Need a nudge to take the plunge

Chris75

Isn't the whole of the market based on predictions? We just don't all share the same expectations which results in the market.

ChopperST

noggin1980 wrote: »

I do want a decent chunk of America despite the warnings but the lifestrategy fund is more America centric than my preference. As long as I pick similar cost funds is the only downside to having multiple funds instead of the 1 that I'd have to rebalance myself? When moving away from a percentage cost platform in a few years would I then have to pay say 5 fee payments per monthly deposit instead of one?

I think if you are confident then that's a better way to go than the LS funds. You can also tinker with your asset allocation as you see fit, rather than adopting Vanguard's pre-set modelling. It also as you have highlighted earlier allows you to add allocations to EM's and Small Caps which are somewhat neglected there also. You might also want to consider a property fund for even more diversification?

I personally rebalance on a quarterly basis or if I have any spare cash I will add in to those part of my portfolio that are under performing to help bring down the average cost of the units. You may find this article from Market Watch useful - http://www.marketwatch.com/story/the-right-way-to-rebalance-your-portfolio-2014-02-18

bowlhead99

noggin1980 wrote: »

. As long as I pick similar cost funds is the only downside to having multiple funds instead of the 1 that I'd have to rebalance myself?

Yes, £1000 at 0.5% is the same as £900 at 0.5% plus another £100 at 0.5%. When your mix of holdings moves to 940/60 or 860/140 or some other arbitrary mix, you can either sell some of one to buy more of the other, or divert your monthly contributions to try to bring back in line

When moving away from a percentage cost platform in a few years would I then have to pay say 5 fee payments per monthly deposit instead of one?

If you are paying transaction fees for each buy then yes. But the simplest thing to do if you wanted to economise is to buy less frequently: Fund 1 in Jan and July and Fund 2 in Feb and Aug etc and only every pay one transaction fee in a month. In the long long term it doesn't matter if you invest daily or weekly or monthly or annually as long as you are generally adding over time.

Or invest a couple at a time doing Fund 1 and 2 in Jan, Fund 3 and 4 in Feb, Fund 5 and 1 in March, Fund 2 and 3 in April, etc etc. Or just suck up the 5 transaction fees a month and let it run.

noggin1980

ChopperST wrote: »

I think if you are confident then that's a better way to go than the LS funds. You can also tinker with your asset allocation as you see fit, rather than adopting Vanguard's pre-set modelling. It also as you have highlighted earlier allows you to add allocations to EM's and Small Caps which are somewhat neglected there also. You might also want to consider a property fund for even more diversification?

I personally rebalance on a quarterly basis or if I have any spare cash I will add in to those part of my portfolio that are under performing to help bring down the average cost of the units. You may find this article from Market Watch useful - http://www.marketwatch.com/story/the-right-way-to-rebalance-your-portfolio-2014-02-18

Thanks,

I don't think I want anything in property, we own half of 2 flats (sister in law owns the other halfs), my father in law owns 20 flats and mill+ house and we currently have money lent to a developer (through the father in law who guaranteed our capital) so my wifes inheritance amount is already significantly tied to the property market.

To be honest I'm doing this for my wife, I probably only have a couple of years to live and I want to get some good savings going and have everything in place so she can just follow some instructions. She's a smart woman but I want some diversification for her rather than just investing in property and loaning to developers that will come from her father. It's only in the last couple of years we've really had any money as her father starts to give her money to lower inheritance tax (assuming he lives 7+ years more) I want to make sure we are saving well for her future in cash, her pension, isas etc. Of course we are blowing plenty on awesome holidays too for the memories and to enjoy our last couple of years together :beer:

noggin1980

bowlhead99 wrote: »

Yes, £1000 at 0.5% is the same as £900 at 0.5% plus another £100 at 0.5%. When your mix of holdings moves to 940/60 or 860/140 or some other arbitrary mix, you can either sell some of one to buy more of the other, or divert your monthly contributions to try to bring back in line

If you are paying transaction fees for each buy then yes. But the simplest thing to do if you wanted to economise is to buy less frequently: Fund 1 in Jan and July and Fund 2 in Feb and Aug etc and only every pay one transaction fee in a month. In the long long term it doesn't matter if you invest daily or weekly or monthly or annually as long as you are generally adding over time.

Or invest a couple at a time doing Fund 1 and 2 in Jan, Fund 3 and 4 in Feb, Fund 5 and 1 in March, Fund 2 and 3 in April, etc etc. Or just suck up the 5 transaction fees a month and let it run.

Thanks, sounds good, I'll chose myself a few funds and post them up to check I'm on the right track but whatever happens I'm opening an ISA by Monday

Ryan_Futuristics

ChopperST wrote: »

That's all you are doing as well though with CAPE valuations? I would imagine Greece and Russia are looking good at the current point in time, are you investing there?

Not exactly

If you think back to quantum physics: you can never predict where something will be, but you can predict exactly how likely it is to be there

A CAPE ratio (for example) isn't a prediction; but it does give you a probability ... Buffett made his $billions only on probabilities (not predictions)


EDIT:

I'm slightly overweight Russia, but good valuation includes momentum, and diversifies - don't catch a falling knife ... Best buys at the moment look to be Korea, China, Singapore, Italy ... Greece could make you 10% in a day right now, but could also halve your investment pretty sharply too

Ryan_Futuristics

Chris75 wrote: »

Isn't the whole of the market based on predictions? We just don't all share the same expectations which results in the market.

I prefer the term probabilities

You could say they're the same thing, but when the market makes a prediction, it's often proven wise to go against it

If you're going to go against a probability, you better be certain

Chris75

This is semantics - I think that we mean the same thing.


I wish that I could calculate probabilities in a way that made them more accurate than my predictions which are a combination of the weighted probabilities that I am aware of with a margin for error based on uncertainties.


Some have called this rigorous process a guess.

Ryan_Futuristics

Well before I incur the wraith of the forum elders for thread derailing, I think CAPE is a great starting point (that you're probably more than familiar with)

Connection CAPE vs. Real Returns of the 15 Following Years (p.a.)


Current market valuations
http://www.starcapital.de/research/stockmarketvaluation?SortBy=Shiller_PE

And it seems it can be improved when you add a non-cyclical valuation factor in there (such as Price-Sales or Price-Cost)


The *prediction* is whether you think the US is really going to be able to keep valuations so high indefinitely ... I guess it's whether you believe QE's doing what it says it'll do on the box ... or whether you think it's just making things expensive ... And that's the kind of prediction people have generally had less success with

noggin1980

Ok, I've had a go for a couple of hours. A little constructive criticism would be appreciated please. All these seem to be available on Charles Stanley

Vanguard FTSE All Share Index Fund Acc (VVFUSI) - 0.08% - 15%
Vanguard FTSE Dvp Wld Ex UK Equity Index Fund Acc (VVDVWE) - 0.15% - 35%
Vanguard Emerging Markets Stock Index Fund GBP Acc (VIEMKT) - 0.27% - 10%
Vanguard Global Small-Cap Index Fund GBP Acc (VIGSCA) - 0.38% - 10%
Vanguard UK Government Bond Index Fund GBP Acc (VIUKGO) - 0.15% - 20%

That leaves 10% left over for something more fun, perhaps something like Green Energy? I feel like the future will be in green energy, robotics, space, biotech. is there anything like that I can play with?

Should I not be having developed world and instead taking europe/us/japan etc separately? my 1 fund is suddenly becoming alot then

Thanks.