Investment cost

thegentleway

bowlhead99 said:

If you don't need the money for a very long time, and are not the sort of person to panic sell during a crash, I am sure you will do OK with a 100% equity allocation - but if you are more cautious, or curious whether you could 'grab a bargain' by having more cash on the sidelines to speculate in case you are right that the indexes will tank in value over the coming months or years, then that's your prerogative.

Thanks a lot for explaining; that's very helpful. To be honest, I don't *need* the money ever but I would prefer to have it to pay the option to pay for children education etc... I thinking of buying a house in about 5 years so might sell some investements for a deposit if the market has done well. But I'm not bothered if the market is down at that point as I don't need to sell: happy to rent/save up for a deposit. I like the idea of holding back a bit of cash to speculate, was thinking of holding some back anyway 'just in case'.

Linton

thegentleway said:

dunstonh said:

My vanguard LifeStrategy is only 0.22%!!

That is not quite true.    It is 0.22% plus 0.04% (depending on which version) plus platform charge.   
It is also not a socially responsible investment and does not include managed funds.   Most SRIs are managed funds.    Ethics cost money.

If you have an ethical stance with investing, then why are you using VLS?  Or are you only socially responsible when it doesn't cost you? 

Thanks for pointing out the platform charge (my LISA is with AJ Bell so it's 0.25%); that's a very good point! (There's also a £1.50 fund trading cost so 0.15% for a £1000 investment) What's the 0.04% btw?
I invested in VLS because I didn't realise there were ethical funds. Now I know this is an option, I'm very keen to ensure my investments are ethical, even if comes at cost to me. I presume there are DIY ethical funds so I need to research those to compare the 1.89% instead of my VLS.
I'm also a bit confused by the yields from Parmenion: the historic performance data for last 20 years shows an estimated yield of 1.66 for risk 9 (on a risk scale 1-10), however risk 4 has a yield of 2.43! (it also has lower charge of 1.67%!) Wouldn't one expect higher risk portfolios to get higher returns over a 20 year period?

"Yield" means money returned as dividends or interest and does not include investment growth.  Generally speaking high growth funds do not provide high dividends.

dunstonh

Thank you for explaining dunstonh; that's very helpful. I do have a 96 page report with cash flow, net worth, etc.. for the next 60 years so it sounds like the IFA is more into wealth management.

And do you find that 96 page report useful?

I have seen plenty of those over the years where people have got them out of the draw to show me and they are nothing like reality.  Life doesn't work like a spreadsheet.    I do agree that some low level cashflow planning is beneficial  but some take it to silly extremes.

Can I access DFMs without an IFAs? Seems to be it would be more cost efficient to either invest directly into DFM or get a GP IFA.

Some DFMs market direct to consumer but don't waste your time.  Unless you like reading lots of glossy material, which you would be paying for in your charges.

thegentleway

dunstonh said:

Thank you for explaining dunstonh; that's very helpful. I do have a 96 page report with cash flow, net worth, etc.. for the next 60 years so it sounds like the IFA is more into wealth management.

And do you find that 96 page report useful?

Not really, no (I love spreadsheets though!).

dunstonh said:

Some DFMs market direct to consumer but don't waste your time.  Unless you like reading lots of glossy material, which you would be paying for in your charges.

I like reading but not glossy material, especially not if I'm paying for it. I'll spend my time looking for another IFA then! Thank you for all the help; really appreciate it.