10 year return expectations

GavB79

edinburgher wrote: »

The question basically seems to be 'what would you invest in if you were targetting a 5% [above inflation] return over the next decade?'

So what would you invest in?

SomeUser

This is not a straightforward question. It depends on your appetite for risk, how you would feel if it's worth 100k in 10 years in today's money terms, whether you want to actually withdraw the money in 10 years time and how financially savvy you are.

masonic

GavB79 wrote: »

So what would you invest in?

If your main holding is VLS 100, then you might choose to adopt a 'core and satellites' approach in which you diversify into a small number of higher risk sectors which you hope will generate higher returns. Smaller companies are a popular example, as is an increased exposure to emerging markets. You might also choose to add specific allocations to sectors that appear to be undervalued from time to time.

GavB79

I was thinking longer term to hold 80% VLS100, 10% REIT, 5% physical gold (exclusively for when there is an internet meltdown and all my money is electronically stolen by cyber villains), and 5% cash (not physical).
I have seen that small cap and emerging markets are popular but, I am lazy and just want to 'set and forget', hence the Vanguard. Maybe reduce the VLS to 60% and have 10% small cap, 10% emerging.

I would not need to withdraw the money in 10 years, nor envisage ever needing it all in one lump. I am 34, already paying a mortgage, this would be early retirement funds as the goal. Something to tide me over until LGPS kicks in, therefore I can risk losing money it would just mean working longer.

Thrugelmir

bowlhead99 wrote: »

5% after inflation is not too delusional.

In the short term to medium term I will be surprised if 7% - 8% returns across the board are a realistic objective. Unless investments are targeted into very particular shares with good timing.

richyg

GavB79 wrote: »

I was thinking longer term to hold 80% VLS100, 10% REIT, 5% physical gold (exclusively for when there is an internet meltdown and all my money is electronically stolen by cyber villains), and 5% cash (not physical).
I have seen that small cap and emerging markets are popular but, I am lazy and just want to 'set and forget', hence the Vanguard. Maybe reduce the VLS to 60% and have 10% small cap, 10% emerging.

I would not need to withdraw the money in 10 years, nor envisage ever needing it all in one lump. I am 34, already paying a mortgage, this would be early retirement funds as the goal. Something to tide me over until LGPS kicks in, therefore I can risk losing money it would just mean working longer.

I think both portfolios are fair but with the self arranged portfolios it doesn't half take brass balls to sell your winners and invest in a falling stock market when the news is full of Lehman Brothers failing and runs on the banks. We are 5 years into a bull market remember.

The one thing about something simplen like Vanguard Lifestrategy 60% or 80% (as you have the LGPS) is it takes the difficult decisions away from you - it will just rebalance for you. Just keep throwing the money at it - each month/year

I have tried - with gold in a portfolio - thinking its fallen to a low - and purchased more - then see a 30% fall - then lose hope / give up and say emerging markets have taken a hammering and I must move the money to that -it will do better . Each time a few more £100's disappear - (and my mind after a few days wipes the loss out as it hates red number on the graphs)


I think lazy and set and forget it the way to go. Don't worry about
scrabbling for the 1% you might make with the tilts , reduce risk of bad habits, keep your costs low and your decisions simple - and I think you will win over all. Google or youtube John Bogle an old man but lots of experience.

https://www.youtube.com/watch?v=1_aSdiOdsz0


R.

sabretoothtigger

Gold isnt changing, thats the dollar price rising or falling. Mostly its speculators selling, which causes others to fear and do more selling. Nothing changed to make gold any less worth though, if anything the fundamentals to dollar got worse as it continues with a deficit and QE has still not stopped after all this time. In theory it might, thats the speculative part
BOE in theory was supposed to raise rates, who knows if they ever will meet inflation

then lose hope / give up

http://www.alphatrends.net/favorites/