Vanguard Life Strategy Fund: Good choice?

dunstonh

Lungboy wrote: »

HSBC Global Strategy Dynamic fits those criteria, although VLS100 beats Dynamic on return but not cost.

Dynamic doesnt match up against VLS100 in risk. In fairness, only one in the range matches up as comparable. VLS60 and Balanced.

You could argue if you wanted real fine tuning you could use both fund houses to and line their funds up covering different asset weightings.

Equally, you can argue that the differences of VLS60 and Balanced are so small that either fits the job. I suspect over time, they will take it turns on the returns side but the differences will be insignificant. Hence the focus on charges. When you have two things virtually the same and no other differentiators, going with the lower cost wins.

FB13

cogito wrote: »

That's why I would never buy such a fund. You end up owning good, mediocre and poor companies. I'd rather pay a higher fee to a top fund manager such as Nick Train or Terry Smith. But for someone new to investing or doesn't have time to do their own research, an index tracker is OK.

And the Bogleheads would turn around and tell you that Nick Train or Terry Smith are ok for someone new to investing or doesn't have time to do their own research to know that they are almost inevitably worse off over the long term by investing with active managers.

Prism

FB13 wrote: »

And the Bogleheads would turn around and tell you that Nick Train or Terry Smith are ok for someone new to investing or doesn't have time to do their own research to know that they are almost inevitably worse off over the long term by investing with active managers.

Glad I never found out about Bogleheads earlier than as I would be much worse off

All the options mentioned above posts are good in general. Funds like VLS certainly keep it simple. Certainly easier for someone new to it than trying to work out out which active managers are decent and are worth their fees.

bostonerimus

dunstonh wrote: »

Equally, you can argue that the differences of VLS60 and Balanced are so small that either fits the job. I suspect over time, they will take it turns on the returns side but the differences will be insignificant. Hence the focus on charges. When you have two things virtually the same and no other differentiators, going with the lower cost wins.

Find few a multi-asset funds that have asset allocations that you think are sensible and that match your circumstances. Then buy the least expensive one......make sure you include both fund and platform fees. However, do not buy any fund be it mult-asset, tracker or active until you understand the basics of investing, why it's a good fit for you and what you will do when it either gains or loses value.

bostonerimus

Prism wrote: »

Glad I never found out about Bogleheads earlier than as I would be much worse off

All the options mentioned above posts are good in general. Funds like VLS certainly keep it simple. Certainly easier for someone new to it than trying to work out out which active managers are decent and are worth their fees.

If you've owned something like Fundsmith instead of say VLS100 for the past 5 years I imagine that's true. But being a Boglehead does not mean you just buy VLS100 or do no research to come up with a portfolio, it does generally mean low costs and portfolio turnover.

I can't resist answering that one.........there is a small set of successful active managers which changes constantly and researching them can equally well be done with either lots of numerical analysis or a blindfold and throwing a dart.

dutchcloggie

Ok. So that very quickly turned into language I don't understand. I must say that I am sad that so many people assume folks like me are "not prepared to do their own research". As if I am lazy and don't deserve a good return on my investment.

I am trying to do research. But I simply don't understand what I am reading. Funds? Equity? What's the difference between stocks and shares etc etc. It feels to me like I am trying to read a book in a foreign language. It doesn't matter how many times I read it, if I don't speak the language, I will never understand what I am looking at. Giving someone a dictionary is not the same as learning a language.

So, I am merely asking if Vanguard would be a good start for me to learn a new language. I am a person to whom abstract things make no sense. So I need to start and learn whilst doing. To SEE what is happening. That is how my brain works. I'm happy that many people are able to understand things just by reading about them but I'm not like that. I speak 4 languages but none of them were learned by reading books. I just started speaking and learned what I did right and what I did wrong along the way. Hence I want a low-key, low risk thing to start with until I have a basic grasp of the language of investing.

Another example would be someone who can't drive is asking for advice in a good car for a learner driver. People would say: start cheap until you are in control of the car and have good driving skills, then look at a more powerful car. Only fools would say they should buy a Ferrari straight away because it is the obviously superior car...For me, this works like that.

