Worst average return on 60% equity portfolio over the next 20 years?

Thrugelmir

rathernot wrote: »

This is what I'm trying to work out - is there actually any safe haven other than cash if there's a downturn?

Hence why Gilts are still in demand from institutional investors. Better a guaranteed return than none at all.

Audaxer

Thrugelmir wrote: »

Correlation has all but disappeared. What do you regard as bonds? The original scenarios were based on US Treasuries. Yields on Gilts are currently extremely low. Blue chip corporate bonds only offer 2.5% to 3%. Little different to the rate of inflation. Investors have little choice but to go for equities. Therein lies the conundrum. Portfolios are exposed to a high degree of risk. At a time in life when this may not be the option desired.

As bonds look so poor at the moment, and I'm not really sure if there is a benefit from absolute return funds either as defensive assets, maybe cash is the best option.

So if you wanted to go passive with a 60% equities portfolio of £100k, maybe it would be better investing £60k in a VLS100 with the other £40k in the best cash rates you could get. The cash would be have to be held outside the S&S ISA, but you could rebalance once a year back to a 60/40 split using part of your ISA allowance if you had to top the equities back up to 60%. Is there a possibility that could produce better returns than a VLS60?

A_T

rathernot wrote: »

This is what I'm trying to work out - is there actually any safe haven other than cash if there's a downturn?

Depends on the scale and nature of the downturn. Historically treasuries have gone up during times of serious equity distress.