Simplifying My Portfolio 15 Months Before Retirement
After careful consideration, I’ve made a significant shift in my investment strategy. I’ve exited all my individual tech share positions and moved to a simpler allocation: 70% in World Index Funds and 30% in S&P 500.
Tech Shares, why the Change Now?
In April 2027 just 15 months away, I’m planning to retire and leave work behind. I say “planning” because while that’s my target date, it could potentially move forward to September 2026 if circumstances align. Either way, I’m entering the home stretch of my working life, and that changes everything about how I should be investing.
With retirement on the horizon, I no longer want the volatility and concentration risk that comes with holding individual tech stocks. A broader, more diversified approach feels right for this stage.
What Retirement Looks Like
I’m genuinely excited about what comes next. My retirement plans aren’t about endless exotic holidays I’m actually not a big traveller. Instead, I’m looking forward to:
- Some travel, but thoughtfully chosen trips rather than constant globe-trotting
- Visiting art museums outside the UK, exploring collections I’ve always wanted to see
- More painting and joining an art club, finally giving my creative pursuits the time they deserve
- Gym and swimming, I use a local council gym and its great.
These plans don’t require massive wealth, but they do require financial stability and peace of mind.
Tech Shares and the Magnificent 7: A £100K Investment Strategy for 2025
Introduction: Beyond the AI Bubble Narrative
There’s a compelling case to be made that tech shares, particularly the Magnificent 7 companies, will continue their upward trajectory regardless of concerns about an AI bubble. Unlike speculative AI startups, these established giants have proven business models, diversified revenue streams, and the kind of market dominance that doesn’t simply evaporate overnight.
I’m planning to invest £100,000 of pension cash into tech shares, specifically the QQQ ETF, using a dollar cost averaging strategy over six months starting in February. Here’s why this approach makes sense in the current market environment.
The Current State of Tech: What the Numbers Tell Us
The Magnificent 7’s Recent Reality Check
The Magnificent 7 haven’t had the smoothest start to 2025. These tech titans experienced declines exceeding 15% in early 2025, with only Meta showing positive momentum during that turbulent period. Morgan Stanley has revised earnings forecasts downward, from $282 to $274 per share for the S&P 500, reflecting a broader slowdown in earnings growth.
But let’s maintain perspective. Between 2015 and 2024, this group of companies achieved returns approaching 700%. That’s not luck, it’s sustained execution and market dominance.
A Market in Transition
Something interesting is happening beneath the surface. There’s a notable rotation away from mega-cap tech stocks toward cyclical companies that benefit from economic growth. Year-to-date in 2025, not a single Magnificent 7 stock ranks in the top 50 performers, with Meta being the sole member outperforming the S&P 500.
This rotation doesn’t signal the end of big tech, it reflects a broadening market where other sectors are finally catching up.
QQQ’s Performance: Still Leading the Pack
Despite the narrative of tech underperformance, the QQQ ETF has delivered a total return of 20.81% over the past year. Through September 30, 2025, it’s up 17.92% year-to-date, comfortably ahead of the S&P 500’s 14.83%. Analysts are projecting an average 12-month price target that suggests 16.76% upside potential.
The numbers don’t lie: tech still leads, even if the margin has narrowed.
Why Dollar Cost Averaging Makes Sense
The Psychology of Investing
Dollar cost averaging addresses one of the biggest challenges in investing: timing. By spreading £100,000 across six months (roughly £16,700 per month), I’m deliberately removing the stress of trying to identify the perfect entry point.
This approach limits the effects of market peaks and valleys, potentially reducing my average purchase price while improving long-term growth potential. More importantly, it helps me avoid the costly mistakes that come from emotional decision-making during periods of volatility.
The Trade-Off: Potential vs. Protection
Here’s the honest truth: if markets rise steadily over my six-month investment period, I’ll underperform a lump sum investment made in February. Research consistently shows that lump sum investing tends to outperform dollar cost averaging in rising markets.
But here’s what I gain: protection against a significant market correction in the first half of 2025, psychological comfort that allows me to stick with my strategy, and the discipline to see my plan through without second-guessing every market movement.
For a pension investment with a multi-decade time horizon, this trade-off feels right.
Understanding QQQ: Concentration as Both Strength and Risk
What You’re Really Buying
QQQ’s top 10 holdings represent approximately 54% of the fund’s assets. This isn’t a diversified bet on technology, it’s a concentrated wager on the Magnificent 7 and a handful of other dominant tech companies.
This concentration is precisely why QQQ has outperformed broader indices during tech bull markets. It’s also why it can underperform during periods of market rotation.
Current valuations appear fairly valued rather than bargain-priced. The recent rally hasn’t been driven by rising earnings expectations so much as by steady performance meeting investor expectations.
The AI Investment Divide
One reason I’m comfortable with the Magnificent 7 versus emerging AI companies lies in their approach to AI investment. While Meta spent $18.8 billion in just Q3 2025 on AI-capable data centers, Apple has taken a more measured approach.
The key difference? The Magnificent 7 can afford to invest heavily in AI because they have massive, diversified revenue streams. They’re not betting the company on AI, they’re enhancing already dominant businesses with AI capabilities.
Emerging AI companies, by contrast, often have minimal revenue and massive valuations based entirely on future promises. That’s where the real bubble risk lies.
Why February? Timing the Start
Starting my investment program in February rather than immediately provides several advantages. The annual Nasdaq-100 reconstitution was announced on December 12, 2025, meaning any structural changes to the index will be complete by February. This gives me a clear view of what I’m actually buying.
