James Calder, research director at City Asset Management, said:
Given Mr Jenkins’s long investment period, a portfolio geared towards growth is appropriate. But he should be mindful that no portfolio should be left completely alone, and as it gets closer to being used, then it should become lower risk. This means everything invested in stocks is fine for now, but bonds should be added later.
Avoiding American companies would be a bold call, even though shares are very expensive. While valuations are higher, the chance of growth is also greater. One fund to buy is T Rowe Price Global Focused Growth, a global fund that has around 50pc invested in America. It owns technology firms, such as Microsoft and Google, as well as healthcare, industrial and financial stocks.
I agree the UK does look cheap, but Mr Jenkins should be mindful of the strong bias towards “old economy” stocks in the UK market when compared with the US. Our fund picks here would be Jupiter UK Dynamic Equity, which can make money when stocks go up and down, and Gresham House UK Microcap, which buys small companies with lots of potential. He should also add private equity to his holdings: the ICG Enterprise investment trust would increase diversification.
I have been in financial markets since the late 1990s and have seen three major crashes over that time. In each instance, markets have recovered, despite the pain of living through these periods. Mr Jenkins should stick with a plan and not try to time the market.
