Need a nudge to take the plunge

noggin1980

Ryan_Futuristics wrote: »

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)

Why not stop before that? there are surely plenty of threads to discuss this sort of thing in. You are just confusing me. Thanks

InvestInPoker

noggin1980 wrote: »

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

You can do this and you will get the fees down even more. Yes more funds and a bit more complicated but over time more money compounding.

However the other thing to think about is if the %s drift out from what you want due to one area out or underperforming your other half might not want to have to rebalance it once a year? VLS in that respect is good because you can "fire and forget".

Personally I would go the multi fund route and keep the fees as low as possible.

noggin1980

InvestInPoker wrote: »

You can do this and you will get the fees down even more. Yes more funds and a bit more complicated but over time more money compounding.

However the other thing to think about is if the %s drift out from what you want due to one area out or underperforming your other half might not want to have to rebalance it once a year? VLS in that respect is good because you can "fire and forget".

Personally I would go the multi fund route and keep the fees as low as possible.

Thanks yeah I'd considered my wife having to rebalance but I think that will be fine, she is smart and I can leave instructions on what to do and on what to do if she wants to move to something that requires less effort still. As it stands she has to work hard and look after me (I'm badly disabled) when I'm gone life will be easier for her even with her taking on the financial stuff and few other things that I'm able to do.

Ryan_Futuristics

noggin1980 wrote: »

Why not stop before that? there are surely plenty of threads to discuss this sort of thing in. You are just confusing me. Thanks

To be honest, because people like you are still turning up here looking to invest in markets we've just *had*

It's common for investors to get in at exactly the wrong time: a) because the markets you're buying into now look appealing because they've been rising smoothly for so long, and b) because all the popular advice now reflects what worked 5 years ago ... But markets are cyclical

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%

Constructive criticism ... ASIA

In 10-15 years time, the developed world will be older (falling birth rates, people living longer) - this means more people to support; fewer people in work ... Developed markets may be as efficient as they're going to get

Whereas in countries like Indonesia, India, the Asia Pacific region, etc. we've got better demographics, rapidly improving education, huge infrastructure investment, huge parts of the population without bank accounts yet - tremendous potential for growth (the kind of growth the US experienced in the 20th century)

The whole global economic balance is moving East

bowlhead99

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

That is why some people go for the fixed proportions chosen by somebody else. You didn't like the proportions of USA that you had in the standard VLS 60. So now you have broken it down more into UK vs rest of world, but are still implicitly getting whatever proportion that USA is of the rest of the world-exUK fund. US will be by far the biggest component of that. If you really want to rip everything up and start again you have to use lots more of these specialist individual regional funds and there is no saying that you will do a better job of it than whoever first suggested the first out-of-the-box ratio.

There is nothing 'wrong' with giving up some of the largecap developed stuff to replace with smallcap and emerging (if you want the extra volatility and hopefully long term gains).

And there is nothing 'wrong' with giving up some of the largecap generalist stuff and replacing it with a tilt towards biotech or cleantech or engineering or space. But that tilt will be way more volatile than the rest of your fund (biotech funds for example can go up by 100%+ or down by 80%+ in a year).

You were originally going for 60% equity 40% bonds with the intention of getting the equity up to 70%. In your current draft version if you add some specialist equity fund to round it off you will be up to 80% equity AND everything that is non equity is UK government bonds rather than a nice mix of UK government bonds, international government bonds, UK investment grade corporate bonds, international investment grade corporate bonds, emerging market government bonds, high yield bonds, etc etc etc etc.

So, you have certainly built a different portfolio. Is it any better? That's in the eye of the beholder, and will become only evident with a healthy dose of hindsight. It is certainly a more aggressive portfolio. I would prefer it to what you started with (if you had something more balanced for the bonds). I like the idea of more emerging and more smallcap, although personally prefer active funds for smallcap and emerging . But very importantly you are not building it for me you are building it for you.

On some level, we really don't care what you do with it, as much as you should.
Enjoy!

InvestInPoker

Ryan_Futuristics wrote: »

because all the popular advice now reflects what worked 5 years ago ... But markets are cyclical

And what were you invested in 5 years ago Ryan? Personally I was in Invesco High Perpetual and some other funds which were high priced and not as good (advised).

noggin1980

Ryan_Futuristics wrote: »

To be honest, because people like you are still turning up here looking to invest in markets we've just *had*

Posting charts on cyclically adjusted cape (whatever that is) in a newbie thread though doesn't educate it confuses to the point of pushing people away.

TheTracker

“One can’t say that figures lie. But figures as used in financial arguments, seem to have the bad habit of expressing a small part of the truth forcibly, and neglecting the other part, as do some people we know.” - Where Are All The Customers' Yachts, Fred Schwed

bowlhead99

Ryan_Futuristics wrote: »

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)

I think it's safe to say that we are more than familiar with it if we ever hung out on MSE forums

I'll just chime in with my perspective, in case you want to research further

Always happy to talk about market valuation

You can never be certain about where something will be in the future, but you can be fairly certain about the probability of it being there

Follow the herd so far and you'll find yourself falling down a cliff-face

I think CAPE is a great starting point (that you're probably more than familiar with)

I'd say yes we are more than familiar with it now thanks. I just did a quick 'advanced search' on your name and found 78 hits on the word CAPE and a healthy 115 on Woodford.

Poor Buffett only got 43 which is less than 10% of your posts so he's probably feeling a little left out
:beer:

Ryan_Futuristics

Well you can lead a horse to water ...

I imagine this is how teachers in our failing public-funded school system feel :rotfl: