2024 Review

  

2024 Review

December 31st, 2024


2024 

TLDR

What I got right

  • Beat #CGT benchmark again 
  • Ended up with another positive YTD
  • Reduced holdings count by 14

What I got wrong

  • I still average down too quickly
  • Still too many holdings
  • Still need to embrace technical analysis



Review


Given the effort to manage our assets, it's somewhat dispiriting to see I've barely beaten the money-market fund I roll our ISA monthly yield into. But I console myself with the thought that I don't expect much more bond-proxy wealth destruction, we are reasonably diversified and the pf has generated a yield excluding interest of a record £76k.
Unfortunately, the recent budget's IHT changes has meant a major upheaval for me as we are now accelerating the drawdown from our SIPPs over the next decade to gift it to our two children to avoid  a big IHT bill now that SIPPs are included in ones estate. It was always a ridiculous position created by the Tories by legislating such that they became an IHT-avoidance vehicle for the very wealthy rather than a means of funding retirement and removing the LTA gave Reeves an easy low-hanging fruit to pick without upsetting too many traditional labour voters. For me, the tax rebates had already done their job and allowed us to retire at 55 so now we hasten towards building ISAs for our kids so that they may hopefully take advantage of a tax-free income later in life. 


Asset allocation

I'm still basically underweight everything except Debt and Cash, both of which have benefitted from the increases in interest rates. I've been realising non-yielding equities first in our SIPPs and will be rebuying those in the kids' ISAs to begin with. As the disposals start eating into income plays, those will feature more in those ISAs but this is a slow, drawn-out process spanning a decade or so.  






Wealth Preservation

One pleasing aspect was my second year of outperformance against my benchmark Capital Gains Trust IT. 











Income

Portfolio income rose from 71->76k (and probably near the 78k forecast las year given HL don't include interest income in their numbers). This is really down to reallocation of capital towards debt as the interest rates appear to have peaked. 2025 income is forecast to be 86k due to the overweight amount of ex-equity cash.

























Cash

For the first time, cash is playing an important optionality part of especially our SIPPs where the interest forms 10% of what we're extracting monthly. For some reason it's much higher in an HL SIPP account vs ISA. We hold around 10% at the time of writing. The cash (and cashless) PF yields have risen in response to rising interest rates.






Holdings

Current holdings

















Summary

Still some work to do but chuffed that I've reduced holdings by another 14 to 50, through disposals of minor (forgive the pun) commodities holdings like #THS, #AAZ and #CAPD and write-downs like #DGI9. I've now got 5 holdings above 50k which was a big psychological step for me, especially after the scarring from #EBOX and #DGI9. I'm intending to allocate  more to public equities via core holdings in #GGRP and #JGGI in the kids' ISAs and aim to reduce the holdings, aiming for 40 over next two years.



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