Vanguard Life Strategy

Carpi09

Initially when I started this thread, I wanted one simple fund but having developed my knowledge from starting out, I want to look into adding more. For now, I am limiting myself to 50% of the annual entitlement into S&S and the other 50 into a cash

For now I will be looking to stay with the VLS however that soon could change and i will then start to look into other funds...

I know past has no relevance when it comes to future rises but having looked at some other funds, they are producing far greater rises.

Something I will be looking at over the years to come as I am only 23 years old.

takesyourchances

I was very similar when looking to start similar time to you, the biggest step was starting the S&S ISA and getting into the mind set of it. Good that you are filling both ISA limits and that you are also interested to look at some other funds as well from developing your knowledge.

Some of the past performances look to have been good with some other possible side fund ideas, while we don't know what is ahead a bit more coverage outside the Lifestrats on smaller holdings could be good long term.

You are doing very well starting all of this at 23 and filling your cash and S&S ISA's and a lot of years ahead, so great mind set for your future

With the global focus in the lifestrats being large companies, one of the previous posts was on global small caps, which I thought was interesting when the Vanguard Global Small Cap was mentioned, but it is was not available on HL's site when I checked.

Having a look through various funds etc and reading tonight I found on HL's web site an interesting new Global Small Cap fund started in January 2012 which so far looks to have performed ok, but early days.

Maybe this is one worth keeping a watch on down the line if this would diversify a bit more with the Lifestrat exposure anyone?

It is the "Standard Life Inv Global Smaller Companies Retail Accumulation" ....this is the first I have found on HL's site for Global Small Caps, there maybe is others though.

I should have the Smarter Investing book by Tim Hale soon, so will be starting some reading at that.

Best regards.

gadgetmind

takesyourchances wrote: »

this is the first I have found on HL's site for Global Small Caps, there maybe is others though.

Vanguard have a global small cap tracker, which I use on BestInvest. As BI have an "eat all you like" £60 pa charge for an ISA, I use various trackers and funds to boost my exposure to small/mid caps, value/income, EM, Asia Pac, and (with naughty market timing!) Europe, property and financial debt.

Carpi09

I was just thinking about the monthly set up I have on HL. Currently 450 a month with the VLS 80. It comes out on the 8th of each month, £50 being the minimum monthly contribution.

Now say for example, the price has been increasing all week and then starts to level off on the 8th of the month, just before the payment is due, you believe it's going to fall but this will be just after your monthly contribution has been made.

Sorry if this is stating the obvious but I am still learning, would it make sense to keep the monthly contribution at £50 and add as and when I believe it's a good time. I know I can't predict the future but sometimes, you can predict if there is going to be a slight fall or rise.

Is there any difference with the fees whether I choose to do it monthly or add as and when?


Thanks!

gadgetmind

Fees should be the same no matter how you add money.

Predicting any rise or fall is close to impossible, and the forward pricing of funds removes any remaining doubt. LS is even harder because it covers many markets so there is even more of a delay IME.

Carpi09

I did notice that actually after posting. There is a delay so yes, thanks for that.

grey_gym_sock

the minimum investment may be higher for a lump sum investment, rather than monthly. for HL, i think the lump sum minimum - when it's a top-up, i.e. you already hold the fund - may be £250, though i don't know if this varies between funds.

however, consider what you'd do if you delay, expecting the price to fall, and then it rises instead. would you buy at the higher price, or wait until it falls to the price you hoped for, or what? if you keep waiting, do you postpone the next monthly contribution, too? then you could end up not adding to your investment just when a good bull run is getting going.

nicknameless

Carpi09 wrote: »

Initially when I started this thread, I wanted one simple fund but having developed my knowledge from starting out, I want to look into adding more. For now, I am limiting myself to 50% of the annual entitlement into S&S and the other 50 into a cash

For now I will be looking to stay with the VLS however that soon could change and i will then start to look into other funds...

I know past has no relevance when it comes to future rises but having looked at some other funds, they are producing far greater rises.

Something I will be looking at over the years to come as I am only 23 years old.

I'm no expert BUT doesn't that view wholly contradict the theory underpinning passive investment and related products? Of course there are funds outperforming indices but it's the inability to predict which these will be, the likelihood that they'll revert to a theoretical mean over time, and their excessive costs, that add up to selection of a passive strategy.

Isn't it all about whether you buy those arguments, and perhaps whether you also buy the argument that passive investing is inefficient in certain niche markets?

The argument about whether VLS products are the best way to pursue a wholly (or largely) passive approach as a UK investor is seperate to that isn't it and then becomes about whether you want to be able to replicate the global market as best as possible?

My (current) understanding is that any discussion of weighting allocations to sectors or regions we think will outperform others and / or discussion of timing market entry, does not fit with passive investment theory i.e. capturing the avaerage returns of the 'global market' for the least cost.

Linton

nicknameless wrote: »

.......

My (current) understanding is that any discussion of weighting allocations to sectors or regions we think will outperform others and / or discussion of timing market entry, does not fit with passive investment theory i.e. capturing the avaerage returns of the 'global market' for the least cost.

I agree that is the clear consequence of the passive theory. But it would seem that when it comes to investing their own money many passive enthusiasts arent actually 100% convinced. You do need to have a very deep faith to ignore the large returns over the past 10 years in the Far East, Emerging Markets etc.

The other problem I see with the absolutist application of the theory is that it results in a portfolio that is very far from following what is normally accepted as a sensible allocation for a UK investor. In particular, it means putting around half your money in the USA, a quarter in Europe, with the UK in 3rd position.

The final problem seems to be one of access to Global Trackers. Perhaps they are common but I havent been able to find one with a quick search through Trustnet. Vanguard would appear to only offer a Developed World Ex UK Tracker. L&G have a 100 largest companies tracker. Neither of these quite fits the bill for a true global tracker.

gadgetmind

Linton wrote: »

You do need to have a very deep faith

The passive investor needs to have zero faith as they are using an evidence-based approach rather than putting their faith in a "super investor".

ignore the large returns over the past 10 years in the Far East, Emerging Markets etc.

Why would you ignore this whether using an active or passive approach? You let the evidence steer your hand and tilt your portfolio accordingly.

In particular, it means putting around half your money in the USA, a quarter in Europe, with the UK in 3rd position.

That's an asset allocation issues rather than a matter of what vehicles you use to gain exposure to those asset classes and territories.