£40K in VL60 Fund

FrankR

Hello,
New to investing.
VLS60/40 seems all the rage at the moment.
Should I put my £40,000 in the VLS60/40 for 1 year?
How much can I expect to make?

AnotherJoe

Maybe its shoeshine boy time :eek:


You could make £10k or lose £10k.
Rather like dogs, investments are more for ten years than one and if you think you "can expect to make" any given amount in one year, you should put it in a savings account as you are out of your depth. Well out. Try reading Monevator as a start to getting educated on investing.
You also shouldn't buy something because its 'all the rage", I'd say there are better investments in the same area than the VLS range.

FrankR

AnotherJoe wrote: »

Maybe its shoeshine boy time :eek:


You could make £10k or lose £10k.
Rather like dogs, investments are more for ten years than one and if you think you "can expect to make" any given amount in one year, you should put it in a savings account as you are out of your depth. Well out. Try reading Monevator as a start to getting educated on investing.
You also shouldn't buy something because its 'all the rage", I'd say there are better investments in the same area than the VLS range.

Why would I lose as much as 10k? Where did you pull that figure from?

Also, would Brexit likely affect investments like the VLS60/40 if the value of the pound falls (if it is a hard Brexit after all)? Or wouldn't it matter as the VSL60/40 is based on non-UK companies?

AnotherJoe

£10k is a 25% drop. Not at all out of the picture if there was a decent stock market fall and the pound rose against the dollar with a good* brexit)
( Brexit will affect it due to currency movements. VLS has a 25% pseudo UK allocation which is mostly global and affected by currency movements more than the UK economy)
If the Pound falls, then VLS would rise.



* 'good' as defined by whatever the markets think is good.

aj9648

FrankR wrote: »

Hello,
New to investing.
VLS60/40 seems all the rage at the moment.
Should I put my £40,000 in the VLS60/40 for 1 year?
How much can I expect to make?

Yes it is the rage so you will have easily cleared £1m by the end of the year - no problems. If you can put in more you will make more.

FrankR

AnotherJoe wrote: »

£10k is a 25% drop. Not at all out of the picture if there was a decent stock market fall and the pound rose against the dollar with a good* brexit)
( Brexit will affect it due to currency movements. VLS has a 25% pseudo UK allocation which is mostly global and affected by currency movements more than the UK economy)
If the Pound falls, then VLS would rise.



* 'good' as defined by whatever the markets think is good.

Well I think the pound will rise over time and we will have a soft Brexit, or no Brexit at all. Are you saying this is bad for investment returns?

Going by last year's performance, VSL60/40 made a negative annual return of -3.1% in 2018.

Does that mean I would have made a 3.1% loss (plus fees) had I invested that year?

Do you think the next year is good for for a 12 month investment?

AnotherJoe

FrankR wrote: »

Well I think the pound will rise over time and we will have a soft Brexit, or no Brexit at all. Are you saying this is bad for investment returns?


It will lower the relative value of investments overseas. So if most of your investments are overseas, yes compared to them all being "UK" (which is more difficult than you'd think to invest it)


Going by last year's performance, VSL60/40 made a negative annual return of -3.1% in 2018.

Does that mean I would have made a 3.1% loss (plus fees) had I invested that year?
Yep


Do you think the next year is good for for a 12 month investment?

I dont think any year is good for a 12 month investment.

For 12 months look at the top savings rate accounts above unless you are happy to gamble. Investing is for long periods, certainly much longer than a year. For a year, its gambling.

Ive done that but no disrespect someone who comes on and asks "how much will I make" doesn't seem to have understood the element of risk here.


p.s. I take it you mean by VLS40/60 one or the other?eg VLS40 or VLS60? I doubt they both lost 3.1% last year?

recruit18

FrankR wrote: »

Do you think the next year is good for for a 12 month investment?

No one knows what stocks and bond prices will do over the next 12 months. Investing in the stock market is a long term thing as the markets have big swings in an individual year, but over the long run they have always gone up. If you might need the money in 12 months put the money somewhere safer.

Alexland

It's impossible for anyone to determine how stock markets will perform over a 12 month period and if investing in S&S, even at balanced VLS60 risk, you need to consider at least a 5 year preferably longer period to have much certainty of making any return whatsoever. Over 10 years I would expect VLS60 to return around inflation after fees but in the next 12 months it could easily drop 25% or slightly more. From current valuations it's hard to imagine anything likely to cause it to increase by 25% in the next year.

DairyQueen

FrankR wrote: »

Well I think the pound will rise over time and we will have a soft Brexit, or no Brexit at all. Are you saying this is bad for investment returns?

Going by last year's performance, VSL60/40 made a negative annual return of -3.1% in 2018.

Does that mean I would have made a 3.1% loss (plus fees) had I invested that year?

Do you think the next year is good for for a 12 month investment?

No year is 'good' for a 12-month investment in the markets. If that's your timeline then forget this option.

The absolute minimum investment period for stock markets is five years and, preferably, ten. The reason is obvious - volatility. The value could gain/lose 25% (or more) in any one year.

If you are happy to take the risk then go ahead and invest. However, if you carry-out basic research I suspect that you will quickly decide that a 12-month, fixed-interest, cash savings bond is your best bet.

Thrugelmir

If your aim is still to be buy a house. Suggest you stick to something safe and boring. Winning at poker is somewhat different to speculating against investors with far bigger pockets.