Vanguard Direct site - which fund in case of stock market crash?

A_T

ValiantSon wrote: »

Well, initially I was correcting an implicit error that you made by suggesting that LifeStrategy funds were full of corporate bonds and that you would be better with government bonds, so my point still stands.

Where did I say they were "full" of corporate bonds? I said they had a "large proportion" which is not the same thing at all. There was no error to correct.

A_T

ValiantSon wrote: »

It is also not a fact that corporate bonds will fall in line with falls in the value of equities. This may happen, but it may not.

If there is an equity crash it's almost certain corporate bonds will too. Treasuries will go up.

ValiantSon

A_T wrote: »

Where did I say they were "full" of corporate bonds? I said they had a "large proportion" which is not the same thing at all. There was no error to correct.

Your error was implicit. If you can't see that then I can't help you.

davieg11

Back to the OP. I'm relatively new to investing and I'm way above my risk profile in equities. My portfolio has went up 9% in the last 3 months and when I asked my IFA about it, he replied with this. "And yes there is plenty of talk about the downturn but also dangerous trying to gamble with how the markets will go and whether to disinvest into cash and wait for it to happen. Probably not a good idea."

A_T

ValiantSon wrote: »

Your error was implicit. If you can't see that then I can't help you.

You inferred. It wasn't implicit. And you're right you can't help me.

username12345678

ValiantSon wrote: »

Your error was implicit. If you can't see that then I can't help you.

Why was the error implicit?

If you look at VLS20 for example the bond element has around 60% at AAA/AA and 40% at A/BBB.

funguy

davieg11 wrote: »

Back to the OP. I'm relatively new to investing and I'm way above my risk profile in equities. My portfolio has went up 9% in the last 3 months and when I asked my IFA about it, he replied with this. "And yes there is plenty of talk about the downturn but also dangerous trying to gamble with how the markets will go and whether to disinvest into cash and wait for it to happen. Probably not a good idea."

Thank you all for your advice.... If we think there is a likely downturn due in the next 1-2 years and you are invested in say VLS80 for the next 20y, would anyone rebalance down to say VLS60 or 40 for the next couple of years with a view to investing more at any drop point? Or would people stay invested in VLS80 and ride out any drops...

Im really thinking aloud - I understand my level of risk, long term investing etc...just looking for people's opinions...:)

Thrugelmir

By switching funds you are attempting to second guess the market, i.e. time the peaks and troughs. The old adage is that time in the market is better than trying to time the market. With a 20 year time horizon you'd be better deciding on your risk tolerance and sticking with the same fund. Let the fund manger make the decisions. As it's the underlying performance of the investments that really matters. Not the market indices.

AnotherJoe

funguy wrote: »

Thank you all for your advice.... If we think there is a likely downturn due in the next 1-2 years and you are invested in say VLS80 for the next 20y, would anyone rebalance down to say VLS60 or 40 for the next couple of years with a view to investing more at any drop point? .

Anyone? For sure. I wouldn't. Been there done that, lost money doing it. Realised I'm not clever enough to know when the dips and rises will be in the short to medium term.

funguy wrote: »

Im really thinking aloud - I understand my level of risk, long term investing etc...just looking for people's opinions...:)

Are you sure? If you were i dont think you'd be looking to try and time the market.

bostonerimus

A_T wrote: »

Like the majority of multi-asset funds Vanguard's UK Lifestrategy funds are untested in a stock market crash. They contain a large proportion of corporate bond funds - such funds crashed along with equity funds in the credit crunch. Gilt funds went up at that time.

I held a roughly 60/40 allocation in a couple of equity and bond index funds from 1987 to 2014 and that took me through several crashes and has given an 8.5% annual average return.