Passive Investing

stphnstevey

I have had a H&L S&S ISA and SIPP and have dabbled with some funds with my gains cancelling out my losses and breaking even

I would like something that is quite passive and doesn't take much maintenance for a reasonable gain (capital preferred, but income would be ok)

I like the look of the Vanguard LifeStrategy Fund and generally would be interested in trackers

Any help welcome!

ColdIron

You could make a start and use the search function to find gazillions of threads and posts on Vanguard LifeStrategy. Do you have any specific questions?

Audaxer

There are 5 Vanguard LifeStrategy funds with different percentages of equities and bonds for different risk tolerances. The funds with the greater percentage of equities will be the most volatile but should produce better long term gains. Other popular low cost multi asset funds consisting of passive indexes include HSBC Global Strategy range of funds and the L&G Multi Index range. The yields are relatively low on all these multi asset funds as they are more focussed on growth than income.

Tom99

[FONT=Verdana, sans-serif]I think bonds are going to fall in value over the next few years so I would split my investment between equities and cash rather than the so called safer option of equities and bonds which I think most of the LifeStrategy type invest in.[/FONT]

stphnstevey

I have read that some people recommend just the S&P 500 (including Warren Buffet to his wife) rather than a global tracker due to the S&P 500 higher performance, but still staying fairly diversified

bowlhead99

stphnstevey wrote: »

I have read that some people recommend just the S&P 500 (including Warren Buffet to his wife) rather than a global tracker due to the S&P 500 higher performance, but still staying fairly diversified

Warren Buffet's wife is living in the US (spending the same currency as the one in which the SP500 constituents make most of their profits) and has enough assets to never run out of money ever, no matter how the US index performs.

For those of us whose lives are not so US-centric, we invest globally.

"Some people" recommend just the S&P because it is cheap and easy for them to invest in, but those people are likely to be US -based and blinkered to the opportunities in the outside world.

You certainly can't say that the S&P 500 will have higher performance than the average of the rest of the world over the next few decades from now. For much of the twentieth century the US stockmarket , despite being the largest in the world, had characteristics of 'emerging markets' as the market matured and investors demanded high returns for the risks. Today, other places are the emerging markets.

Given you don't know what will happen to UK vs US currency rates and you don't know what the relative performance will be between all the different countries in the world over the coming decades, you should probably buy a fund that invests in all the different countries in the world rather than gambling on putting all your investible money into the USA stock exchanges.

economic

bowlhead99 wrote: »

Warren Buffet's wife is living in the US (spending the same currency as the one in which the SP500 constituents make most of their profits) and has enough assets to never run out of money ever, no matter how the US index performs.

For those of us whose lives are not so US-centric, we invest globally.

"Some people" recommend just the S&P because it is cheap and easy for them to invest in, but those people are likely to be US -based and blinkered to the opportunities in the outside world.

You certainly can't say that the S&P 500 will have higher performance than the average of the rest of the world over the next few decades from now. For much of the twentieth century the US stockmarket , despite being the largest in the world, had characteristics of 'emerging markets' as the market matured and investors demanded high returns for the risks. Today, other places are the emerging markets.

Given you don't know what will happen to UK vs US currency rates and you don't know what the relative performance will be between all the different countries in the world over the coming decades, you should probably buy a fund that invests in all the different countries in the world rather than gambling on putting all your investible money into the USA stock exchanges.

75% of my equities portfolio is in US stocks. I don’t think I’m gambling. I’m just investing according to my views on the markets. The US has many great companies compared to the rest of the world. Long term imo the US will outperform. You make your own luck in life and I’ve positioned myself accordingly to hopefully take advantage in what I believe in.

I also strongly believe that diversification such as a VLS100 fund is for dummies.

bowlhead99

economic wrote: »

75% of my equities portfolio is in US stocks. I don`t think I`m gambling. I`m just investing according to my views on the markets. The US has many great companies compared to the rest of the world. Long term imo the US will outperform. You make your own luck in life and I`ve positioned myself accordingly to hopefully take advantage in what I believe in.

I also strongly believe that diversification such as a VLS100 fund is for dummies.

I agree if you have strong views on the markets then feel free to follow your convictions and tell the people who invest in a bit of everything that they are dummies.

However, even though you have a strong conviction to the US, you don't actually invest all your money in a S&P500 tracker ; you don't even invest all your money in US stocks. Plus, like Warren Buffett's wife, you have higher than average wealth, so a strong conviction-led approach might be more suitable for you than for someone of more modest means who can't afford the higher volatility of being heavy in one particular market.

It may well suit the OP to keep it simple with an 'investment for dummies' approach. He has had his HL ISA and SIPP and been picking his funds for a decade, over which very strong returns have been made from all sectors after an early blip.

As a barometer of world market: in the last five years to Jan 31, the FTSE Global All-Cap equities index has delivered a total return of 73.6% in USD terms or 92.9% in pounds sterling. Yet in the OP's SIPP and ISA he has "dabbled with some funds with my gains cancelling out my losses and breaking even".

So it would seem that the OP as a relative newbie should start off by having a core of investment that is broadly spread across asset classes, regions and industry sectors, and aligned with the risk/volatility level they can handle. Rather than predicting which market will be 'best'.

