New investor help - vanguard LifeStrategy fund with a possible 2015 crash.

gadgetmind

Ryan_Futuristics wrote: »

Basically same as bonds, it reduces currency risk, it's usually cheaper to own local stocks/funds, and better tax treatment

Surely any currency risk is short term? For normal equities, there is physical book and (hopefully) turnover that's index linked, so valuations should come out in the wash as currencies bob around.

Ryan_Futuristics

AlanP wrote: »

I'm aiming for much lower than that at about 23%.

As I said earlier Active Decisions implemented via Passive Funds.

It's a good way to work

But I don't think you can go *too* far wrong with your UK allocation ... The FTSE 100 gets 70-80% of its revenues from overseas - so it's really not very exposed to the UK economy at all

Subsequently, as the UK's had a relatively good recovery, most of the gains since 2009 have been in the FTSE 250 and Smaller Companies indexes, while the FTSE 100's really tracked global growth

gadgetmind wrote: »

Surely any currency risk is short term? For normal equities, there is physical book and (hopefully) turnover that's index linked, so valuations should come out in the wash as currencies bob around.

They should do, but it should at least help improve your Sharpe ratio a bit

Plus I always think it's nice to have different buying opportunities in your portfolio depending on currency strength

HUMBUG

gadgetmind wrote: »

Well, I've been investing for a few decades, and have multiplied my investments many fold during that time. I have achieved this mainly by ignoring all of the "end is nigh" merchants and financial "gurus".

While I lost out when believing all the 'gurus' that a long term investment in shares always beat bank deposit accounts . My bad luck that I invested during the period where the opposite occurred. Its all about 'timing' really as I actually made 2.5k in 6 months after investing in an M&G tracker fund after a 'crash'. But overall , I think I lost out on about 6k of my life savings durings that period.:(

gadgetmind

HUMBUG wrote: »

a long term investment in shares always beat bank deposit accounts . My bad luck that I invested during the period where the opposite occurred.

What do you mean by long term?

You can definitely lose out over cash, but you need to be very unlucky with entry and exit points and/or get your asset allocation wrong.

It sounds like you went for 100% equities and sold at a loss at the first sign of a major wobble.

HUMBUG

gadgetmind wrote: »

What do you mean by long term?

You can definitely lose out over cash, but you need to be very unlucky with entry and exit points and/or get your asset allocation wrong.

It sounds like you went for 100% equities and sold at a loss at the first sign of a major wobble.

I invested in the period 2000-2009 - where I invested 20k in share ISAs (I recall having about 20k in L&G trackers) my holdings would have grown to about 21.8k. If I had invested 20k in a cash ISA , they would have grown to 30.6k. So in fact I lost 9k approx but then cashed in on the crash about 2.5k so made a total loss of £6.5k.

I was 'suckered' in by greed at the time believing all the hype about how shares beat bank deposits over long periods of time . Well that 10 year period was the exception.

gadgetmind

Lots of 10 year periods are the exception, which is why it's the bare minimum period for investing. Also note that you'd have seen very different results over that period if drip feeding in money, and if you'd also had a better asset allocation.