Tuesday, 11 April 2017

Financial Planning - 2017 Annual Review

I've now been following our Grand Plan for four years, and here's the annual progress update on the anniversary date of 31 March 2017.

Firstly, the usual pair of graphs of Actuals v Targets :-


As usual, click on the images for a larger version.

So still good progress, which is particularly apparent for the 'SIPP' pot - at this four-year stage, its valuation exceeds the target for the eighth year !    However, in terms of actual monetary value, the 'SIPP' pot is much smaller than the 'Savings' pot, and back in the dim and distant past of March 2013 I was making only very small regular contributions which at that time I had no plans to increase.

In addition to the two simple graphs above, I've also presented the progress in a slightly different way in the plot below, using the monthly data from my combined portfolio spreadsheet for which I usually post an update every three months.

Direct comparison with the plots above is complicated by the different baseline percentage values I've used for the Grand Plan and the combined portfolio.    In these annual planning reviews, I've historically referenced the pot values at 31-Mar-13 as 100%, but in the combined portfolio reviews the 31-Mar-13 baseline is referenced at 0% growth.

As an example of the differences, if the Grand Plan had started when the 'Savings' pot was worth say £1,000, with 100% representing its initial value, then a subsequent valuation of £2,000 would be 200% of the initial value and £3,000 would be 300% etc.    However, if the Combined Portfolio had also started off at £1,000, with 0% representing its growth / loss at that time, then a subsequent valuation of £2,000 would be a growth of 100%, £3,000 would be a growth of 200% etc.

Anyway, just take my word for it that the same total monetary target from the Grand Plan will be reached if and when the value of the combined portfolio increases by around 225% over the baseline valuation on 31-Mar-13.

So here's the graph of the combined portfolio progress towards the 225% target, recorded at the end of each month for the last four years.

I've used a linear trend line on the historical data points in an attempt to predict when the target valuation will be reached.  Current indications are around September 2020, i.e. two and a half years ahead of the 10-year anniversary date of 31-Mar-23.  

However, this forecast assumes that I'll still be able and willing to make further significant additions to the portfolio for the next three and a half years, and that past and future choices of investments will perform at least reasonably well.   

Onwards and upwards, hopefully ....

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