Bond fund as alternative to savings?

bogleboogle

Deleted_User said:

C_Mababejive said:

Linton said:

Why have you got a lot of cash lying around doing nothing?  If you need it in the < 5 year  term keep it as cash as the guarantees could be more important than the interest you would get. If you dont need it in the next 5 years or so invest it, accepting that there are no guarantees.  I believe strategic bond funds could be useful as part of a broader diversified portfolio, depending of course on your objectives.  However they are capable of moderate falls in value - Jupiter Strategeic Bond, which seems to be a relatively cautious one, dropped about 10% in March and has not quite recovered to its previous value.

Lots of cash doing nothing ...> Well the issue is that im hearing all these messages;
1)The stockmarket is heading toward the end of a long bull run/there might be a post covid crash,,,shouldi  push a big lump of money into investments at this time? if so,into what? more in my global tracker? put money into actively managed funds?

2) Bonds are no good because of the reasons stated by some in this very thread

3) savings rates seem to be rubbish all round and on top of that, id have to pay 20% income tax

Plan/Strategy? non in particular,,i keep getting paid/generating money so i seek to increase wealth because what else can you do other than give it away ?

Active funds are a good option if you can stay invested long term. Leave the headache of analysing and managing risk to the fund managers. Spread it across 4 or 5 funds that have a good track record. 

Terrible advice. Over the long-term only 2/10 active fund managers outperform the stock market. So not only will they provide inferior returns compared to an index tracker 80% of the time, they'll charge you (comparatively) extortionate rates to do so. 

Prism

bogleboogle said:

Deleted_User said:

C_Mababejive said:

Linton said:

Why have you got a lot of cash lying around doing nothing?  If you need it in the < 5 year  term keep it as cash as the guarantees could be more important than the interest you would get. If you dont need it in the next 5 years or so invest it, accepting that there are no guarantees.  I believe strategic bond funds could be useful as part of a broader diversified portfolio, depending of course on your objectives.  However they are capable of moderate falls in value - Jupiter Strategeic Bond, which seems to be a relatively cautious one, dropped about 10% in March and has not quite recovered to its previous value.

Lots of cash doing nothing ...> Well the issue is that im hearing all these messages;
1)The stockmarket is heading toward the end of a long bull run/there might be a post covid crash,,,shouldi  push a big lump of money into investments at this time? if so,into what? more in my global tracker? put money into actively managed funds?

2) Bonds are no good because of the reasons stated by some in this very thread

3) savings rates seem to be rubbish all round and on top of that, id have to pay 20% income tax

Plan/Strategy? non in particular,,i keep getting paid/generating money so i seek to increase wealth because what else can you do other than give it away ?

Active funds are a good option if you can stay invested long term. Leave the headache of analysing and managing risk to the fund managers. Spread it across 4 or 5 funds that have a good track record. 

Terrible advice. Over the long-term only 2/10 active fund managers outperform the stock market. So not only will they provide inferior returns compared to an index tracker 80% of the time, they'll charge you (comparatively) extortionate rates to do so. 

Its not terrible advice at all. There are several active funds which have a simple aim of keeping up with inflation. They are not trying to beat some benchmark over a set period of time. If that was my goal I would rather use an active fund with that specific target than just hoping VLS20 or something similar will do it.
Active funds have their place. There are some good ones amongst all the dross. 

aroominyork

bogleboogle said:

Deleted_User said:

C_Mababejive said:

Linton said:

Why have you got a lot of cash lying around doing nothing?  If you need it in the < 5 year  term keep it as cash as the guarantees could be more important than the interest you would get. If you dont need it in the next 5 years or so invest it, accepting that there are no guarantees.  I believe strategic bond funds could be useful as part of a broader diversified portfolio, depending of course on your objectives.  However they are capable of moderate falls in value - Jupiter Strategeic Bond, which seems to be a relatively cautious one, dropped about 10% in March and has not quite recovered to its previous value.

Lots of cash doing nothing ...> Well the issue is that im hearing all these messages;
1)The stockmarket is heading toward the end of a long bull run/there might be a post covid crash,,,shouldi  push a big lump of money into investments at this time? if so,into what? more in my global tracker? put money into actively managed funds?

2) Bonds are no good because of the reasons stated by some in this very thread

3) savings rates seem to be rubbish all round and on top of that, id have to pay 20% income tax

Plan/Strategy? non in particular,,i keep getting paid/generating money so i seek to increase wealth because what else can you do other than give it away ?

Active funds are a good option if you can stay invested long term. Leave the headache of analysing and managing risk to the fund managers. Spread it across 4 or 5 funds that have a good track record. 

