VLS 60 buying more now ok?
Comments
-
bowlhead99 wrote: »So the solution could be, assuming you are at the top of a boom ready to invest, only ever invest 2/3 of what you want to invest, then when it crashes 50%, invest the other 1/3 (being half what you originally invested) at the bargain price of 50p in the pound. Then after waiting anything from two to ten years until price is back where it all started at a pound, tranche two will have doubled (100% gain) and tranche one will have recovered back to the beginning for 0% gain.
So at that point, end of the economic cycle you would have your tranche one £2 which is back up to its starting £2, and tranche two £1 which turned into £2, so overall you have turned £3 into £4 for a 33% gain.
Alternatively if you had just invested mid way through the cycle when things were not at peaks, you could have invested everything at a price of 75p (instead of 2/3 at 100 and 1/3 at 50p) and seen it go up to 100p, t growing your overall total by 33%.
Of course, we don't really know where we are in the cycle so it isn't clear if we should go all in (hoping today is the "75p" point), or assume today is the "100p" point and leave a third uninvested for the "expected" 50% crash. It is just an unwinnable game of trying to time the market with cash on the sidelines.
One thing is clear, if you gamble strongly on one approach being right, you will be disappointed of the other was better. This is where the oft used cliche "it's 'time in the market', not timing it" mantra comes from.
Generally if you invest as spare investible money becomes available from salary or other income etc, you will probably be fine over the long long long term, but the large inevitable downturns will happen whether you are mentally prepared or not, so if you find it difficult to mentally prepare for them, consider products which are unlikely to have peak-to-trough downturns as high as 50%.
This may rule you out of some products which your friends or fellow forum members have. Which is fine. World would be boring if there was only one personality type or investment method and we all had to accept it.
My maths was wrong, very wrong!
Personally I will be continuing to make regular monthly contributions to my S&S ISA from disposable income.
If, however, a huge drop occured, is that not an opportunity to reallocate funds from elsewhere?
If I have cash savings or p2p investments or the opportunity to make use of a money transfer might that be a good time to consider a lump-sum or an increased monthly contribution? Obviously your decision would be influenced by how attractive other options were.
I am personally prepared for a downturn of 50% (or higher) as I'm investing long-term and feel that I have enough cash savings to call upon in all but the most catastrophic event.0 -
Does it really matter if your VLS60 and VLS20 (or whatever you decide to go for) aren't exactly 50/50 in the amount of money to have in each?
If you put £1K in each one and a year later one is £1,200, and the other is £1,400 is it really important?
I'd just leave it, personally.
Until i decide if i want to sell the VLS60 and replace with VLS40, will adding the VLS20 before april deadline incur 2 platform charges or fund charges on CSD.:T0 -
There are no charges for buying and selling funds at CSD, and platform charges depend only on the total value of your investments.Until i decide if i want to sell the VLS60 and replace with VLS40, will adding the VLS20 before april deadline incur 2 platform charges or fund charges on CSD.0 -
Generally if you invest as spare investible money becomes available from salary or other income etc, you will probably be fine over the long long long term, but the large inevitable downturns will happen whether you are mentally prepared or not, so if you find it difficult to mentally prepare for them, consider products which are unlikely to have peak-to-trough downturns as high as 50%.
My Aviva pension has over 2000 different funds. How do you know which ones are unlikely to have 50% downturns?
WOW! 2000 funds? That's nuts!
Did Aviva set them up that way or you did?0 -
Except that you may not need that money in 10/15 years - you are no longer required to buy an annuity with your pension pot, instead you can just take an income, either by switching to income focused funds or by selling a small part every year (or both).This is what people do with their pensions. If you are 20/30/40 years old, then you can take risks. But once you hit 50 and you only have 10/15 years to go until you need that money, then you want to start moving your investment into safer places.Eco Miser
Saving money for well over half a century0 -
WOW! 2000 funds? That's nuts!
Did Aviva set them up that way or you did?
That just means that you have a choice from that many funds, it's not a huge amount and many platforms will be similar, there are frequently limits on either the number of funds or the minimum holdings, so it would be unusual for most people to have more than ten say.0 -
Most of the wrap platforms are around the 30,000 mark when it comes to available investments to hold on platform.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0
-
My maths was wrong, very wrong!
Personally I will be continuing to make regular monthly contributions to my S&S ISA from disposable income.
If, however, a huge drop occured, is that not an opportunity to reallocate funds from elsewhere?
How do you know what a huge drop is?
Check out the dot com crash. The red cross is a 33% drop then it starts going up again - time to buy surely, because it has crashed back down to normal levels.
0 -
Except that you may not need that money in 10/15 years - you are no longer required to buy an annuity with your pension pot, instead you can just take an income, either by switching to income focused funds or by selling a small part every year (or both).
Fair enough about not buying annuities anymore. But principle still stands that you want less risky investments when you approach/reach retirement?0
This discussion has been closed.
Categories
- All Categories
- 343K Banking & Borrowing
- 250K Reduce Debt & Boost Income
- 449.6K Spending & Discounts
- 235.1K Work, Benefits & Business
- 607.8K Mortgages, Homes & Bills
- 173K Life & Family
- 247.8K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards