolio.
Stuart Kirk
Yeah, so I’m a value guy. I’m more so than Warren Buffett indeed. He would argue he probably isn’t even a value guy, he’s happy to pay up for quality. But I’m, I’m a big stickler on value, and I believe that valuations mean revert over time. And the valuation measures that I think are useful and have predictive power are all flashing more than bright red for the US. And indeed you could have said that five, 10 years ago, but even more so today. I think there are just more attractive markets around. And so I’m heavily invested like Warren in Japan, in the UK, in Asia, brackets, China. If the US keeps going up, they’ll go up. If the US rolls over, they’ll roll over less. So I think you get some of the upside anyway, not so much of the downside. And I think there’s a reasonable chance at this point, given history, that the US over the next five, 10, 20 years won’t perform like it has brilliantly for your portfolio in future. So that’s my logic at least.
Claer Barrett
So how can people think about using low-cost tracker funds to broaden their geographical exposure?
Stuart Kirk
Yes, Margo, I’m very surprised when you sat down with your adviser for the first time when they saw your investor and Warren Buffett holdings, you must have turned up in a Ferrari looking very risk loving for them to then put you in three funds which were basically, you know, so equity heavy. You must have really said you love equities and you love risk. Because I would have thought that the adviser having seen your other holdings which were a 100 per cent equities would have used those to give you a much more of a balanced exposure. We’ll leave the bond question for a minute, but I would have thought they might have chosen funds with much more sort of diverse range of overseas assets.
So to answer your question, Claer, there are a whole range of index trackers out there for Japan and Asia, depending on which bits of Asia you like, I would just choose a sort of generalist one which ends up giving you exposure to China and often they put India in there as well, whether you wanna call that Asia or not, there are plenty Japanese ones to choose from. I think it matters less which bits of those markets really, most of them are almost all of them are cheap relative to the US. Personally, I think it matters less whether you own Berkshire Hathaway or the market. Over the last 10 years, his returns have basically come in line with the market. I can’t see him underperforming. My own view is that whether you own a US tracker or Warren doesn’t really matter, but I really would move that US exposure down by owning ETFs or tracker funds in some other regions.
Claer Barrett
OK, before I come on to ask your thoughts on that Margo, Simon, you’re a fund manager, you’re looking after money for other people, you have done for all of your career. This question of broadening exposure, of course you don’t have to just use passive funds to do that, you could use active funds too. What are the markets other than the US that interest you?
Simon Edelsten
If you want a lot of company for your money as it were. So companies which trade very, very close to their asset value, companies which have very big market shares globally but don’t make huge amounts of profits, Japan completely dominates that list. Huge number of world-class businesses which run a fraction of the valuation of equivalent American businesses and in some cases cheaper than equivalent European businesses. A lot of Japanese businesses have prioritised market share over profitability. There’s been a big change in that. Most of them are making themselves much more profitable. And the underlying market has performed very well. The reason that people don’t talk about Japanese investment very much is because the yen’s gone down a lot. British savers don’t tend to go around saying, oh, I’ve got this fantastic Japanese investment that’s made me a lot of money, unless they were in what’s called a hedged share class. So the fund manager makes sure that the fall in the yen didn’t matter if you are a sterling investor. So that’s left that market improving totally different from a valuation point of view from America and a good diversifier. And the second thing is China. The Chinese market has been appalling before the last five years.
Claer Barrett
Yeah, tell me about it (laughs).
Simon Edelsten
And they’ve had a fairly classic property crash over building of properties, prices fell, developers started going bust, but more particularly the public lost confidence in savings. And so the People’s Bank of China earlier this year has stepped in and has started doing exactly what needed to be done in Europe after the property crash after the financial crisis. So they step in. They buy out property developers and bankrupt them, they take over the bad loans, they make sure the flats are finished and then sold. It went sorted out overnight, but the change in policy is quite dramatic, and the equity market is starting to recover a little bit off the back of that and certainly is much lower valuation.
