Vanguard LS SIPP - 14 years to Go..

RolandFlagg

Just before the virus I started putting £240 a month into a VLS60. Topped up to £300 a month with tax relief.
I'm a novice investor who no longer works (I've just turned 51), and I've already have enough secure investments/cash/property etc for a decent retirement.
So the £240 a month isn't an issue if the markets go pear shaped between now and retirement.
Considering the low relatively low amount I'm investing, and the 14+ year time frame, I'm thinking I may as well just go for potential maximum returns and change to a VLS100, or at least a VLS80, and that the VLS60 is playing it too safe.
I may as well have a bit more risk with the £240 a month which I can afford to lose.
Is my thinking flawed in anyway? Thanks.

AnotherJoe

Thats what id do especially since  the money isn't a huge deal to you *and* the timescale isn't fixed, the upside considerably outweighs the downside.

FWIW I dont see any point going for VLS80. All or nothing.

One other point, can you put the whole £2880 in in one go? Statistically that will give a better return because as well as your money, you have all the tax relief in near the start of each tax year.

RolandFlagg

Thanks for confirming what I was thinking.

Thrugelmir

When do intend to access the pot? 

RolandFlagg

Probably when I'm 65. 14 years.

Thrugelmir

Then besides a potentially greater return. You need to accept greater volatility. At the time you need the money the value may have dropped significantly.

Coming out of what potentially could be a depression. Equity returns may not be as good as they have more recently. 

AnotherJoe

The  OP said that they are well set for retirement anyway so it would seem they can wait awhile if this doesn't happen to play out exactly at 14 years. 

Sailtheworld

On the other hand if you don't need the money what's the point of taking additional risk?

digbydog

This article suggests that the best returns over the last 20 years would have been achieved with around 60/40% split  https://www.justetf.com/en/academy/how-much-risk-should-you-take.html or am I misreading it?

Notepad_Phil

digbydog said:

This article suggests that the best returns over the last 20 years would have been achieved with around 60/40% split  https://www.justetf.com/en/academy/how-much-risk-should-you-take.html or am I misreading it?

Well the article is using German government bonds and it's not clear what currency it's using (possibly/probably euro?), so if you are in the UK and you were considering using it as a basis for your investment strategy then you might need to do some more research to find the best mix over the last 20 years for people over here investing in pounds and using a more likely source of government bonds. Though obviously that won't tell you what will be the best mix for the next 20 years.

If I could be sure that the world environment was going to be as conducive to good bond performance over the next 20 years as it has been over the last 20 then I might use bonds in my own portfolio, however I don't, so as I'm early retired I'm at something like 70% equities with 30% cash held in savings to live off during times like this when the yield from equities is being heavily reduced.

Thrugelmir

digbydog said:

This article suggests that the best returns over the last 20 years would have been achieved with around 60/40% split  https://www.justetf.com/en/academy/how-much-risk-should-you-take.html or am I misreading it?

Hence the continual warnings about reading too much into past performance.