Currency

finellah

Regarding foreign based funds the discussion at link below might be of interest. Maybe not what the original question was about but I was looking into this for another reason myself and thought of this thread.

https://forums.moneysavingexpert.com/discussion/5750102/offshore-funds-advantages-and-disadvantages

Apodemus

sixpence. wrote: »

Okay so my porfolio is

75% VLS 60
10% asian index ex japan
5% US mix caps
5% Japan mixed caps
5% China

So for the "rouge" 15% (the last three listed) I decided I wanted to further diversify the VLS, even though I know the VLS is a complete fund, because it is SO UK focussed. I am new to investing and quite young (turning 30 this year and am comfortable with a mediumish - maybe slightly high - risk factor) and I researched currencies but just wanted to double check I'm doing stuff okay. It's frustrating when the pound dips but I guess you just have to ignore and keep putting in every month...

Surely you would be better in VLS80 or 100?

Malthusian

Apodemus wrote: »

Surely you would be better in VLS80 or 100?

Everyone would be better in VLS100 unless they panic and cash it in when it falls by 40% or more. "Mediumish - maybe slightly high" means medium and VLS60 is the medium option. (Albeit we aren't doing anything recognised as risk profiling here.)

In the last correction (not even a crash) we saw people who invested above their risk profile come here and say something like "I invested in VLS80 but should I switch into VLS60 to limit further losses", which is a less damaging form of cashing in at the bottom of the market. This is the danger of talking yourself into going higher up the risk scale. If the OP finds in the middle of the next crash that he is below his risk profile and could have handled bigger paper losses, then brilliant - he can switch into VLS80 at that point and ride the eventual upside up even higher. (Note that this is the exact opposite of what most people would feel like doing, and all the experts will be telling you that you're insane to increase your equity allocation, just as they did in the spring of 2009.)