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Is 'Vanguard LifeStrategy' enough in your portfolio? - Page 5

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Is 'Vanguard LifeStrategy' enough in your portfolio?

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  • Kendall80Kendall80 Forumite
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    With an OCF of 0.32% (growth option) I believe the Fidelity Multi-asset allocator series may fit such a description.
  • MordkoMordko Forumite
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    A good investment is:
    1. Simple. Today there is very little reason to hold lots of different products
    2. Cheap. Cost is one and only aspect of performance which is entirely under your control
    3. Diversified. You are as diversified as one can be as far as the stocks are concerned.
    4. Aligned with you personality/risk tolerance. Only you can evaluate this, and only after reading and understanding a few good books.

    VLS is a great product for someone who doesn’t care enough to read a few books, understand them, develop an investment policy statement and stick to it. 100% in stocks for someone asking the kind of questions you are is likely too high. Nothings wrong with it for a young man, except that you must be able to stick to this strategy thru thick and thin. And it’s hard.

    You really don’t want to jump to advisors and products from a good solution you already have - unless you educate yourself first. Stick to plan A.

    And remember, it’s a game called “who gets a prosperous and secure retirement”. And you don’t win by trying to find the investments that would give the highest returns. You win by saving, minimizing costs, diversifying and forgetting about your portfolio once you picked one.
  • JustAnotherSaverJustAnotherSaver Forumite
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    Mordko wrote: »
    VLS is a great product for someone who doesn’t care enough to read a few books, understand them,
    Although i think i may know where you're coming from, i'd have to disagree with you there.
    I do care enough to read a few books and i have read a few books.


    You (not specifically YOU but an individual) could read 1000 books but if they're not grasping it then they're not grasping it.
    It also doesn't help when you come here (or just asking online in general, doesn't have to be MSE) to check things and you wind up in a situation that post 18 summarises.



    And remember, it’s a game called “who gets a prosperous and secure retirement”. And you don’t win by trying to find the investments that would give the highest returns. You win by saving, minimizing costs, diversifying and forgetting about your portfolio once you picked one.
    True. I'm not aiming to be the richest man in retirement. I'm not a cash splasher. I just want enough to live comfortably.

  • Anonymous101Anonymous101 Forumite
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    Mordko wrote: »
    A good investment is:
    1. Simple. Today there is very little reason to hold lots of different products
    2. Cheap. Cost is one and only aspect of performance which is entirely under your control
    3. Diversified. You are as diversified as one can be as far as the stocks are concerned.
    4. Aligned with you personality/risk tolerance. Only you can evaluate this, and only after reading and understanding a few good books.

    VLS is a great product for someone who doesn’t care enough to read a few books, understand them, develop an investment policy statement and stick to it. 100% in stocks for someone asking the kind of questions you are is likely too high. Nothings wrong with it for a young man, except that you must be able to stick to this strategy thru thick and thin. And it’s hard.

    You really don’t want to jump to advisors and products from a good solution you already have - unless you educate yourself first. Stick to plan A.

    And remember, it’s a game called “who gets a prosperous and secure retirement”. And you don’t win by trying to find the investments that would give the highest returns. You win by saving, minimizing costs, diversifying and forgetting about your portfolio once you picked one.



    Great post. One which sums up my thoughts on investing very clearly and concisely.
  • _pete__pete_ Forumite
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    My portfolio is split between Vanguard LS60 and it's HSBC equivalent. I need this portfolio to give me enough to live on for the next 40 years.

    I chose to go down this route because I don't have the ability to identify an IFA who can put together a portfolio that will consistently beat the Vanguard and HSBC products, particularly when their fees are taken into account.
  • MordkoMordko Forumite
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    It also doesn't help when you come here (or just asking online in general, doesn't have to be MSE) to check things and you wind up in a situation that post 18 summarises.

    About LifeStrategy being “managed”? Like post 18 says, it’s irrelevant. Everything is “managed”. The point is that it’s not ACTIVELY managed. LifeStrategy = a bunch of passive investments covering the world with fixed allocation to various markets. Except for the home market, allocations represent market cap. If you had bonds in your fund, it would be a fixed allocation too, again passive.

    Vanguard’s founder was the man behind passive cap weighted investment strategy (John Bogle). They upended Mutual fund industry and drove the costs down. They are doing the same to the IFA industry which is ripe for it. Vanguard US is a non-profit, is owned by investors which constantly strives to minimise cost. They have proven it over the years. Hard to go wrong with their products but it is possible; lately they’ve been introducing active ETFs. No idea why. Similar low cost products from BlackRock, HSBC et al are just as good, but once you picked one of these products there is very little reason to switch.

    Boards like this will always give you a bunch of opinions, good and bad and you have to pick. Good books are easier in this respect as they are often written by known individuals with a track record and provide detailed justification.

    Given you are 100% in stock (which may or may not be justified), I would suggest reading Deep Risk and Rational Expectations by Bernstein. Random Walk is a great book too, and of course John Bogles Little Book, but I would start with books about risk and asset allocation - if you haven’t read them yet.
  • PrismPrism Forumite
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    It also doesn't help when you come here (or just asking online in general, doesn't have to be MSE) to check things and you wind up in a situation that post 18 summarises.

    Don't overly worry about the differences between the Vanguard approach and some of those other risk targeted approach. You can't really go wrong with either. Impossible to know if the static percentage split of VLS is better than the floating splits of something like the HSBC range. Buy both if you can't decide.
  • dunstonhdunstonh Forumite
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    The decision to hold x% in US equity is a management decision. The decision to have a home bias is a management decision. The decision not to focus on a target volatility range but use a rigid equity content is a management decision.

    Using multiple multi-asset funds with different investment weightings is a management decision. if you thought fund A had the best allocations then why would you want fund B. If you thought fund A didnt have the right allocations then why are you using it in the first place.
    Vanguard’s founder was the man behind passive cap weighted investment strategy (John Bogle). They upended Mutual fund industry and drove the costs down. They are doing the same to the IFA industry which is ripe for it.

    Vanguard are not competing with IFAs. They provide no advisory services. Vanguard are also a very large managed fund house and they actually consider active management to be viable. They have just chosen not to launch their managed funds in the UK yet.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • MordkoMordko Forumite
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    Vanguard are not competing with IFAs

    They will be providing reasonably priced financial advice in the UK in the not too distant future. Something to look forward to.

    They are already providing excellent alternatives for cost conscious investors who don’t want to go the DIY route. And investing into LifeStrategy or passive funds isn’t “DIY” any more than buying IKEA products.
  • MordkoMordko Forumite
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    The decision to hold x% in US equity is a management decision.
    . Don’t stop there. The decision to invest is a management decision. How much = management decision. To get up in the morning.

    The point that matters is that active fund managers’ decisions in response to market conditions have been shown to hurt investors over long periods of time. LifeStrategy funds don’t do that.
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