Why doesn't everyone just buy Vanguard LifeStrategy?
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OP here.
Go out and buy yourselves some Vanguard LifeStrategy and you'll all feel better!
Honestly I wouldn't, I don't want to touch bonds, I am 6 years away from retirement, and the retirement portfolio that I am currently working towards is:
45% shares (excl VCT, approx 13% REIT incl)
25% fixed pension (DB and state, might be able to get up to 25%)
20% investment property
4% cash (regular savers/NSI cert/some savings acc)
4% P2P (possibly)
2% VCT (possibly)
Although I think my fixed pension is an ideal replacement for bonds (but without the risk).Chuck Norris can kill two stones with one birdThe only time Chuck Norris was wrong was when he thought he had made a mistakeChuck Norris puts the "laughter" in "manslaughter".I've started running again, after several injuries had forced me to stop0 -
chucknorris wrote: »Honestly I wouldn't, I don't want to touch bonds, I am 6 years away from retirement, and the retirement portfolio that I am currently working towards is:
45% shares (excl VCT, approx 13% REIT incl)
25% fixed pension (DB and state, might be able to get up to 25%)
20% investment property
4% cash (regular savers/NSI cert/some savings acc)
4% P2P (possibly)
2% VCT (possibly)
Although I think my fixed pension is an ideal replacement for bonds (but without the risk).
We've had an IFA (dunstonh) on this thread say that bonds are an important component.0 -
My point was, and is, that you're generalising by extrapolating some people's behaviour and citing it as the norm. Of course I'm not saying that nobody fits your description, just highlighting that it's invalid to suggest that everyone does, or even that most do.
You know what the average wage is. You know what % the IFS says people spend on rent with that wage.
I lived and worked in London for 20 years. I don't need a study to inform me how expensive it is to go out 1-4 times a week. If you think it's it's not hundreds of pounds a month, or that not many people do it, good luck to you.
In my experience, spending that much money is the norm until people settle down or leave London (which they tend to do by the age of about 40).
I was blissfully ignorant of how much money I was spending on socialising for many years.0 -
We've had an IFA (dunstonh) on this thread say that bonds are an important component.
I know, but no disrespect to dunstonh (in fact, I have massive respect for him), but he is talking generally, and I don't personally buy into his reasoning, because 25% of my portfolio is fixed pension (mostly DB) which is virtually the equivalent of an index linked bond, but even better, because it has far less risks.
It is beneficial to listen to the opinion of others, but at the end of the day, you have to take responsibility for your won future, and he happy and comfortable with your decisions and the logic of why you made them.
If someone argued that as I get older that I should have a larger holding than 25% in bonds, my response would be that I am happier taking on a bit more risk, than I am accepting an asset that pays less than the rate of inflation, and it will because I will be a higher rate tax payer for most of my pension years. Although it may be in a decade or so the situation will have changed (with regard to bonds).Chuck Norris can kill two stones with one birdThe only time Chuck Norris was wrong was when he thought he had made a mistakeChuck Norris puts the "laughter" in "manslaughter".I've started running again, after several injuries had forced me to stop0 -
chucknorris wrote: »I know, but no disrespect to dunstonh (in fact, I have massive respect for him), but he is talking generally, and I don't personally buy into his reasoning, because 25% of my portfolio is fixed pension (mostly DB) which is virtually the equivalent of an index linked bond, but even better, because it has far less risks.
You've got to take a holistic approach to asset allocation. If you have enough income from a DB pension to cover your in come needs then you could go 100% equities because you can afford the risk of losing lots of money; alternatively you could go 100% bonds if you want to preserve capital because you don't need any more income.
Generally bonds are going to dampen volatility in a portfolio and can help through stock market swings. They are reliable income sources and an allocation to short term bonds is a good place to put a couple of years money that you might use instead of selling equities at a loss in a bad market.“So we beat on, boats against the current, borne back ceaselessly into the past.”0 -
I have offered evidence. I have proved an IFS report and quoted the London average wage figures. I'm not going to poll men about peeing on toilet seats, but I notice nobody is disputing me on that.
I'm not interested in the average London wage. That's easy enough to check. It was the condescending tone of your first paragraph, accusing most others of stupidity and antisocial behaviour. If you're not going to poll men about peeing on toilet seats (very wise) don't make haughty claims then demand that others disprove them."I don't mind if a chap talks rot. But I really must draw the line at utter rot." - PG Wodehouse0 -
bostonerimus wrote: »You've got to take a holistic approach to asset allocation. If you have enough income from a DB pension to cover your in come needs then you could go 100% equities because you can afford the risk of losing lots of money; alternatively you could go 100% bonds if you want to preserve capital because you don't need any more income.
Generally bonds are going to dampen volatility in a portfolio and can help through stock market swings. They are reliable income sources and an allocation to short term bonds is a good place to put a couple of years money that you might use instead of selling equities at a loss in a bad market.
I'm not interested in an asset that guarantees to lose money, my approach is extremely unlikely to change. I would much rather take on some risk, and at least give myself a chance of a reasonable return, than settle for a certain loss.Chuck Norris can kill two stones with one birdThe only time Chuck Norris was wrong was when he thought he had made a mistakeChuck Norris puts the "laughter" in "manslaughter".I've started running again, after several injuries had forced me to stop0 -
bostonerimus wrote: »You've got to take a holistic approach to asset allocation. If you have enough income from a DB pension to cover your in come needs then you could go 100% equities because you can afford the risk of losing lots of money; alternatively you could go 100% bonds if you want to preserve capital because you don't need any more income.
Generally bonds are going to dampen volatility in a portfolio and can help through stock market swings. They are reliable income sources and an allocation to short term bonds is a good place to put a couple of years money that you might use instead of selling equities at a loss in a bad market.
Absolutely agreed but be sure to pick the bonds carefully, get that part wrong and they'll act as a drag on performance and wont provide the insurance most people need. The alternatives? 100% equities forever or cash, both approaches guaranteed to loose money over time.0 -
chucknorris wrote: »I'm not interested in an asset that guarantees to lose money, my approach is extremely unlikely to change. I would much rather take on some risk, and at least give myself a chance of a reasonable return, than settle for a certain loss.
Even under current circumstances, the risk in holding gilts and similar very safe bonds isn’t quite as high as you imply. If you buy bonds directly and hold to maturity the net result in general should be a very small profit matching prevailing interest rates, the drop in capital value being offset by reinvested interest, This is the calculation that determines the price of the bond.0 -
chiang_mai wrote: »Absolutely agreed but be sure to pick the bonds carefully, get that part wrong and they'll act as a drag on performance and wont provide the insurance most people need. The alternatives? 100% equities forever or cash, both approaches guaranteed to loose money over time.
I don’t understand. Why would holding 100% equities forever be guaranteed to lose money over time?0
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