Vanguard Lifestrategy funds - performance?
Comments
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Ryan_Futuristics wrote: »Don't forget you're investing in two of riskiest asset classes there are
The man who invests in Russia, Italy, and Poland says US total equity market and Bonds are two of the riskiest asset classes there are. I must have been born yesterday.0 -
TheTracker wrote: »The man who invests in Russia, Italy, and Poland says US total equity market and Bonds are two of the riskiest asset classes there are. I must have been born yesterday.
We're all in the same boat here - only difference is some of us factor in risk and some of us close our eyes
Take a look at these valuations and long-term returns:
A low CAPE always accompanies a bad outlook ... Russia's CAPE is under 5 today ... No nation trading this low has ever returned less than 6% real over 15 years
The US's CAPE is about 28 ... The highest it's ever returned from this point is 3% real
i.e. For me to return less than you, we'd both have to set new records going totally against long-term trends ... So who's taking the bigger risk?
As for bond funds - do your own research, but I'm avoiding them
He now holds 55% of his fund in cash as he prepares for what he calls “double digit devastation”, that is the effect rising bond yields will have on prices. Eigen predicts that 2015 will be worse than 1994, when bond markets suffered considerable losses as central banks raised interest rates. “You are going to get to a point soon where long-only bond funds will not make money ... Fixed income does not have the ability to make back losses like equities.”
http://www.morningstar.co.uk/uk/news/132373/should-you-invest-in-cash.aspx0 -
We hold different definitions of risk.0
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And yours looks like this
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ok so I get there are certain factors to take into consideration i.e interest rates rising and high distribution to US market, but will the fund take into account these factors and change where and how much they invest by ?
Or isit a case of this is what the fund is compiled of and there is no change in the investments?
also if some of the things you say do come true / do take affect how much is this likely to impact returns of this fund?
Atm all I can do is see how it performs for a few years and if not so well then I could swap and change if needed.
But also to remember my time horizon is quite long between 10-30 years depending how long I want to keep the money in the fund.0 -
ok so I get there are certain factors to take into consideration i.e interest rates rising and high distribution to US market, but will the fund take into account these factors and change where and how much they invest by ?
Or isit a case of this is what the fund is compiled of and there is no change in the investments?
also if some of the things you say do come true / do take affect how much is this likely to impact returns of this fund?
Atm all I can do is see how it performs for a few years and if not so well then I could swap and change if needed.
But also to remember my time horizon is quite long between 10-30 years depending how long I want to keep the money in the fund.
Vanguard *have* changed the asset allocation before (although they're relatively new funds) - but in this case I wouldn't expect more than a minor adjustment ...
For a start they're obliged to hold a fixed allocation in bonds - although on the upside they have recently created a short-term bond fund (will they use it to mitigate risk in Lifestrategy? I think it would be a bit silly if they didn't)
My worst case realistic scenario is the bond part of the fund just about breaks even over 15 years and the US returns about 1% ...
The other 44% of the fund comprises the UK (should do reasonably well), Japan (hard to say) and the more expensive parts of Europe (hmm...)
Just playing devil's advocate here - but the one thing I think you can count on is that the past 10-20 years are unlikely to repeat0 -
It looks like this is another area where I don't follow Ryan. Risk is usually defined in terms of the propensity of an investment to suffer short term losses or volatility. By both measures bonds (and arguably US stocks) are lower risk than Russian stocks. Risk and returns are usually correlated, so the best long-term returns are found in the riskier investments. There is clearly some cause for concern about what will happen to bond funds, but to suggest capital losses will rival those seen during an equity market crash is overstating the situation IMHO.
Russia indeed looks cheap and has done for some time and we've seen it fall by a third in the past few months. It could easily halve again in the short term. I'm happy to build a position, topping up on the way down, but it's not for widows and orphans.0 -
Ryan_Futuristics wrote: »
My worst case realistic scenario is the bond part of the fund just about breaks even over 15 years and the US returns about 1% ...
Just playing devil's advocate here - but the one thing I think you can count on is that the past 10-20 years are unlikely to repeat
Wow! Thats great news thank you!!
That means that in your expert opinion we are going to have a 15 year period of buying cheap units. Followed by 10-15 years of growth that will see us make a fantastic profit from our cheaply bought units just in time for retirement.
Amazing. Thank you.0 -
yes you get exactly what I mean im looking for real investors experiences.
if you don't mind how much did u lump in initially and how much do you invest monthly. 14.77% is pretty good over a year
To be fair that return is over almost 2 years.
The initial lump sums weren't all that much to be honest.
£4k in the ISA and I transferred an old pension into a SIPP so that I could play with real money rather than read about it (about £7k).
My main pension income will be from the Teachers Pension Scheme and Local Government Pension Scheme, so this was to some extent 'play money'.
P.S. Sorry that your genuine quest for information has been turned into yet another opportunity for people to push their personal investment preferences, value investment and CrAPE arguments.
This used to be a great forum for people who wanted to learn and to ask genuine questions. Its almost painful to read in recent months.
All the best.0 -
Predicting the future as been a human pastime for as long as you can go back in history. As of now, the future has not paid any regard to the predictions.....it's all just a more or less educated gamble, and the only one thing you can be sure of is that you cannot count on anything, lol.Ryan_Futuristics wrote: »the one thing I think you can count on is that the past 10-20 years are unlikely to repeat0
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