The existing US equity weighting (£99,000) is already suitable for a growth strategy, as the US rally has potential to widen from its core AI-base and the market is a good source for potential capital growth within portfolios.
Across Mr Hudson’s equity holdings, I would recommend utilising a range of fund styles, such as “growth” (fast-growing companies), “value” (undervalued gems) and passive (tracker funds).
A range of investment strategies within the equity holdings will help to create diversification within this asset class – an important quality given a continued outlook of economic uncertainty.
Opting to use funds over individual shares will also help with the goal of diversification within the portfolio.
The total level of fixed-income assets within the portfolio is suitable for a growth strategy (around 10pc). But I would make sure there is significant exposure to government bonds, which are now largely yielding above expected inflation rates.
And given the current vulnerability of corporate bonds to economic slowdown, I would recommend using short duration bond-exposure where possible (a lower risk choice).
Finally, given the economic uncertainty among markets, I would advise some gold exposure within the portfolio. Whilst it is a non-yielding asset, gold works as a good defensive counterweight to equities as its value does not correlate with the stock market.
Daniel Wood, financial planning director at 7IM, says:
Mr Hudson and his wife are in a position many people find themselves in – wanting to maximise the growth on their investments. The difference within this scenario is the investment time horizon.
Despite Mr Hudson stating he and his wife are too old to invest for another 10 years, and that they are only looking to invest for the next five max, the Office of National Statistics calculates Rory has a life expectancy of 87 and his wife aged 89. Subject to any health-related concerns, both could have a 13-year investment time horizon.
Understanding the investment time horizon, the need for income and the need for capital is very important. This will establish Mr Hudson and his wife’s need to take investment risk, ability to take risk and capacity for loss.
Subsequently, the correct investment strategy and capital growth prospects can be determined.
