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Originally Posted by nlwolf
Country: UK
Income: >$100k (from poker)
Risk Tolerance: medium-high (4 on a 1-5 scale, where 3 is medium, 5 is high)
Timeframe for investment: not sure - 5-15 years
I want to invest £100k-£200k probably into an index fund like Vanguard.
Would blend of 80% stocks / 20% of bonds fit in the "mid-high" risk level category (if not - what ratio would?).
yes, that is an aggressive asset allocation. you don't give your age but if your investment timeline could be as short as 5 years, this is probably too aggressive. (i.e. how would you feel if this investment lost 50% of its value when you went to spend it in 5 years?)
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Would diversifying be a good idea - say split evenly into US, EU (or UK) and emerging markets, with 80/20 stock/bonds blend for each?
yes, diversification is a key element of investing. there's more to it than just geography, but most advice is to split approximately 50/50 between US and international. my reading suggests that international bonds don't really add much to a portfolio which already contains US bonds and treasury vehicles, but i'm an american and ymmv.
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I'm a complete investing fish, so I would appreciate some basic advice.
read a lot!
i like the motley fool for getting started and then the bogleheads wiki once you're familiar with a few terms.
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Also - is getting 4% returns (above inflation) reasonable expectation for the mentioned strategy? 3%?
no one can predict the future and it depends a lot on your time frame. long term, those expectations seem reasonable, even a little modest, for a diversified portfolio.