Vanguard 80% and Coronavirus

Malthusian

No advice, but I'm in the same boat as you and I'm absolutely cr4pping myself. Have 2x kids JISA in a LS80, my heart and soul put into growing each kids account, proudly through some horrific times in my life I've always kept putting away for them, and I fully accepted the risks

Apparently not. No judgment there, Vanguard 80% is higher risk than most of the population can bear. Risk profiling is difficult.

but who could've ever predicted a situation as severe as like this.

Everyone who was aware of what happened in 2000 and 2008, and the many many other equally severe situations throughout history. What is happening now has been expected for years, the only thing none of us could predict was exactly when it would come.

Linton

w00519773 said:

Thrugelmir said:

4) Do nothing. For the time being overpay your mortgage instead. 
Then you can sleep easy. Knowing that the amount you owe is decreasing. Plenty of time to reconsider your options as events unfold. 

That is what I thought but then the consensus appears to be that there will be a recession until a cure is found for coronavirus (likely to be next year) - I realise this is all speculation and no-one has a crystal ball!
Therefore I am contemplating just converting the whole thing into cash.  However, this goes against anything I have learnt over 10 years as an amateur investor at best.

Certainly not a consensus I would agree with.  The market prices on its beliefs for the short to medium term future, not on the present.  What it likes least of all is not knowing, which is the situation at the moment, when it tends to fear the worst.

On that basis I would expect prices to rebound quickly as soon as the number of new cases stabilises and begins to fall.

As to time period, at the current rate of exponential growth this may well be no more be more than a few months away by when every one has had the virus and most have survived.

Even if a major fall lasted until next year why should that be a problem?  You should not be investing with money you need within any less than 5 years.

Albermarle

However, this time seems different.  My research is telling me that there won't be an improvement until a cure if found for coronavirus, which is likely to be next year.  

I am not a medic but as far as I am aware there is no prospect of a cure for Covid 19 ( same as there is no cure for flu, common cold etc ) In time there will be a vaccine , probably only partly effective and maybe some anti viral treatments to lessen symptoms.

Combine these with some herd immunity and it will reduce as an issue, but not in a straight line, and  we will not be out of the woods for at least 15 months IMHO .

Albermarle

Captain_Bravo said:

Another problem with Vanguard LifeStrategy funds is the amount of time needed to sell. I saw a nice rally on Friday 13 March, I decided to sell fast and buy back in April , but it was sold only this morning, 15% cheaper than Friday prices (

It's the same issue with all the thousands of OEIC type funds available . They are priced only once a day and there is a prior cut off point for accepting instructions. 
They are not really designed to be traded. If you want to trade and try and beat the market ( good luck there) you need to be buying and selling investments that trade in real time .

Grandst2

It sounds like 80% equities is too hot for you, how would you feel if the loss hits 50%. 

tel_

Kendall80 said:

VLS funds are priced at 9pm UK time. However, your ISA provider will have a cut-off time for getting trades in (10am for CSD).

This means if you submitted your Friday sell order before 10am you would've got Fridays 2100 VLS price.

If you submitted your sell order after 10am Friday you would have received Mondays 2100 VLS price and received your contract note today.

Do you know what time Vanguard takes payments from peoples bank accounts when a monthly occurring direct debit is taken out?

I'm guessing that's before the 10am cut off? I've not managed to work this out.

Thrugelmir

tel_ said:

Kendall80 said:

VLS funds are priced at 9pm UK time. However, your ISA provider will have a cut-off time for getting trades in (10am for CSD).

This means if you submitted your Friday sell order before 10am you would've got Fridays 2100 VLS price.

If you submitted your sell order after 10am Friday you would have received Mondays 2100 VLS price and received your contract note today.

Do you know what time Vanguard takes payments from peoples bank accounts when a monthly occurring direct debit is taken out?

I'm guessing that's before the 10am cut off? I've not managed to work this out.

Vanguard will have no control over the time. As Vanguard don't actually process the payment runs themselves. . 

tel_

Oh right. Anytime in the morning then? Could be sometime before, or sometime after 10am?

bowlhead99

tel_ said:

Oh right. Anytime in the morning then? Could be sometime before, or sometime after 10am?

It doesn't really matter. If you expect to have a direct debit coming out that day you will need cleared funds in your current account available that day based on your own bank's T&Cs so that the the direct debit doesn't fail.

The investment payment for a buy or sell transaction isn't due for settlement until a couple of business days after the order has been accepted. If you have asked to make a recurring  investment in Fund X on day Y of every month funded by direct debit and given them your bank details, they'll probably assume you're good for the money and set up the investment order for that day, as they assume the DD won't fail. So you would expect to get that day's price.

If it matters to you, ask them. But the whole point about buying for the long term via recurring direct debit is that over the long term, the fine details won't matter.

tel_

bowlhead99 said:

tel_ said:

Oh right. Anytime in the morning then? Could be sometime before, or sometime after 10am?

It doesn't really matter. If you expect to have a direct debit coming out that day you will need cleared funds in your current account available that day based on your own bank's T&Cs so that the the direct debit doesn't fail.

The investment payment for a buy or sell transaction isn't due for settlement until a couple of business days after the order has been accepted. If you have asked to make a recurring  investment in Fund X on day Y of every month funded by direct debit and given them your bank details, they'll probably assume you're good for the money and set up the investment order for that day, as they assume the DD won't fail. So you would expect to get that day's price.

If it matters to you, ask them. But the whole point about buying for the long term via recurring direct debit is that over the long term, the fine details won't matter.

bowlhead99 said:

tel_ said:

Oh right. Anytime in the morning then? Could be sometime before, or sometime after 10am?

It doesn't really matter. If you expect to have a direct debit coming out that day you will need cleared funds in your current account available that day based on your own bank's T&Cs so that the the direct debit doesn't fail.

The investment payment for a buy or sell transaction isn't due for settlement until a couple of business days after the order has been accepted. If you have asked to make a recurring  investment in Fund X on day Y of every month funded by direct debit and given them your bank details, they'll probably assume you're good for the money and set up the investment order for that day, as they assume the DD won't fail. So you would expect to get that day's price.

If it matters to you, ask them. But the whole point about buying for the long term via recurring direct debit is that over the long term, the fine details won't matter.

Many thanks for the info, much appreciated.