Vanguard Funds

AnotherJoe

Evesham_Hardcore wrote: »

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

Just worked it out, I've been investing for 35 years. Whilst often surprised by the exact timing of dips, I'm not surprised that they occur* and more importantly I am no longer perturbed.

I've lost, on paper, a LOT of money in some of those dips, and had i bailed out at the nadirs I'd have lost even more. I did, as it happens, overall, make much more than i lost, mostly through simply holding quality investments.

If you can or if you are, trickle more into the kids funds. They will thank you for it.

* (just look at stock market charts have you ever seen one that's a straight line all the way up?? So why be surprised?)

Audaxer

AnotherJoe wrote: »

I've lost, on paper, a LOT of money in some of those dips, and had i bailed out at the nadirs I'd have lost even more.

I know what you mean, but just to point out to the OP, you didn't actually lose any money as you didn't bail out. As you would have been accumulating by presumably continuing investing through the dips, you would have gained more by investing at cheaper prices. Years ago I did hold on to tracker funds throughout the dips, but I didn't continue investing as much as I should have done in these loss years. If I had I would have gained more.

OP - you shouldn't look at it as a loss, as volatility is a good thing when you are adding to your investments for the long term as you are buying funds at cheaper prices.

Thrugelmir

Evesham_Hardcore wrote: »

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.

Why? Investments aren't a bank deposit account which pay a fixed amount of income with the capital protected. You are buying a tiny share in Amazon, Apple, Netflix etc. These are companies which will wax and wane over the decades. More than likely you'll outlive the majority of them.

Manesova83

I can relate to the OP, as I too only started investing earlier this year, when the markets were pretty much at their highest. I'm in Vanguard LifeStrategy funds mostly. So in the few months I've been involved, it has pretty much been downhill all the way - currently around 7 or 8% down.

I know that this is just a minor blip in the grand scheme of things, but when that's your introduction to investing, the mind can trick you into thinking that's the way it's going to be long term.

Speaking of long term, I know virtually everyone says that the market is odds on to grow over time, but does anyone ever consider the fact that we may be entering completely new territory? I mean some of the issues facing the world are unprecedented - climate change being the obvious one. And when you consider the geopolitical tensions this will cause, it's easy to see that the future won't necessarily be a stable, predictable place.

Does anyone factor this stuff into their long-term outlooks?

I probably won't retire for another thirty years, if I'm lucky, but I have absolutely no idea what the world will look like by that time. Will there be work? Will there be peace? Will we adapt to the changes that are coming in a positive or negative way? All of this makes me less optimistic about the long-term opportunities that investing offers.

Alexland

Manesova83 wrote: »

but does anyone ever consider the fact that we may be entering completely new territory? I mean some of the issues facing the world are unprecedented

Yes every time some people think that and it causes them to sell low.

Alex

AnotherJoe

Manesova83 wrote: »

I can relate to the OP, as I too only started investing earlier this year, when the markets were pretty much at their highest. I'm in Vanguard LifeStrategy funds mostly. So in the few months I've been involved, it has pretty much been downhill all the way - currently around 7 or 8% down.

I know that this is just a minor blip in the grand scheme of things, but when that's your introduction to investing, the mind can trick you into thinking that's the way it's going to be long term.

Speaking of long term, I know virtually everyone says that the market is odds on to grow over time, but does anyone ever consider the fact that we may be entering completely new territory? I mean some of the issues facing the world are unprecedented - climate change being the obvious one. And when you consider the geopolitical tensions this will cause, it's easy to see that the future won't necessarily be a stable, predictable place.

Does anyone factor this stuff into their long-term outlooks?

Seriously, you think the past was a stable predictable place? Wow.

Manesova83 wrote: »

I probably won't retire for another thirty years, if I'm lucky, but I have absolutely no idea what the world will look like by that time. Will there be work? Will there be peace? Will we adapt to the changes that are coming in a positive or negative way? All of this makes me less optimistic about the long-term opportunities that investing offers.

If you've just started investing, then at times of falling investments is the the best time to be buying investments for the long term, when they are cheap.

And you really need to read some history if you think the future was full of optimism at the times of great depression, WWII, Suez canal, Cuban missile crisis, the oil crisis, etc etc etc.

fiisch

I'm in the same boat - only started investing in April properly so watching my investments drop is a little bit alarming (one S&S for me, one S&S JISA for daughter).


What I can't work out is... why shouldn't one try to time the markets in this scenario? I understand that we may still be a long way from the absolute bottom, but if you chuck in say an extra £5-10,000 during an obvious bear run, surely you are improving (but not guaranteeing) your odds of making greater returns when the market does eventually recover?


What am I missing?

enthusiasticsaver

No one knows what growth will be over the next four or five years. I have Vanguard life strategy funds too and they are supposed to be the type of fund you don't need to worry about rebalancing etc so I no longer check them that often. I know I don't need to draw on them and I know they will go up and down. The growth is not linear but with the lack of high interest alternatives anywhere else in the long run investing usually outperforms cash savings accounts. Just don't sell and crystallise losses.

enthusiasticsaver

fiisch wrote: »

I'm in the same boat - only started investing in April properly so watching my investments drop is a little bit alarming (one S&S for me, one S&S JISA for daughter).


What I can't work out is... why shouldn't one try to time the markets in this scenario? I understand that we may still be a long way from the absolute bottom, but if you chuck in say an extra £5-10,000 during an obvious bear run, surely you are improving (but not guaranteeing) your odds of making greater returns when the market does eventually recover?


What am I missing?

I wouldn't call investing during a period of stock market decline "timing the market". A lot of people do as you suggest and invest as prices are dropping so if you have spare money to invest it would seem to be wise to do that rather than invest when the markets are high. There has been all sorts of research as to whether timing the market or time in the market produces the best returns and the jury still seems to be out on that. I guess the problem with market timing is you don't know how low prices will fall or when they will go up again.

Zorillo

Fiisch, you're not missing anything. Reacting to what the market has done is one thing, trying to
anticipate what it's going to do is quite another.

I'm just annoyed I topped up last week rather than this week.