Vanguard life strategy

guitarman001

I'm 27 and I'm paying into the 20% version until I see a fundamental improvement in the worldwide stock markets. I know, I KNOW, the idea is to average over time and not time the market. However I've lost so much money on equities already that for now, I'm happy to be invested mainly in higher-yielding bonds - I can always add to another Vantage fund at some point if and when I feel like it. The 20% fund still has a decent return compared to the others (check it).

DavidLaGuardia

guitarman001 wrote: »

I'm 27 and I'm paying into the 20% version until I see a fundamental improvement in the worldwide stock markets. I know, I KNOW, the idea is to average over time and not time the market. However I've lost so much money on equities already that for now, I'm happy to be invested mainly in higher-yielding bonds - I can always add to another Vantage fund at some point if and when I feel like it. The 20% fund still has a decent return compared to the others (check it).

How long a time have you lost over?
Waiting for improvement risks missing the biggest rises thatr only occur on a few days.
Bonds also may be over priced.
High Yield Bonds are more correlated to the stock market anyways!

wriggly

guitarman001 wrote: »

I'm 27 and I'm paying into the 20% version until I see a fundamental improvement in the worldwide stock markets.

Shares are one of the few purchases where many people wait for prices to rise before buying.

guitarman001 wrote: »

The 20% fund still has a decent return compared to the others (check it).

Yes, it has actually been a good investment for the last year or so, but the bonds in the fund are very low yielding, and prices are likely to stagnate or drop slightly in the future.

Shares are also likely to have a hard time, with perhaps significant volatility still to come. But over the long term (10 years +) they can be expected to do significantly better than bonds.

There are no guarantees, and I'm not saying to move to 100% equity, but there are basically two outcomes:

1. the currency and debt problems of the developed countries cause the entire world economy to collapse, in which case it doesn't matter where you're invested.
2. the economy returns to some sort of normality, in which case shares will perform significantly better than bonds.

srcandas

wriggly wrote: »

1. the currency and debt problems of the developed countries cause the entire world economy to collapse, in which case it doesn't matter where you're invested.
2. the economy returns to some sort of normality, in which case shares will perform significantly better than bonds.

Very true but these happenings will not happen over night.

My experience tells me nothing radical - that is positive - that impacts funds and markets happens in a 3 day period. And we can all switch funds within a 3 day period.

However by jumping into equities too soon you can make your starting position so weak that a recovery (even a big one) does no more than return you to your original investment position.

I'm with guitarman that now is a time for caution and very targeted localised high risk investments if that is your thing.

But horses for courses :beer:

Vortigern

What would the tax position be if the 60% equity lifestrategy fund is held in a HL ISA? I know there would be no further income tax or CGT to pay, but in the case of a 100% corporate bond fund within an ISA, I believe the ISA manager can reclaim and refund the tax paid on the income. Will HL refund the tax paid on the income from the 40% fixed income element of this fund?