It also provides time to assess market conditions after year-end portfolio repositioning, when institutional investors often make significant moves that can create volatility.
The Risks I’m Accepting
Market Leadership Could Shift
The biggest risk isn’t a catastrophic collapse of big tech, it’s continued rotation toward value stocks and cyclical sectors. Even if the Magnificent 7 continue growing profits at healthy rates, my portfolio could underperform if market leadership shifts elsewhere.
Concentration Means Volatility
With 54% of QQQ in just 10 holdings, my investment will be volatile. A bad quarter from Apple or Microsoft will disproportionately impact returns. I’m accepting this concentration because I believe these companies’ competitive advantages remain intact.
The Timing Risk of DCA
If markets rise strongly and steadily from February through July, my phased approach will cost me returns. Every month I hold cash waiting to invest will be a missed opportunity if the market keeps climbing.
Why the Core Thesis Still Holds
Earnings Remain Strong
93 out of 100 QQQ companies met or exceeded Q2 2025 earnings expectations. More significantly, analyst estimates have risen 23.4% since September 2024. This isn’t a sector built on hope, these companies are delivering results.
Proven Business Models
The Magnificent 7 aren’t speculative plays. They generate massive free cash flow, dominate their respective markets, and have demonstrated the ability to monetize new technologies. They adapted to mobile, to cloud computing, and they’re adapting to AI.
Different from the Dotcom Bubble
Unlike the late 1990s, today’s tech giants are profitable, capital-efficient, and have proven their ability to monetize users at scale. The bubble risk exists in the private markets and among unprofitable AI startups, not in companies generating hundreds of billions in annual revenue.
My Investment Plan: The Practical Details
Starting in February 2025, I’ll invest approximately £16,700 monthly into QQQ within my pension. I’ll make these investments monthly rather than weekly to minimize transaction costs while maintaining the benefits of averaging.
I’m treating this as a core holding that will represent a significant, but not dominant, portion of my pension. My other holdings provide exposure to different sectors, geographies, and asset classes.
I’ll monitor earnings momentum each quarter, but I’m committed to completing the full six-month investment program unless fundamental business conditions deteriorate significantly, not just because of market volatility.
The Long-Term Perspective
This isn’t a trade, it’s a multi-decade pension investment. The six-month dollar cost averaging period is simply my entry strategy. Once fully invested, I expect to hold these positions for years, potentially decades, allowing compound returns to work their magic.
Technology isn’t going away. The companies that dominate today’s tech landscape have the resources, talent, and market position to remain dominant tomorrow. While their growth rates may moderate and market leadership may rotate temporarily to other sectors, their fundamental businesses remain sound.
The AI bubble, if it exists, is unlikely to significantly damage the Magnificent 7. They’re not AI companies, they’re dominant tech platforms that happen to be incorporating AI. That’s a crucial distinction.
Investing £100,000 into concentrated tech exposure is not a risk-free strategy. It requires conviction that the Magnificent 7’s competitive advantages remain intact and that their current valuations, while not cheap, remain reasonable given their earnings power.
Dollar cost averaging over six months provides a middle path between aggressive lump sum investing and excessive caution. It won’t optimise returns if markets surge, but it provides meaningful downside protection if volatility returns.
For a pension investment with a long time horizon, this balance feels right. The tech sector has driven returns for over a decade, and while that dominance may be moderating, it’s far from over.
Come February, I’ll begin putting this plan into action. The market will do what it does, my job is simply to execute the strategy consistently and let long-term compounding do the heavy lifting.
The Platform Move
I also recently switched from Aegon to Interactive Investor (II). The reason was simple: costs. Aegon was charging me 1.01% annually, which adds up significantly over time. II charges a flat £14.99 per month plus 0.25% on the funds I hold, a much better deal for my portfolio size.
The tech shares performed well while I held them, and I’m grateful for that. But now, with the 70/30 split between World Index Funds and S&P 500, I have a portfolio that’s diversified, low-cost, and appropriate for someone approaching retirement.
Sometimes the smartest investment move isn’t chasing the next big opportunity, it’s knowing when to simplify and protect what you’ve built.
Networth Dec 2025
Due to the move to ii, I have been out of the market for 4 weeks, so not a really big increase, only £4152K this month
| Date | Total Net Worth | £ Gain this month | % Gain this month | Accum Yearly Gain |
| 18/01/2025 | £476,266 | £6,214 | 1.32% | £6,214 |
| 16/02/2025 | £479,644 | £3,378 | 0.71% | £9,592 |
| 16/04/2025 | £375,446 | -£112,369 | -23.04% | -£102,776 |
| 16/05/2025 | £433,326 | £66,372 | 18.09% | -£36,404 |
| 16/06/2025 | £447,891 | £14,755 | 3.41% | -£21,649 |
| 16/07/2025 | £474,068 | £26,177 | 5.84% | £4,528 |
| 16/08/2025 | £490,406 | £16,338 | 3.45% | £20,866 |
| 16/09/2025 | £510,518 | £20,112 | 4.10% | £40,978 |
| 16/10/2025 | £533,165 | £22,647 | 4.44% | £63,625 |
| 16/11/2025 | £535,587 | £5,591 | 1.05% | £67,502 |
| 12/12/2025 | £539,739 | £4,152 | 1.40% | £71,654 |
| Yearly | 18.32% | £63,625 |
Will my networth go up or down next year
Disclaimer: This is my personal investment perspective and should not be considered financial advice. I am not a financial advisor. Always conduct your own research and consider consulting with a qualified financial professional before making investment decisions.