Vanguard Funds

Evesham_Hardcore

6 months ago I put some of the kids money into Vanguard 60/80 lifestrategy funds.

Both are down, boo!

Of course this is a long game but having looked at the last 5 years growth (+5/10% PA) I'm surprised to see a dip.

Got to stay in of course, I'm wondering what the future performances will be, maybe not the higher returns we have seen over past years

Jon

MK62

Possibly not, but who knows.


As you said, 6 months is nowhere near long enough to judge investments such as these....they go up and down all the time.
It's often suggested that 5 years is the minimum timeframe you should have in mind at the outset, ideally longer......


PS....there was a similar fall in Jan/Feb this year and a bigger one in early 2015.....they'll have been drowned out though by the annual overall return numbers.

talexuser

We have had a record bull run based on cheap money from central banks since the crisis of 2008. Many believe it cannot continue at that rate forever, especially as interest rates rise and Quantitative Easing is supposed to end. You are right, you have to stay the course and the odds are the market will still beat cash in the long term.

eskbanker

Evesham_Hardcore wrote: »

I'm surprised to see a dip.

You wouldn't be surprised if you'd spent any time on here or keeping up with the basics of what's been happening in world markets in recent weeks.

Nothing out of the ordinary though - any equity-based investments will have plenty of peaks and troughs along the way rather than seeing linear growth, so no reason to be disheartened.

In the general scheme of things, the recent downturn is no more than a blip, so don't be surprised at more significant corrections in future - as ever, nobody knows when these will happen but it is when rather than if....

dunstonh

Of course this is a long game but having looked at the last 5 years growth (+5/10% PA) I'm surprised to see a dip.

The last 5 years only have the growth period following a crash period. Apart from a bit in 2015/16 where markets fell 20% for a short period.

The VLS60 fund is a 25% loss capable fund and VLS80 is around 35% loss potential. So, a small decline like we have seen in the last few weeks should be no surprise.

I'm wondering what the future performances will be, maybe not the higher returns we have seen over past years

You would hope that the returns will be similar to the long term average for the asset weightings. Certainly not as high as the last 5 years as that is just half the cycle.

jamei305

It sounds like you invested in stocks without any idea of what that entails - you should be surprised if you don't see any dips.

zzzt

Stock markets are dipping worlwide, and they will do it again multiple times.

Look again in 10 years. There is no point in checking on it every month.

tel_

zzzt wrote: »

Stock markets are dipping worlwide, and they will do it again multiple times.

Look again in 10 years. There is no point in checking on it every month.

I have been checking my investments at least once a week - I think I'm addicted!

It's only because I'm new to S&S investing. I'm sure the 'novelty' aspect of it will wear-off eventually for me

bowlhead99

tel_ wrote: »

I have been checking my investments at least once a week - I think I'm addicted!

It's only because I'm new to S&S investing. I'm sure the 'novelty' aspect of it will wear-off eventually for me

It does eventually wear off, you just have to get into the mindset that your kids are not going to be spending the money this week or next week or next month or next year, so it doesn't really matter what the value is this week or next week etc.

You can think of the falls in the value of the funds this year as just part of the process of getting the returns from this sort of fund down to a reasonable long term annualised return, from the exceptionally high average returns they had been enjoying in the previous three, five, nine years.

If you didn't have the drops and corrections along the way and it just kept going up and up for the next decade you would need to have an absolutely massive drop to get the investments back down to a reasonable value, and that might be quite a nasty surprise if it was after you had just put the last of your children's savings into the fund and were hoping to withdraw at some point soon.

Whereas by bobbling down at various points along the way after they have been going strongly up, it gives you more of a chance to keep investing at low prices. A hearty dose of realism from time to time is quite useful to keep us all grounded. Although, what you have seen in recent month or two is still only a mild, rather than hearty, dose of reality :beer:

scoot65

tel_ wrote: »

I have been checking my investments at least once a week - I think I'm addicted!

It's only because I'm new to S&S investing. I'm sure the 'novelty' aspect of it will wear-off eventually for me

Same here! I only started investing in February this year and I've got to say, I check daily, probably out of novelty's sake

Like you, I'm assuming (hoping) this will wear off eventually as the broker I've used and the funds I've invested in are supposed to be the 'fire and forget' type.

It's like when I'm looking for a particular item on that well known online auction site, I can be obsessive, checking far more often than is probably deemed healthy

Iain_For

No harm in learning how your investments respond to market volatility, helps in asssessing whether you’ve got the right asset mix for your risk profile. Just don’t do anything rash.