Vanguard Lifestrategy funds - performance?

Ryan_Futuristics

ExMugPunter wrote: »

Long term Reversion to the Mean. That also sounds good to me.

I dont need to buy cheap to hit my figures, I just need the long term average.

As the 'weakest' part of the LS funds is apparently the US, the long term average return from there is what 7%, 10% depending on how you measure it?

If they are going to spend 15 years at 1% to get them back to the 'mean' (get them back to fair value)?
So after that ( in order to keep their long term mean) they will then grow at around 7%.

Lovely. Thank you!

If they do follow this theoretical trend, you will be in savings-account-beating profit within about 30 years

I'll get the champagne ordered in good time

Ryan_Futuristics

colsten wrote: »

Whilst he has been a whole lot more eloquent than I will ever be, I frankly don't give a damn about what he said about the future. He was no more capable than you or I or any other human being to predict the future, beyond simple facts like "if you go broke, your shares will be worth nothing" or "if you jump into a fire, you are unlikely to get away without burns".

Nobody needs an Arthur C. Clarke for those simple facts. And no Arthur C. Clarke - type can predict the future of economies, or even (or particularly) the future of a given company.

Arthur C. Clarke predicted the invention of the internet, telecommunications satellite, 3D printing, the iPhone, etc.

From 1974: "[H]e will have, in his own house, not a computer as big as this, [points to nearby computer], but at least, a console through which he can talk, through his local computer and get all the information he needs, for his everyday life, like his bank statements, his theatre reservations, all the information you need in the course of living in our complex modern society, this will be in a compact form in his own house ... and he will take it as much for granted as we take the telephone." ... I think you really need to read up on Arthur C. Clarke before you start discounting futurism


On predicting stock returns ... Warren Buffett managed it remarkably well for over 50 years, returning an average 20%/annum

George Soros would've turned your £1,000 investment into £14 million, while the S&P 500 would only have returned £30,000

It's perfectly possible to value stocks and markets, the fact the average investor does so poorly just says one thing: Don't be the average investor ... And don't be fooled into thinking the 60:40 passive portfolio the Lifestrategy fund's based on isn't a fairly specific strategy that's every bit as prone to chaos and human stupidity as any other

colsten

Ryan_Futuristics wrote: »

Arthur C. Clarke predicted the invention of the internet, telecommunications satellite, 3D printing, the iPhone, etc.

From 1974: "[H]e will have, in his own house, not a computer as big as this, [points to nearby computer], but at least, a console through which he can talk, through his local computer and get all the information he needs, for his everyday life, like his bank statements, his theatre reservations, all the information you need in the course of living in our complex modern society, this will be in a compact form in his own house ... and he will take it as much for granted as we take the telephone."

I think you really need to read up on Arthur C. Clarke before you start discounting futurism

Of course any half-intelligent person will have opinions on the future, and many of us will not be totally wrong with what we think might happen in the future.

You can choose to believe in the predictions of whoever you like, but the only thing you can be sure about is that you cannot be sure about their predictions. Doesn't matter what the person's name / title / standing is.

Kendall80

colsten wrote: »

Of course any half-intelligent person will have opinions on the future, and many of us will not be totally wrong with what we think might happen in the future.

You can choose to believe in the predictions of whoever you like, but the only thing you can be sure about is that you cannot be sure about their predictions. Doesn't matter what the person's name / title / standing is.

True wisdom lies in knowing that we know nothing?

InvestInPoker

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.

masonic

Ryan_Futuristics wrote: »

Valuation isn't a trend ... Valuation is just a way of quantifying what market prices mean by weighing them against something - such as earnings ... So to say stock prices won't follow their own underlying value anymore would be a much more radical statement than to say they still will

As you say, valuation isn't a trend, but it is derived from trends (in particular, long term averages). It is also only an estimate of intrinsic value. It is one approach to buying cheaply. Others are diversification with regular rebalancing, drip feeding, waiting for dips in the market, etc. All of these have their merits and limitations. It is best not to forget the latter.