Thanks for the advice you guys have given me so far.

bostonerimus

dutchcloggie wrote: »

So, I am merely asking if Vanguard would be a good start for me to learn a new language. I am a person to whom abstract things make no sense. So I need to start and learn whilst doing. To SEE what is happening. That is how my brain works. I'm happy that many people are able to understand things just by reading about them but I'm not like that. I speak 4 languages but none of them were learned by reading books. I just started speaking and learned what I did right and what I did wrong along the way. Hence I want a low-key, low risk thing to start with until I have a basic grasp of the language of investing.

Another example would be someone who can't drive is asking for advice in a good car for a learner driver. People would say: start cheap until you are in control of the car and have good driving skills, then look at a more powerful car. Only fools would say they should buy a Ferrari straight away because it is the obviously superior car...For me, this works like that.

Thanks for the advice you guys have given me so far.

FYI you buy a "share of stock"...a share is exactly what it sounds like it's your part of something, in this case a company etc.

Now to what you should know. To use your car analogy it's good to know that there's a steering wheel and what it does before you start to drive.......so make sure you understand what you are going to do before you do it. If you can't do that then as with a car pay for an instructor or an IFA "chauffeur". Investing is considerably easier than driving a car, and you can learn the basics that will stop you from crashing quite easily, but you should learn them before you start.

If we take the car analogy further the mult-asset fund is like a Toyota Carolla in that it will get you cheaply and steadily to your destination with out too much fuss. Some active funds are like Ferraris, they might get you somewhere quickly with a lot of excitement, but they are expensive and if you crash it will be a disaster.

Thrugelmir

bostonerimus wrote: »

If we take the car analogy further the mult-asset fund is like a Toyota Carolla in that it will get you cheaply and steadily to your destination with out too much fuss. Some active funds are like Ferraris, they might get you somewhere quickly with a lot of excitement, but they are expensive and if you crash it will be a disaster.

When too many people get inside the Toyota Carolla then it'll become increasingly difficult to drive. Other than in a straight line. Then the McClaren will come into it's own. The ability to be nimble will turn the world upside down again.

Investors are like buffalo. They instinctively herd together, safety in numbers. When there's a pride of lions in the vinicity. The stampede for the exits causes carnage.

FB13

dutchcloggie wrote: »

I am trying to do research. But I simply don't understand what I am reading. Funds? Equity? What's the difference between stocks and shares etc etc. It feels to me like I am trying to read a book in a foreign language. It doesn't matter how many times I read it, if I don't speak the language, I will never understand what I am looking at. Giving someone a dictionary is not the same as learning a language.

Thanks for the advice you guys have given me so far.

Investopedia has a decent dictionary for looking up terms you don't know.
https://www.investopedia.com/dictionary

Setting aside my snarkiness in pointing out the unsophistication of those picking actively managed funds, a simple portfolio of low cost index fund(s) is actually a smarter way to invest than what most people do in this country. Even as you learn more, you may very well want to stick with that.

If you want low risk (as in the chance the market will be down) to start, picking a fund with a higher percentage of bonds is considered less risky. The lifestrategy fund with 40% stocks is less risky than the 80% one for example.

While it sounds like this might be a little too advanced for you for now, this page has a lot of basic but good advice.
https://www.bogleheads.org/wiki/Bogleheads®_investment_philosophy

C_Mababejive

dutchcloggie- There are many people who are far from expert on these matters and I am one of them.

We are fortunate to have some very knowledgeable people on here who are prepared to share their expertise and thoughts with us and so gradually, bit by bit,we learn more and more.

So to keep it simple, VLS and similar are very diversified. This limits risk and hopefully smooths out volatility. They are also low cost trackers. The received wisdom is that they are great for many,dare i say most private investors. Many other investors like to research and specialise.

I personally dont have the time,expertise and risk profile for that.

I therefore am more nd more moving single share holdings into more widely diversified vehicles. At the moment this is exclusively investment trusts but it may include funds(oeics) like VLS or similar..