Why doesn't everyone just buy Vanguard LifeStrategy?
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Murmansk
Posts: 929 Forumite
I'm fairly new to this investing thing and have a fair amount of cash invested in Vanguard LifeStrategy funds. In the three weeks or so that I have had them they seem to have gone up nearly 2%.
I've been reading a lot about investing both online and in the books that I have seen frequently recommended.
I've concluded that "passive investing" is the way to go and all the research seems to point to the fact that you might as well just use tracking funds and find a ones with low charges - hence Vanguard for me.
I've come to the rather cynical conclusion that financial advisers might be a breed who make their money from people who have lots of money but haven't the time or inclination to do a bit of research - and people who haven't worked out that you don't need to worry about all the complexity.
It seems to me that there is something of an "open secret" about Vanguard LifeStrategy in that they are great but the industry doesn't want everyone to know this because they'd all be out of a job!
I'm wondering what people on here think of this?
I've been reading a lot about investing both online and in the books that I have seen frequently recommended.
I've concluded that "passive investing" is the way to go and all the research seems to point to the fact that you might as well just use tracking funds and find a ones with low charges - hence Vanguard for me.
I've come to the rather cynical conclusion that financial advisers might be a breed who make their money from people who have lots of money but haven't the time or inclination to do a bit of research - and people who haven't worked out that you don't need to worry about all the complexity.
It seems to me that there is something of an "open secret" about Vanguard LifeStrategy in that they are great but the industry doesn't want everyone to know this because they'd all be out of a job!
I'm wondering what people on here think of this?
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Comments
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Because I don't want any exposure to bonds right now!0
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I'm fairly new to this investing thing and have a fair amount of cash invested in Vanguard LifeStrategy funds. In the three weeks or so that I have had them they seem to have gone up nearly 2%.
Beware that that is a very short timescale and depending on the fund chosen, the fund pricer per unit could fluctuate +- 2 or more %.
Eg. the Vanguard LifeStrategy fund I have went -3 to -4%.
So don't be duped into thinking that they will always give you 2% return.Goals
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It's fine to go with Lifestrategy if you have the time to research to know which fund to buy and have assessed your risk tolerance to know what equity level suits it.
It's fine if you know the best product to buy that fund in and is most suitable to your personal tax situation.
It's fine if you can monitor developments and changes in the market that may affect your investment or wrapper.
It's fine if you have a small amount of cash to invest and won't hit the ISA or pension thresholds.
For some people one or more of these doesn't match their situation so they may need assistance.I'm fairly new to this investing thing and have a fair amount of cash invested in Vanguard LifeStrategy funds. In the three weeks or so that I have had them they seem to have gone up nearly 2%.
Bear in mind that increases in a short timescale can't be extrapolated and could just as easily go the other way. How would you feel if it had dropped 40%?Remember the saying: if it looks too good to be true it almost certainly is.0 -
EdGasketTheSecond wrote: »Because I don't want any exposure to bonds right now!
You don't need to? Use the LS100 fundRemember the saying: if it looks too good to be true it almost certainly is.0 -
Lifestrategy is too biased to the lacklustre FTSE All Share Index0
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It would be a poor choice if you want a steady reliable income0
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For a good all round low cost option they are hard to beat. I have held VLS 60 for the past 3 years and happy with returns so far.
There will always be those who want to do better than average but I think over time, they may well underperform the equivalent VLS option.
A big thumbs up from me.0 -
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The answer would be stick with VLS and sell a small percentage each year. In years when there is a crash (hopefully not too many) and you don't want to sell at a loss, take the equivalent percentage out of a cash emergency fund.aroominyork wrote: »Interesting point. What is the equivalent of VLS for people who need more income than they yield? And if there isn't a natural one, is the answer to stick with VLS and sell a few each month to provide extra income?0 -
There isn't one really, you could look at VHYL but I wouldn't want to bet the bulk of my entire retirement income on a single fund. If it's just for extra income or treats like holidays or a new kitchen then maybe VLS would work for you. Horses for coursesaroominyork wrote: »Interesting point. What is the equivalent of VLS for people who need more income than they yield? And if there isn't a natural one, is the answer to stick with VLS and sell a few each month to provide extra income?0
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