I think a simple portfolio is a good portfolio. Being able to understand what’s under the bonnet of each fund, or how each company’s business model really works, means that you’re able to stick with an investment through difficult periods, or make a decision to sell if its outlook sours.
With that in mind, it may be worth taking a second look at your Lloyds preference shares and your Invesco Preferred Shares ETF.
While holders of preference shares have stronger rights in the event of financial trouble at the company concerned, holders of ordinary shares should still be paid their dividends in normal times, especially at Lloyds.
So unless you’re worried about the company going bust, which I doubt you are, I’d suggest there’s not a huge benefit in holding the preference shares.
With simplification, security and diversification in mind, you could think about reducing these holdings to free up cash to invest instead in a global bond fund such as Jupiter Strategic Bond or M&G Global Macro Bond.
The bond market currently provides some attractive opportunities that match your income and growth goals.
In terms of your individual stocks, you are heavily invested in British financials via Phoenix and Lloyds.
While both offer attractive dividends, they have struggled this year. For a greater chance of capital appreciation, plus more diversification, you might look at Fidelity Special Values, a UK investment trust that takes a “value” investment approach and has nearly 30pc invested in the financials sector.
It yields about 3pc, so still helps to lock in those dividends.
With retirement coinciding with mortgage freedom, you’ll have extra money to play with for spending. But a useful eye-opener can be to look at how much you spend over a weekend, now that every day will be a weekend!
Wishing you all the best for this exciting new chapter.
Victoria is head of investment at Interactive Investor. Her columns should not be taken as advice or as a personal recommendation, but as a starting point for readers to undertake their own further research
