LifeStrategy 40

CRAIGSVILLE1

Aminatidi said:

Yes it's whether that's sustainable long term that I was interested in opinions on.
Realistically I don't think it's appropriate to be suggesting my mum goes heavier on equities so this is more about expectation than need if that makes sense.
It's easy to start second guessing yourself when looking at multi-asset funds and ending up looking at all sorts of asset allocations rather than keeping it simple.

Look at the Trojan O fund.  It goes back to Jun 2001 , with an annualised performance of 7.2 %

It has about 33% global equities, 10% gold , and the rest in bonds/gilts etc.

It has only lost 10% of its value twice in that time, which is good going.

Only slight downside is the AMC 1.0% fee  

Aminatidi

CRAIGSVILLE1 said:

Aminatidi said:

Yes it's whether that's sustainable long term that I was interested in opinions on.
Realistically I don't think it's appropriate to be suggesting my mum goes heavier on equities so this is more about expectation than need if that makes sense.
It's easy to start second guessing yourself when looking at multi-asset funds and ending up looking at all sorts of asset allocations rather than keeping it simple.

Look at the Trojan O fund.  It goes back to Jun 2001 , with an annualised performance of 7.2 %

It has about 33% global equities, 10% gold , and the rest in bonds/gilts etc.

It has only lost 10% of its value twice in that time, which is good going.

Only slight downside is the AMC 1.0% fee  

One of the interesting, well to me anyway, things about this exercise has been that whilst this is for my mum and fees matter, it's also got me questioning why I have my own money (around £175K) actively managed.

I have money of my own in Personal Assets which is more or less the investment trust equivalent of Troy Trojan.

Is it doing enough to offset a pretty much constant 0.8% additional fee?  Hard to say.

But in the scenario I'm in here for my mum I'd struggle massively to justify that sort of fee difference unless I had a really solid reason in my mind to think active would solidly outperform.

Quite the paradox really as I'm encouraging my mum to do what the likes of John Bogle and Lars Kroijer advocate, albeit LifeStrategy isn't true global weightings, whilst doing something entirely different myself.

Hypocrite much

bostonerimus

In a 40/60 mix Id probably plan for 3% or 4%, hope for 5% and stress test at 1% or 2%. FYI the Vanguard Wellington fund is 60/40 and has been around since the 1920s and the Wellesley fund, which is 40/60 was started in the 1970s. Wellesley is a popular income fund with US retirees that has returned 8% annually over the last decade

fred246

This thread to me demonstrates really well one of the biggest problems of using an IFA. The OP understands investments BUT it's for someone else who doesn't. So different investments are used. Plus the IFA reduces any gains through their massive unjustified fees. Understand the investments YOURSELF, invest better and KEEP ALL THE GAINS.

Aminatidi

fred246 said:

This thread to me demonstrates really well one of the biggest problems of using an IFA. The OP understands investments BUT it's for someone else who doesn't. So different investments are used. Plus the IFA reduces any gains through their massive unjustified fees. Understand the investments YOURSELF, invest better and KEEP ALL THE GAINS.

To be fair at the time she started using the IFA she had more money and her personal circumstances were different plus I wouldn't have had a clue either.
So I'm not anti-IFA thread as I'm sure they have their benefits for some people but right now not for my mum.

Aminatidi

bostonerimus said:

In a 40/60 mix Id probably plan for 3% or 4%, hope for 5% and stress test at 1% or 2%. FYI the Vanguard Wellington fund is 60/40 and has been around since the 1920s and the Wellesley fund, which is 40/60 was started in the 1970s. Wellesley is a popular income fund with US retirees that has returned 8% annually over the last decade

Yes I may have mentioned on this thread but I'd been looking as far back as I could using both generic bond/stock returns plus the US LifeStrategy funds and I have heard of the Wellesley.
"Hope for 5" would be reasonable over the longer term given it's all hers from now on other than a small platform fee.

fred246

I would personally go for VLS60 but if you are doing it for someone else who doesn't understand investments I understand why you may choose VLS40 to reduce volatility. That's what I mean about investing for someone else. You have to manage the investments and the person you are doing it for. VLS60 might be best in the long run but if next year turns out bad you could be out and the IFA reinstated.

Linton

CRAIGSVILLE1 said:

Look at the Trojan O fund.  It goes back to Jun 2001 , with an annualised performance of 7.2 %

It has about 33% global equities, 10% gold , and the rest in bonds/gilts etc.

It has only lost 10% of its value twice in that time, which is good going.

Only slight downside is the AMC 1.0% fee  

If you are happy with an annualised performance of 7.2% why is the AMC a downside?  The AMC is already included in the 7.2%.

Thrugelmir

fred246 said:

This thread to me demonstrates really well one of the biggest problems of using an IFA. The OP understands investments BUT it's for someone else who doesn't. So different investments are used. Plus the IFA reduces any gains through their massive unjustified fees. Understand the investments YOURSELF, invest better and KEEP ALL THE GAINS.

You never stop learning as an investor. Just when you think you've seen it all. You realise you haven't. A curved ball comes from nowhere. 

bowlhead99

Thrugelmir said:

Just when you think you've seen it all. You realise you haven't. A curved ball comes from nowhere. 

Being approximately spherical is one of the properties of balls. It's when the balls without curves appear, that you start to question what else you haven't seen yet.