HSBC Global & VLS60

bcfclee27

ValiantSon wrote: »

I'd agree that the 60/40 split is sensible one for a medium risk investor and both VLS and HSBC Global Strategy are good funds. Mixing the two also helps with the UK overweighting in VLS (if that concerns you) and gives you more corporate bond exposure if you feel that VLS's bias towards government bonds is a bit overly cautious.

I'm only slightly older and have wrestled with the 60% or 70% equities conundrum. In the end I've settled on 60%, although sometimes still wonder whether I should increase my equities exposure.

If you do want to go for 70% then you could actually mix versions of the funds, e.g. in VLS you could go for half of your investment in 60 and half in 80.

Yeah good point thanks.

It's the HSBC one that intrigues me, the balanced is 55% equity with the Dynamic at 80%.

Audaxer

bcfclee27 wrote: »

Yeah good point thanks.

It's the HSBC one that intrigues me, the balanced is 55% equity with the Dynamic at 80%.

The HSBC GS Balanced was 63% equities the last time I looked.

Prism

bostonerimus wrote: »

Debatable


Correct. 60/40 has been a good balance of risk and reward in previous markets. The OP has settled on some sensible funds and whatever they do it will be ok. There will be some times when their choice will be validated and others when they will question it. There's no right or wrong path to follow, just your own path.

Of course its debatable

My belief is that holding bonds for a 15-20 year investment which is the OPs desire is a sure way of making less money than you would without bonds. Especially when starting from a position where bonds expensive. The only real thing stopping people going all in equities is the lack of trust in themselves to not sell in a crash. Bonds are for short term wealth preservation not long term growth.

My advice. 100% equities. Train yourself to have disipline (or don't look!). Reconsider for the last 5 years.

Alexland

OP - as you can see on this forum we have a full range of suggestions for your situation from 60% up to 100%. Only you will know what you feel comfortable with in terms of risk for potential reward. You might also want to consider your strategy for de-risking the investment as withdrawal date approaches.

Vanguard are pretty pessimistic on future returns at the moment. I get the feeling that a lot of the future cake has already been consumed in advance.

https://www.vanguardinvestor.co.uk/articles/latest-thoughts/markets-economy/why-investors-prepare-for-lower-returns

Audaxer

Prism wrote: »

Of course its debatable

My belief is that holding bonds for a 15-20 year investment which is the OPs desire is a sure way of making less money than you would without bonds. Especially when starting from a position where bonds expensive. The only real thing stopping people going all in equities is the lack of trust in themselves to not sell in a crash. Bonds are for short term wealth preservation not long term growth.

My advice. 100% equities. Train yourself to have disipline (or don't look!). Reconsider for the last 5 years.

Most people do not have the risk tolerance for 100% equities. I'm sure a respected IFA on here recently said that he had no clients with 100% equity portfolios.

bostonerimus

Owning 100% stock through the 1970s and 2000s gave worse return than 100% bonds (using broad US indexes). Of course the other recent decades would have seen the best returns from 100% equities. I can't find the numbers, but I bet 100% equities from 1970 to 2010 would have been pretty rough. Of course you could pick many other time spans and do really well. Moderation is probably best for most people, so some equities and some cash and bonds to keep their blood pressure down.

ValiantSon

bcfclee27 wrote: »

Yeah good point thanks.

It's the HSBC one that intrigues me, the balanced is 55% equity with the Dynamic at 80%.

Fair enough. You can, of course, still do the same kind of thing with the HSBC funds.

ValiantSon

Prism wrote: »

Of course its debatable

My belief is that holding bonds for a 15-20 year investment which is the OPs desire is a sure way of making less money than you would without bonds. Especially when starting from a position where bonds expensive. The only real thing stopping people going all in equities is the lack of trust in themselves to not sell in a crash. Bonds are for short term wealth preservation not long term growth.

My advice. 100% equities. Train yourself to have disipline (or don't look!). Reconsider for the last 5 years.

Very high risk strategy and well beyond the comfort level of most investors. If it suits you then great, but I wouldn't be advising someone fairly new to investing to be going down that road unless they were absolutely certain about their risk tolerance.

cjv

I opened my first pension recently, a SIPP with Cavendish and split my contributions 50/50 between HSBC Global Dynamic and VLS80. Although I only know the very basics of investing I feel this is a simple, diversified approach for my risk tolerance.

I am 36, so will look to reduce my risk later in life. Just thought I would post my similar situation, as I am around your age.

Echo considering holding them in a SIPP if possible, unless you need access to your investment, it is worth considering.

Prism

Audaxer wrote: »

Most people do not have the risk tolerance for 100% equities. I'm sure a respected IFA on here recently said that he had no clients with 100% equity portfolios.

I agree, I'm sure most people do not have 100% equities but that's in part due to the fact that most people now have a pension have absolutely no idea what it is invested in. They either get put in a default 60/40 fund or when asked what their risk level is guess and choose 'middle risk' or its equivalent without considered really what that means. I didnt even know who my pension was with for the first 10 years (I would open the yearly letter, see some number that meant nothing to me and file it away). I don't imagine I am the exception.

Now an ISA probably requires a bit more will power as its easier to do something like withdraw all of your money on the way down. But if you really are invested for the long term and can trust yourself not to bail out at the bottom, then there are very few scenarios where equities don't beat bonds.