Diversifying portfolio & gaining knowledge - advice for a beginner?

bigadaj

JustAnotherSaver wrote: »

This is the problem when you go searching through peoples previous posts & assuming.

I ask a lot of questions, so don't assume ... ask.

The money i have in the VLS100 fund is for something totally different to the £20k. If you assumed it was for the same thing then that's probably why it didn't make sense to you. I never said they were for the same thing - because they're not. They were in separate threads - because they're separate.

Though they are never totally separate, your whole financial situation has a bearing on each element.

You may well have multiple pots for different purposes, from cash to isas, pensions, unwrapped equities, p2p, maybe property etc etc, but your holdings in one area are quite likely to affect those in other areas, for good and bad.

Audaxer

JustAnotherSaver wrote: »

This is the problem when you go searching through peoples previous posts & assuming.

I ask a lot of questions, so don't assume ... ask.

The money i have in the VLS100 fund is for something totally different to the £20k. If you assumed it was for the same thing then that's probably why it didn't make sense to you. I never said they were for the same thing - because they're not. They were in separate threads - because they're separate.

I was feeling sorry for you when you said some people get narky with you for asking questions, then I read the above and find that you are getting narky with me!! I didn't go searching through your previous posts and started assuming anything ... I remember you posting that you were looking for a low risk investment and was just surprised that you were now investing in a VLS100. All you needed to do was clarify it was for something different rather than having a go. I thought I was being helpful suggesting if you diversify further you should maybe consider low risk options like bonds.

bigadaj

JustAnotherSaver wrote: »

Do you think this is a big problem of going DIY? That what people think of themselves (their attitude to risk) can be a world away from their own reality?

Going for the VLS100 myself i am currently happy with my decision. In 10 years time maybe i will be maybe i wont.

Maybe if i'd gone for say VLS60 i'd be wondering if i should've gone higher or lower too. That's the problem when you don't have the answer i suppose.

Anecdotally then diy investors are far higher up the risk scale than those using advisers. There no doubt various reasons for that, from being straight gung Ho, to potentially better knowledge (not necessarily true) to different age profiles or expectations.

What and how you invest will depend on other assets as well, more risk in one area can be counter balanced by cash or lower risk elsewhere.

Vls100 is quite extreme on the risk scale, I hold some vls80 and my overall equity exposure is a fair bit lower than that, people have been lulled into a false sense of security by continuously rising markets, it's ine thing saying drops don't bother me but seeing £100k or more wiped off your nominal wealth is enough to make many panic.

JustAnotherSaver

Audaxer wrote: »

I was feeling sorry for you when you said some people get narky with you for asking questions, then I read the above and find that you are getting narky with me!! I didn't go searching through your previous posts and started assuming anything ... I remember you posting that you were looking for a low risk investment and was just surprised that you were now investing in a VLS100. All you needed to do was clarify it was for something different rather than having a go. I thought I was being helpful suggesting if you diversify further you should maybe consider low risk options like bonds.

That's the problem with words on a screen rather than face to face conversation - people often get the wrong end of the stick and assume people are being funny about something when they're not.

I was just saying that it was a common issue I've seen on this board when others go looking for posts like that and that in this case they are not connected.

I also frequently post on this board on behalf of other people when they've asked me questions and I don't know the answer - so I come here and ask for them. Just trying to be helpful. So when I say the £20k is separate to my VLS100 I really do mean it's separate - because it's not even my £20k.

Like with the last post no upset is meant with this one, just trying to clear things up.

justme111

Sorry my last night post turned out to be gibberish, it has been written in about 5 starts and stops while getting distracted with offline life

JustAnotherSaver

No worries

I ordered the 3rd edition of that book last night. £16something. Hopefully I can pick up something from it at least.

Out of curiosity, is there any point in putting money into one VLS and then another?
For example I have £9k in VLS 100 as part of my retirement.
For examples sake (I stress again: example) if I decided maybe VLS100 was too high, let's try VLS60, leave the contributions in VLS100 but all future contributions in VLS60, is there any point to that, does anyone here run 2 VLS for the same purpose (I.e. Retirement)?

Ed_Zep

Just keep it simple.

Warren Buffett recently:

"The trick is not to pick the right company, the trick is to essentially buy all the big companies through the S&P 500 and to do it consistently and to do it in a very, very low cost way," he added.

Buffett points to the fee savings built into low-cost index funds. The largest such S&P 500 fund, Vanguard's 500 Index Fund, boasts expense ratios of less than a percentage point.

"Costs really matter in investments," said Buffett, who in the past has taken aim at costly funds. "If returns are going to be seven or eight percent and you're paying one percent for fees that makes an enormous difference in how much money you're going to have in retirement."

He mentions just one index.

The Vanguard VLS100 invests in the S&P500 but also a lot of other indexes.

justme111

I supose if you decide that 60/40 split is the right one than there is no point in keeping 100 pot , you sell it and buy 60/40. How are platform charges structured may play part as well , if you charged per holding it will be more expensive to keep 2 of them plus unnecessary paperwork.

AlanP_2

Ed_Zep wrote: »

Just keep it simple.

Warren Buffett recently:

"The trick is not to pick the right company, the trick is to essentially buy all the big companies through the S&P 500 and to do it consistently and to do it in a very, very low cost way," he added.

Buffett points to the fee savings built into low-cost index funds. The largest such S&P 500 fund, Vanguard's 500 Index Fund, boasts expense ratios of less than a percentage point.

"Costs really matter in investments," said Buffett, who in the past has taken aim at costly funds. "If returns are going to be seven or eight percent and you're paying one percent for fees that makes an enormous difference in how much money you're going to have in retirement."

That's why I bought Vanguard VLS100.

Just for those who may read this at a later date, or as part of their first investigation into "what should I invest in" - VLS100 is a very different beast to a S&P 500 Tracker.

VLS100, as do all the VLS range, provides a broad global spread which will include all of those in the S&P 500 plus many more.

Investing in just 1 Index, in just 1 of the world economies is not a sensible, diversified approach (unless you are the US possibly).

If a UK investor went 100% into the S&P 500 the £:$ Exchange Rate could well have more impact on returns than the movement of the underlying Index.

Ed_Zep

You're right. It was a hastily edited reply which I will re-edit but my point about indexing is valid.