Claer Barrett
Also, we’ve got tech to think about. So the big Magnificent Seven tech stocks in the US. But one of the biggest news stories of the year so far has been DeepSeek, this Chinese AI, generative AI firm, kind of almost came out of nowhere to challenge the dominance of some of the big US chipmakers and tech companies. And that’s really changed a lot of investors’ views about how China might perform in their portfolios over the next 10 years.
Stuart Kirk
And I think that’s the most fascinating thing about technology and innovation is that, you know, half the biggest company, top 10 biggest companies in the world didn’t exist when I first started running money. And so what will be the companies that are the biggest in the world in 10 years’ time? We simply don’t know. It moves that quickly. So you really can’t, in advance, know where they’re gonna come from, and which one of these blocs they may emerge. It may even happen out of Europe. But Simon’s point about hedging is another interesting one, which I think we need to touch on in terms of where you’re gonna be living and in what currency you’re going to be spending your retirement money in.
Claer Barrett
Good point.
Stuart Kirk
Are you gonna be in the UK or in Australia? Because not only do you have whopping US equity exposure, you’ve got massive dollar exposure. And we know Trump is hell-bent on reducing the value of the dollar versus all its trading currencies. So, you need to think about currencies as well. And you are very, very heavily exposed to the dollar with the incumbent president who wants it lower.
Margo
Yeah, yeah, that’s a very good point, actually. I think the exposure to Asia is a really interesting question, right? Because it has kind of underperformed. So while the rebalancing is necessary and one can look at these big regional blocs, ‘coz there’s also the Middle East, there’s Africa, you know, there’s Australia, which is really an interesting play. Actually choosing which of those to expose yourself to is at the end of the day, I’ll just have to make a choice and make a punt on that stuff, I guess, to some degree.
Stuart Kirk
Yeah, I think neither Simon or I are saying you should abandon the US and you should keep a huge wallop of an exposure to the US. It’s served you well, and it will serve you well in the future. And it’s the second best performing equity market on earth after Australia, and I think the bigger question for you is having reached this seven figure sum and done so well, how would you feel if equity markets halve tomorrow? How painful would that be to you? And should you pre-empt that with a much bigger waiting to bonds or something much lower risk?
Margo
It’d be absolutely devastating, yeah. Well, this is it. This is my, you know, this and the family home.
Stuart Kirk
So if you answered that question by saying it would be devastating, then you have way too much money in equities.
Margo
Right, OK.
Claer Barrett
Simon, what are your thoughts on all of this?
Simon Edelsten
Two things. Equity markets have halved twice quite recently in the global financial crisis. And also, well, I call it quite recently shows my age in 2000 to 2003, both times they halved. And if you get out the chart of global equities, and you run them over the whole of my career, which is quite a long one, and you back out, you put the chart on a mirror, walked to the other side of the room and have a look at it, you can’t even see these bear markets.
Margo
Yes, yeah.
Simon Edelsten
Because the relentless march of equity has been up, and the main thing has been to completely ignore the bear market and hold on because it does work itself out. That said, it is psychologically almost impossible to do that.
Claer Barrett
Holding your portfolio entirely in equities is pretty risky, especially as you approach retirement, but de-risking a portfolio is easier said than done. As Simon said earlier, inflation can eat away at the value of the income investors would receive from bonds or annuities, and Margo has a question about that.
Margo
Isn’t the way to deal with that buying inflation linked bonds?
Simon Edelsten
Unfortunately, the word inflation linked is not as powerful as the word bond. So if you look at the performance of inflation linked bonds over the last five years with the inflation in Ukraine, unfortunately, a lot of people owned them believing that they were gonna be protected from inflation. Well, the trouble is that at any point in time, the bond price will discount what the market expects the inflation to be, whether it’s an index-linked bond or a traditional bond. And so these index-linked bonds before the inflation all thought, oh, there’s not going to be any inflation. So they’re all terribly expensive. And then there was some inflation and they went down. So you got your inflation linking, but it was the small part of the money that you put in, and the large part of money you put it in, which is the premium you paid. They lost all that premium. So people lost an awful lot of their real spending power. And Yes, I fear that a lot of people didn’t understand quite what they were getting into.
Margo
Yeah, so you’re saying really only equities is a much stronger way to manage versus inflation over time than owning an inflation-linked bond.
Simon Edelsten
As long as you can take that medium to long-term view. But there’s no need to be too brave. I mean, you’ve made so much money that you just, you know . . . You can afford to have a bit of money in the bank for a rainy day just because it makes you sleep better at night. There’s nothing wrong with that. And if it’s worth a little bit less because there’s a bit of unexpected inflation in 10 years’ time, it’s not the end of the world. It’s much more the end of the word if you find it very stressful and very difficult. And the scale of the next bear market, given what’s going on in the world, the next correction could be quite something, ‘coz this is one of those periods of very unpredictable change.
Claer Barrett
OK, well Margo, to sum up, you’ve done fantastically well. The nice problem that you have is how to de-risk and, as the experts have said, preserve some of that value. Think about your asset allocation, everything we’ve said about bonds, about broadening your equity exposure, and also thinking about cash levels, just as Buffett is doing with his own portfolio. What do you think, following the podcast experience, you will now go on and do?
Margo
Well, I think I’ll make sure I’m really clear on the exposure that I have inside each of those holdings, and make decisions around the rebalancing that I want to do. Some of that will be around changing the regional exposure of the equity investments. There’s this big decision around bond versus equities as well. I’m not entirely sure how to make that decision, but it’s something I need to start thinking about in this kind of seven-year window that I’m talking about.
Claer Barrett
And that’s absolutely something that you could and should be talking about with the person who you’re paying for advice.
Margo
Yes, yes. That’s true, that’s true. So that’s kind of one thing. I think the other is deciding what I do to draw an income from that. I don’t intend to kind of stop working, but I’d like to have less dependency on a big, safe corporate salary and be able to make decisions around work that maybe are not quite so financially driven. What I would probably do is spend more time managing how I take money out of the retirement pot and that’s things around drawing down on Isas and how I draw down on the pension and that kind of thing.
Claer Barrett
The sequencing.
Margo
Yeah, yes. And that side of thing, I’m sort of aware of some of the big pieces there, but I haven’t started looking at that in earnest.
Claer Barrett
But you know what I think is really great? That you’re 58, and you’re thinking about this. You’re not waiting until you’re 68.
Margo
Yes, yeah.
Claer Barrett
A huge thank you to you Margo today for sharing your portfolio details with us. Do stay in touch with us and let us know how you get on in the future.
Margo
I certainly will do. Thanks very much for having me.
Claer Barrett
And thank you as always to our expert Stuart Kirk.
Stuart Kirk
Thank you very much.
Claer Barrett
And Simon Edelsten.
Stuart Kirk
Thank you very much Claer.
Claer Barrett
So Margo leaves the Investment Clinic with some ideas on diversifying her portfolio and enjoying her hard-won investment gains for her eventual retirement. And with that, the final episode of this series of Investment Clinic draws to a close. We’ve spoken to people at all stages of their investment journey. 20-something investors Faye and Matt, Stephan and Jane, who were both in their 40s but had wildly different levels of investing experience, and Paul and Margo who are tweaking their portfolios with retirement in mind.
I hope you found the series educational and that it’s inspired you to educate yourself about investing. Want to learn more from me? Check out my Sort Your Financial Life Out course for the Financial Times. It’s six weekly lessons delivered to your email inbox with practical exercises and homework that build week by week into a long-term financial plan. This costs £19 for nonsubscribers, but it does include free access to ft.com for that period. There’s a link in the show notes if you want to sign up.
If you would like to appear on the next series of my Investment Clinic and have the chance to chew the investment fat with a panel of experts, then get in touch. Our email address is money@ft.com or follow me on TikTok or Instagram. I’m @ClaerB.
Finally, This podcast is intended as a general discussion about investing. It’s not intended as financial advice or any kind of investment recommendation. Everybody’s financial situation is different, and you should always do your own research before you make any investment decisions.
Investment Clinic is produced by Mischa Frankl-Duval with sound design and mixing by Breen Turner, Sam Giovinco and Joe Salcedo. Manuela Saragosa is the show’s executive producer and Cheryl Brumley is the FT’s global head of audience.
