Tracker fund investment for retirement

Glen_Clark

Tom99 wrote: »

[FONT=Verdana, sans-serif] Why would I want to invest 6x as much in the US as I do in the UK, just because its easy to do and the US market is 6x larger than the UK market. [/FONT][FONT=Verdana, sans-serif] [/FONT]

Why indeed but thats not what you would be doing because most investment in the US is really investment in worldwide companies.

Alexland

andy001 wrote: »

Looks like bull market is coming to an end. Should one be considering to stop Vanguard LS100 and rebalance with LS 20 or 40?

That's a huge change in asset allocation - if successfully timing the market was that easy everyone would do it but the research suggests most people get it wrong selling in fear after a drop and not getting back in before the rise.

I see no harm in maintaining a steady risk profile by slightly adjusting your exposure based on fundamentals aiming to be more cautious when markets are looking expensive and more adventurous when markets are looking cheap. I wouldn't advocate the magnitudes of the swings you are considering.

Alex

andy001

Hello MSEs- Alexland, bostonerim, Linton, AlanP, Dunstonh, Thrugelmir and rest

Many thanks for your help .. I was panicking..

What will I do if I'd a big portfolio..:rotfl::j
Learning lesson- don't panic and stick to plan- for long term benefit ..
Thanks again.
andy

londoninvestor

andy001 wrote: »

What will I do if I'd a big portfolio..:rotfl::j
Learning lesson- don't panic and stick to plan- for long term benefit ..
Thanks again.
andy

This is really key to long-term success I reckon. Read, reflect and study so that by the time you have a bigger portfolio, there's no panicked decision making - you just stick to the game plan that you've formulated and internalised.

short_butt_sweet

Alexland wrote: »

I see no harm in maintaining a steady risk profile by slightly adjusting your exposure based on fundamentals aiming to be more cautious when markets are looking expensive and more adventurous when markets are looking cheap.

IMHO, we need to distinguish a few possible different reasons for varying your level of exposure to equities at different times.

by mentioning markets "looking expensive", you seem to be referring to value investing, and specifically to the idea of holding less in equities when they are higher priced relative to some fundamental valuation (e.g. simple price-to-earnings, or CAPE10, or whatever), more when they are lower priced. that's one idea.

that's rather different from andy001's suggestion that it looks like the "bull market is coming to an end". that sounds more like trend-following, AKA "time series momentum". (or it could just be panicking, but let's give the benefit of the doubt here .) this is the idea that you should reduce exposure to equities when they start to fall (because they tend to go on falling when they have started falling), and increase exposure again when they start to rise (because they tend to go on rising when they've started).

and some multi-asset funds, which make use of risk-targetting, are doing something different again. they reduce their equities when equities have been more volatile recently, and increase them when they have been less volatile. (to be fair, that is not a full description of what they do, because they also look at correlations between different asset classes, in order to target a given volatility for the whole portfolio.) this can be similar to trend-following, in that, for instance, a big crash in equities may well cause both these methods to reduce their holdings in equities; but they are not the same strategy.

so i think we need to be clear which of those three possible rationales (or which completely different rationale) for varying one's level of exposure to equities we are talking about.

and then we can discuss why that rationale is not such a good idea. because IMHO there are problems with all the above approaches . but they have different problems from one another.

andy001

Hello MSE members
How are your funds doing? I have decided to stay put on tracker funds and holding my nerves!
Andy

andy001

So much has changed over the year! All positive growth!