Vanguard Life Strategy

grey_gym_sock

personally, i do hold vanguard developed world ex-UK, but am diluting the US exposure by also holding separate dev. europe ex-UK & japan (and will perhaps add more asia pacific ex-japan).

though i take the point that a lot of big US companies operate globally. i'm not sure which way i prefer to look at this ...

gadgetmind

Anyone who thinks that recent performance of any asset class or territory can tell you anything useful about future performance needs to have a look here.

http://www.hl.co.uk/news/articles/past-present-and-future

The only take away pattern that I see is that (nearly) everything that has a huge drop then tends to make a quick recovery. This is why it's better to be diversified and to rebalance, which LifeStrategy does for you.

srcandas

gadgetmind wrote: »

Anyone who thinks that recent performance of any asset class or territory can tell you anything useful about future performance needs to have a look here.

Not disagreeing with your sentiments but clearly past performance tells you a great deal. One thing it tells you is flavour of 2012 is not necessarily flavour of 2013.

It isn't past performance that gives you bad information. It is looking at too shorter time frames of past performance and simplifying what you see by looking at for example indexes that gives you bad information.

gadgetmind wrote: »

The only take away pattern that I see is that (nearly) everything that has a huge drop then tends to make a quick recovery. This is why it's better to be diversified and to rebalance, which LifeStrategy does for you.

If everything falls and recovers this clearly is an argument against diversification

I think what the past shows is that if you are squeezed on time, when you need the money, there is high risk. It also shows you that enormous diversification gives very average results and thus a simple approach, like a truly diversified life style fund, may well be better than building a complex highly diversified portfolio.

But if you want a better than average profit you need to accept greater risk - but that isn't necessarily the incorrect approach.

When all said and done there is not a tracker for world wide well being so all portfolios are managed to a greater or lesser degree.

coastline

might be of some use to posters...US based but Vanguard is well placed on here...

http://www.longtermreturns.com/2012/03/selecting-investment-strategy.html

http://www.longtermreturns.com/2012/03/vanguard-lifestrategy-funds.html

http://www.longtermreturns.com/

no idea how accurate these are but it goes back years...

http://www.longtermreturns.com/p/historical-investment-returns.html

Jegersmart

It is worth bearing in mind perhaps that although Coca-Cola does indeed earn most of its revenues outside of the US, it will be quite sensitive to market sentiment in the US. If the SPX/DOW fall heavily, so will Coca-Cola, although Coca-Cola has outperformed the SPX over 5 years.

J

takesyourchances

Excellent reading today and very interesting from all of the post

I have allocated my first drip feed of £150 to my Vanguard 60% fund, I am going to change the direct debit to £200 for next month and see where that leads.

I enjoyed reading the various replies today and also on the Vanguard developed world ex-uk tracker and the opinions on the North American exposure being 50% of the fund.

Also interesting that Grey Gym Sock has this fund and is balancing out in Europe in another fund for the North American Holding in the Global.

As regards to a side fund, I think after the past few days replies if I was to add another I would like to diversify, in the Vanguard range on HL, the Vanguard developed world ex-uk is standing out as an option maybe. Would this diversify in well with the lifeguard strat 60% bringing a bigger holding in North America and covering some of those companies as the Lifestyle has reasonable size UK holding along with the other markets?

I seen there is bit of a bigger Asian holding in Japan in the Global fund.

In other words would these two funds compliment each other in the right direction covering some more caps from the Lifestrat 60% with the developed world running at a less of a holding than the lifestat 60% fund?

If this was the case, as the investment rose over a bit of time as I would like to reach a goal of 10K invested without complicating things too much for myself, could a further diverse be added at this goal stage to bring some exposure to Asia and Pacific for example to diverse a bit from the UK and North American holdings. I think Asia could have potential from a purely novice perspective here, but wouldn't want to over expose the holding in Asia but at least be in the market at some point. Then there is maybe the option of what grey gym sock has done in developed Europe rather than Asia.

How does this sound as a starting out mix?

I can continue to hold and invest in the Lifestrat 60% if that idea would not blend well or if it would start with a smaller investment and build it up keeping the Vanguard 60% as the higher percentage main core.

I am also going to order the Tim Hale book this weekend to learn more.

Thank you!

Best regards.

gadgetmind

Holding one Vanguard fund on HL makes sense, but two doubles the fees. Whether this is an issue depends on your pot size.

takesyourchances

gadgetmind wrote: »

Holding one Vanguard fund on HL makes sense, but two doubles the fees. Whether this is an issue depends on your pot size.

Yes very true about the fees, I was thinking this also today about a second fund as the fees then double.

If the strategy of the second fund maybe the global would be a reasonable second option with the Lifestrat 60% maybe it could be better to wait until the pot is increased as at the moment I have £2750 invested as of today as this is a new opening.

A goal could be to reach £10000 invested and then decide. I am in this for the long term as have enough cash in my cash ISA at the moment, so I am looking to build this up well steady.

Two sets of fees is a consideration to take in with the pot at the moment.

Best regards.

gadgetmind

I'd say that it's best to keep it simple and therefore keep fees down.

My wife has a simple SIPP with LS 100% for 80% of it and then a couple of Strategic Bond funds alongside to reflect my view that the fixed interest markets are currently out of kilter.

With out larger pots (my SIPP, her ISA) we use a range of Vanguard trackers (BestInvest so "all you can eat" £60pa fee for an ISA) but have more or less adopted the LS territory weightings. I have tweaked towards income, EM and smaller caps, but they are just tweaks and GOK if it will increase returns over the long term.

Many US companies are major world players and they also have both growing markets and cheap labour pools on their doorsteps.

takesyourchances

Thank you gadgetmind for your input, upon thinking more I think there is a lot to be said for keeping it simple, the LS seems a good mix on its own and adding fees on the pot size at the moment and early stages maybe not the best idea.

Also as you said in the long term with tweeks would it increase the returns etc.

I enjoyed asking questions and looking to learn and will keep learning, I do like the simple approach of the LS which was what helped decide to take this fund out. I think it is best at the moment to focus on increasing my pot size in the LS 60% I reckon by the end of this year I should have between 7k - 8k invested in it and this is a totally long term view being 33 at the moment.

Thank you again, I think at the moment this is pointing me towards the simple approach and keep funding away at it.

Best regards.