Kendall80 wrote: »

True wisdom lies in knowing that we know nothing?

It's more about appreciating the limitations of what we think we know and hedging our bets accordingly. I'm not willing to sell all of my US equities, but I have sold some. Ryan is limiting his exposure to Russia to about 5%, despite the huge opportunity it appears to present.

I agree with Ryan that the returns from Vanguard LS are likely to be below what one could achieve following a more sophisticated strategy, but for those people who don't have the understanding or inclination to keep an eye on their investments and react to changes, Vanguard LS is a better starting point when the alternative is that they remain in cash. They are also more likely to learn on the job, so to speak. Dripping money into something that has a risk of turning out sub-optimal is part of the learning process and fairly inevitable. Who still invests using exactly the same strategy they started out with? I know I don't.

jimjames

ExMugPunter wrote: »

Of course that is true.

However. this forum is generally the first port of call for people absolutely brand new to investing.

They seem to have come here ( just like I did) to avoid the complex jargon 'noise' of the financial press. So what is the point of then throwing them back to the lions with a graph that means nothing?

I have asked a range of questions on here and have received some fantastic answers back. But things seem to have changed recently.

The Op asked for real life examples, why not help him/her?

This forum has changed

I think there have been helpful replies. The suggestions for the different sites that show performance and graph returns would do what's required.

When it was then suggested that the return over 3/6 months etc wouldn't match the times that investment was made then I think you're not really looking at it the right way.

By all means track your own investment using spreadsheet or online tools but you can't expect a tool on trust net to show the exact return from investment on different days of the month.

krish123

redpete wrote: »

I do consider it helpful to the OP to point out that that the question they asked won't result in information that they should base their investing strategy on.

I could quote real returns I have seen from my investments but would be no use unless I also said that I invested in a couple of Japanese funds just before the crash that they have not recovered from many years later, or that investments in UK funds have had great returns but would be even better if I'd sold rather then held etc. etc.

Hi , I'm not using people's examples as to base my investing on. It's purely to find out illustrative examples of other people who have invested in similar/same funds to get a picture of what is happening in terms of returns that's all.

And the fact that I have asked this question has provided me knowledge anyway (us sector of the fund seems overvalued) so there is no harm in asking .

ColdIron

krish123 wrote: »

Hi , I'm not using people's examples as to base my investing on

Are you sure about this?

krish123 wrote: »

And the fact that I have asked this question has provided me knowledge anyway (us sector of the fund seems overvalued) so there is no harm in asking .

Seems to me that you are perilously close to doing just that. Don't confuse opinion and fact, Ryan may be right in his outlook but then he may not

Ryan seems to be a conviction investor and good luck to him but very few, if any, mixed asset funds would take his approach. I have a significant sum in multi index funds and would feel very uncomfortable with that lack of US exposure, but hey I might be wrong too

Just my 2c but as a novice investor following the herd may not be the worst thing you could do, at least until you can justify your own decisions and then you get to be wrong too

HTH

tigerspill

Ryan_Futuristics wrote: »

We often clash on this, but the repeating *trend* of the future would be the US remaining the fastest growing, most stable, most over-invested market on the planet, while bonds move against equity markets and provide adequate cover

That's a) rather unlikely, and b) what you're betting on with a Lifestrategy portfolio

Valuation isn't a trend ... Valuation is just a way of quantifying what market prices mean by weighing them against something - such as earnings ... So to say stock prices won't follow their own underlying value anymore would be a much more radical statement than to say they still will

As a newbie to the whole world of self investing I am still on a huge learning curve.
One thing I think you have mentioned a few times is "Valuation" and that many deem the US is currently over-valued.
Obviously simple logic would suggest the buying of under-valued funds and selling over-valued funds.
My question is how do you go about assessing what is over and under valued? If the US is generally over-valued currently, what would you consider as being under-valued?
I have also been looking at the LS funds and they do seem to have a high %age in the US which also concerns me if they are generally considered as over-valued.