The reason I say OP has been doing it for a decade without great success (despite him not mentioning timescales in his first post) is because when he was last starting a thread about fund choices it was five years ago and at that point he had been picking his own funds for the last five years or so. He didn't persevere much with that thread - not making any further posts after starting it to ask questions on the comments received or bump for more responses - but on later threads he mentioned having 30 or so funds. There is a compelling argument to replace the whole lot with one or two mixed asset funds and KIS,S.

economic

bowlhead99 wrote: »

I agree if you have strong views on the markets then feel free to follow your convictions and tell the people who invest in a bit of everything that they are dummies.

However, even though you have a strong conviction to the US, you don't actually invest all your money in a S&P500 tracker ; you don't even invest all your money in US stocks. Plus, like Warren Buffett's wife, you have higher than average wealth, so a strong conviction-led approach might be more suitable for you than for someone of more modest means who can't afford the higher volatility of being heavy in one particular market.

It may well suit the OP to keep it simple with an 'investment for dummies' approach. He has had his HL ISA and SIPP and been picking his funds for a decade, over which very strong returns have been made from all sectors after an early blip.

As a barometer of world market: in the last five years to Jan 31, the FTSE Global All-Cap equities index has delivered a total return of 73.6% in USD terms or 92.9% in pounds sterling. Yet in the OP's SIPP and ISA he has "dabbled with some funds with my gains cancelling out my losses and breaking even".

So it would seem that the OP as a relative newbie should start off by having a core of investment that is broadly spread across asset classes, regions and industry sectors, and aligned with the risk/volatility level they can handle. Rather than predicting which market will be 'best'.

The reason I say OP has been doing it for a decade without great success (despite him not mentioning timescales in his first post) is because when he was last starting a thread about fund choices it was five years ago and at that point he had been picking his own funds for the last five years or so. He didn't persevere much with that thread - not making any further posts after starting it to ask questions on the comments received or bump for more responses - but on later threads he mentioned having 30 or so funds. There is a compelling argument to replace the whole lot with one or two mixed asset funds and KIS,S.

Agree

I remember back in 2010 when I first started investing I was only concerned about dividend paying stocks as I thought they were the best given the income. I had mainly invested in uk supermarkets but other stocks also. Oh how wrong was I!! I learnt my lesson the hard way and got a better understanding how investing works and few years later positioned myself with a much more diversified yet still relatively high conviction portfolio. Overweight US and growth names. I would say I am taking a lot less risk now then I was then.

The thing about investing as a beginner is you are most likely to make mistakes if you don’t seek help and advice soon enough. As long as you quickly learn from mistakes then that’s fine. The danger is not learning from them and not asking for help.

stphnstevey

bowlhead99 wrote: »

I agree if you have strong views on the markets then feel free to follow your convictions and tell the people who invest in a bit of everything that they are dummies.

However, even though you have a strong conviction to the US, you don't actually invest all your money in a S&P500 tracker ; you don't even invest all your money in US stocks. Plus, like Warren Buffett's wife, you have higher than average wealth, so a strong conviction-led approach might be more suitable for you than for someone of more modest means who can't afford the higher volatility of being heavy in one particular market.

It may well suit the OP to keep it simple with an 'investment for dummies' approach. He has had his HL ISA and SIPP and been picking his funds for a decade, over which very strong returns have been made from all sectors after an early blip.

As a barometer of world market: in the last five years to Jan 31, the FTSE Global All-Cap equities index has delivered a total return of 73.6% in USD terms or 92.9% in pounds sterling. Yet in the OP's SIPP and ISA he has "dabbled with some funds with my gains cancelling out my losses and breaking even".

So it would seem that the OP as a relative newbie should start off by having a core of investment that is broadly spread across asset classes, regions and industry sectors, and aligned with the risk/volatility level they can handle. Rather than predicting which market will be 'best'.

The reason I say OP has been doing it for a decade without great success (despite him not mentioning timescales in his first post) is because when he was last starting a thread about fund choices it was five years ago and at that point he had been picking his own funds for the last five years or so. He didn't persevere much with that thread - not making any further posts after starting it to ask questions on the comments received or bump for more responses - but on later threads he mentioned having 30 or so funds. There is a compelling argument to replace the whole lot with one or two mixed asset funds and KIS,S.

Thanks for the forensic analysis of my posts!

I did move away from S&S as I wasn't any good at beating the market (as most people). Also move from MSE, now I come back and everyone has multiple medals, where previously they were a rarity

I am looking for a simple no brainier dummies approach to get back in as some diversity

I have developed into a more sophisticated investor since last venture into S&S. This time spending the time researching and understanding the basics, rather than spending the time trying to "guess" the latest big thing

Audaxer

stphnstevey wrote: »

I am looking for a simple no brainier dummies approach to get back in as some diversity

If that is what you are looking for, you can't go far wrong with a low cost globally diversified multi asset fund with the percentage of equities to suit your risk tolerance. If however you decide to go for a portfolio of single sector actively managed funds, you may get better returns by a couple of percentage points if you have the time, knowledge and experience to manage it well. But you may well get it wrong and end up with a worse performance, so unless you are very confident I would stick with the passive approach.