‘I sold Fundsmith and lost £100k. What should I buy now?’

While some DIY investors may delight in building a portfolio from scratch, for others it is an intimidating prospect and a huge burden.

Sam Jenkins*, 68, from London, is in the second camp. Having liquidated his self-invested personal pension – which was all invested in star manager Terry Smith’s Fundsmith Equity – in May 2019, following a tip from a friend, he now has £ 241,000 in cash. But he is anxious about where to invest, having made poor decisions in the past.

“If I had stayed invested, my portfolio would have risen 39pc and be worth £335,000 today,” said Mr Jenkins, a retired university lecturer.

Mr Jenkins has a heart condition and estimates he has about five years to live. His Sipp will therefore pass to his wife, 57, who is healthy, and then possibly on to their children.

“The portfolio should be invested for growth over the next 10 to 15 years for my wife to inherit. She will be able to live off a property portfolio, so the Sipp is not needed to generate an income,” he said. “I am worried about how expensive American shares are and think the UK market looks good value. Should I ditch American stocks and buy British?”

James Calder Research director at City Asset Management

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.

Mike Deverell Investment manager at Equilibrium Financial Planning

While Mr Jenkins has reduced life expectancy, his wife is relatively young at 57. She could live another 27 years, according to Office for National Statistics data.

Given she will not need to access the capital as she can live off their property portfolio, it therefore seems likely the fund will end up being passed onto their children.

In terms of investment strategy, the money could be invested for more than 15 years, so they should aim for growth, as long as they can ignore short-term volatility. Having everything in the stock market would be sensible.

Most stock funds are weighted towards the US, with a typical global equity tracker being almost 70pc in American shares. We agree with Mr Jenkins that this is overly concentrated, but he should not avoid US stocks completely. It is impossible to time the market – as he found out the hard way in 2019.

We would suggest putting 70pc of the money in a global equity tracker, such as Vanguard LifeStrategy 100pc Equity. This is less US-biased, with just 35pc invested in America, and costs just 0.22pc a year.

To achieve more growth, we would suggest also owning some smaller stocks in the UK, as well as some in emerging markets, such as India and China.

The passive investment arm of BlackRock, iShares, has some good low- cost emerging market and FTSE 250 trackers that would do the job.