Vanguard Investors - Anyone Using It?

webjaved

Alistair31 wrote: »

I would just pick one, 40, 60 or 80 and forget about it.

At the moment I had 40,60 and the 40 has been performing better than the 60. So out of the three what would you recommend I go with?

Herbalus

webjaved wrote: »

So would you recommend splitting my funds so half is in 40 & half is in 80? I think I'll probably end up transferring the funds in 60 to 80 then and have my funds split in 40,80. A three way split thinking about it sounds excessive? Would that be a good move?

You're not quite getting it.

VLS40 = 40% equity.
VLS80 = 80% equity.

So if you have £100 in VLS40 you have £40 in equities, and if you have £100 in VLS80 you have £80 in equities in that one.

Combined together you have £120 in equities from £200 invested. This is the same as VLS60, which has £60 in equities for each £100 invested. So if 60% equities is what you want, balancing your tolerance for market swings with desire for returns over your investment time frame (which is?), then you might as well just put it all in VLS60.

Having more than 1 is not excessive - it just doesn't make any sense.

Think about it like curry. You have a choice of Korma, Madras, or Vindaloo. With VLS you should sit down and work out which one you want best, and then go for that one. It's not excessive to have one third Korma, one third Madras, and one third Vindaloo all mixed up for lunch - it just doesn't make any sense.

dunstonh

I've spread it out to see which Life Strategy fund would perform best.

in order, you would expect VLS20 to perform the worst and VLS100 to perform the best with the rest in order of equity content. It may take an economic cycle or two and there is always the unknown but broadly speaking, the more the equity, the greater the long term returns are.

However, the greater the equity content, the higher the short term losses will be as well.

So would you recommend splitting my funds so half is in 40 & half is in 80? I think I'll probably end up transferring the funds in 60 to 80 then and have my funds split in 40,80. A three way split thinking about it sounds excessive? Would that be a good move?

A split between 40 and 80 is 60. So, why not hold 60?

I guess Brexit is making the stock markets swing up & down. :P

Its a minor influence on the markets. There are much bigger issues.

Alice_Holt

webjaved wrote: »

At the moment I had 40,60 and the 40 has been performing better than the 60. So out of the three what would you recommend I go with?

I'd recommend you do some research, and think clearly about your investment objectives, before deciding on this.
How long is your investment horizon?
What is your risk tolerance?
Etc, etc

https://monevator.com/investing-for-beginners-why-do-we-invest/
https://www.amazon.co.uk/Investing-Dummies-UK-Tony-Levene/dp/1119025761
As a start.

redpete

webjaved wrote: »

At the moment I had 40,60 and the 40 has been performing better than the 60. So out of the three what would you recommend I go with?

The decision should have nothing to do with the performance over what I would guess is a pretty short time period. Equity investments are often recommended to be for 5+ years, this allows the investments to recover from a downturn in the economic cycle. The higher percentage of equities expose you to the more volatile (changing rapidly with time) performance compared with higher percentage of bonds which historically have less volatility. There was a time when bonds were seen as a safe home as they would typically rise at times when share prices fell - this relationship can no longer be relied upon but the size of the swings with bonds is likely to be less.

The decision on 40/60/80 is more to do with your attitude to risk than historic performance. Are you willing to gamble for higher performance in the long term against the possibility of bigger losses in the short-medium term. (And remember that you don't make actual profit or loss unless you sell the investment.)

What do you eventually want to do with your invested money? Will you need to cash them in at short notice or could you leave the money in during times of poor performance to allow them to recover? What other savings or investments do you have? How much are you investing regularly?...

Audaxer

webjaved wrote: »

So would you recommend splitting my funds so half is in 40 & half is in 80? I think I'll probably end up transferring the funds in 60 to 80 then and have my funds split in 40,80. A three way split thinking about it sounds excessive? Would that be a good move?

The only reason for splitting VLS funds would be if you want a different allocation of equities. In other words if you want 50% equities, you could have half your investment in VLS40 and half in VLS60. There is no point in having a VLS40 and a VLS80 when you could just have a VLS60 if you want 60% equities.

Got any links on P2P? I guess Brexit is making the stock markets swing up & down. :P

I think P2P is more risky and not really advisable for inexperienced investors.

bostonerimus

Javed, How old are you and what is this money for? You haven't done anything really bad with your choice of the various VLS funds (I've seen lots of far worse portfolios on here), but you have made things a little more complicated than they need to be. You should just choose one VLS fund in accordance with your comfort with risk and volatility.

FYI I use Vanguard in the USA (I live in the US) for the majority of my investing and my portfolio is 50% domestic (ie US) equity index, 20% International equity index and 30% US bond index.

Bravepants

webjaved wrote: »

You can probably tell I'm a newbie at all this, the more experienced people that know more about S&S, what's the best resources to read?

Which equity fund would I be looking at then on Vanguard Investors?

Thanks for the patience with me. ��

If I was in my 20s (I'm not, I'm just entering my 50s ) I would probably drip feed some money every month into Vanguard's FTSE Global All Cap Index fund.



Because I'm older, but still want the possibility of long term growth, I have 75% of my ISA holding in VLS 60 and 25% in FTSE Global All Cap...making a 70% Equity to 30% bond split. I will in all likelihood keep this split even in retirement and drawdown something like 3% per year...so it is still long term.



BUT I also have a couple of DB pensions and a SIPP held as cash because I will need to draw large chunks of that in about 5 years or so....so low risk for short term need...higher risk profile in my longer term ISA funds.



There is absolutely nothing wrong with going VLS 60 (or 40 or 80 or anything else) your whole life. It all depends on how you intend to use the money...short term, long term, retirement, house deposit etc.



Some points for you to consider for your future:

• Start with 3, 6 or 12 months outgoings (maybe even swap the word "outgoings" for "salary") as an emergency fund in some sort of (or several) instant access account. Find out about current accounts, regular savers etc. and the interest rates they provide.

• Once you have your emergency fund in place, and any cash for expenditure in the short term, such as house purchase deposit, replacement car, wedding (don't overspend on this) etc., then stash as much as you can, monthly, in a global index fund (read up online about these). As you get older switch to funds that a contain a mix of equities and bonds (read up online about these), AND/OR,

• Buy or borrow a copy of Tim Hale's "Smarter Investing", and

• Read up about the tax advantages of Stocks and Shares ISAs and SIPPS, and

• Check out www.monevator.com, particularly the passive investing section, and,

• If considering retiring early check out www.mrmoneymustache.com for inspiration

• Whatever fund(s) you plan to invest in make sure you don't pay too much in annual fees; a good passive index fund should be around 0.5% or so, including platform charge, active funds (those managed by humans) are around 1% to 1.5% but try to keep close to 1%. In no way pay 2% in annual fees for any of your investments!

• Keep an eye on your work pension and how much extra your company contributes for any additional contribution you make, pensions (work, private or SIPPS) are particularly good if you are a higher rate tax payer

• Learn about the concept of a "phased" retirement, using certain pots of money to carry you through periods before work pensions become payable at Normal Retirement Age.
  

• Learn to use Microsoft Excel (other spreadsheet software is available) and write yourself a retirement planning spreadsheet!

All the best and good luck!

Clive_Woody

https://monevator.com/using-vanguard-lifestrategy-funds-life/

dont_use_vistaprint

Herbalus wrote: »

Think about it like curry. You have a choice of Korma, Madras, or Vindaloo. With VLS you should sit down and work out which one you want best, and then go for that one. It's not excessive to have one third Korma, one third Madras, and one third Vindaloo all mixed up for lunch - it just doesn't make any sense.

Unless you enjoy Thali.

Its probably more like having a bit of session ale and then a bit of tenants super , you should probably just go for an IPA around 5%