Terrible advice. Over the long-term only 2/10 active fund managers outperform the stock market. So not only will they provide inferior returns compared to an index tracker 80% of the time, they'll charge you (comparatively) extortionate rates to do so. 

If (if) 2/10 is an accurate stat about something or the other, is it 80% of funds which underperform or 80% of money which is in underperforming funds? I expect the former. There are lots of dud funds with a few tens of millions invested in them. Ignore them and look at the returns of the credible funds which you might invest in.

bogleboogle

Prism said:

bogleboogle said:

Deleted_User said:

C_Mababejive said:

Linton said:

Why have you got a lot of cash lying around doing nothing?  If you need it in the < 5 year  term keep it as cash as the guarantees could be more important than the interest you would get. If you dont need it in the next 5 years or so invest it, accepting that there are no guarantees.  I believe strategic bond funds could be useful as part of a broader diversified portfolio, depending of course on your objectives.  However they are capable of moderate falls in value - Jupiter Strategeic Bond, which seems to be a relatively cautious one, dropped about 10% in March and has not quite recovered to its previous value.

Lots of cash doing nothing ...> Well the issue is that im hearing all these messages;
1)The stockmarket is heading toward the end of a long bull run/there might be a post covid crash,,,shouldi  push a big lump of money into investments at this time? if so,into what? more in my global tracker? put money into actively managed funds?

2) Bonds are no good because of the reasons stated by some in this very thread

3) savings rates seem to be rubbish all round and on top of that, id have to pay 20% income tax

Plan/Strategy? non in particular,,i keep getting paid/generating money so i seek to increase wealth because what else can you do other than give it away ?

Active funds are a good option if you can stay invested long term. Leave the headache of analysing and managing risk to the fund managers. Spread it across 4 or 5 funds that have a good track record. 

Terrible advice. Over the long-term only 2/10 active fund managers outperform the stock market. So not only will they provide inferior returns compared to an index tracker 80% of the time, they'll charge you (comparatively) extortionate rates to do so. 

Its not terrible advice at all. There are several active funds which have a simple aim of keeping up with inflation. They are not trying to beat some benchmark over a set period of time. If that was my goal I would rather use an active fund with that specific target than just hoping VLS20 or something similar will do it.
Active funds have their place. There are some good ones amongst all the dross. 

Yes, the issue is finding them is basically an exercise in guesswork. 

Albermarle

they provide inferior returns compared to an index tracker 80% of the time,

For some of us we are more concerned with what happens when the market sinks. Some managed funds coped very well with the recent downturn . High returns are not everybody's target .

Prism

bogleboogle said:

Prism said:

bogleboogle said:

Deleted_User said:

C_Mababejive said:

Linton said:

Why have you got a lot of cash lying around doing nothing?  If you need it in the < 5 year  term keep it as cash as the guarantees could be more important than the interest you would get. If you dont need it in the next 5 years or so invest it, accepting that there are no guarantees.  I believe strategic bond funds could be useful as part of a broader diversified portfolio, depending of course on your objectives.  However they are capable of moderate falls in value - Jupiter Strategeic Bond, which seems to be a relatively cautious one, dropped about 10% in March and has not quite recovered to its previous value.

Lots of cash doing nothing ...> Well the issue is that im hearing all these messages;
1)The stockmarket is heading toward the end of a long bull run/there might be a post covid crash,,,shouldi  push a big lump of money into investments at this time? if so,into what? more in my global tracker? put money into actively managed funds?

2) Bonds are no good because of the reasons stated by some in this very thread

3) savings rates seem to be rubbish all round and on top of that, id have to pay 20% income tax

Plan/Strategy? non in particular,,i keep getting paid/generating money so i seek to increase wealth because what else can you do other than give it away ?

Active funds are a good option if you can stay invested long term. Leave the headache of analysing and managing risk to the fund managers. Spread it across 4 or 5 funds that have a good track record. 

Terrible advice. Over the long-term only 2/10 active fund managers outperform the stock market. So not only will they provide inferior returns compared to an index tracker 80% of the time, they'll charge you (comparatively) extortionate rates to do so. 

Its not terrible advice at all. There are several active funds which have a simple aim of keeping up with inflation. They are not trying to beat some benchmark over a set period of time. If that was my goal I would rather use an active fund with that specific target than just hoping VLS20 or something similar will do it.
Active funds have their place. There are some good ones amongst all the dross. 

Yes, the issue is finding them is basically an exercise in guesswork. 

Lets call it an educated guess. And regardless of the disclaimers, past performance is a valuable indicator.

Audaxer

Prism said:

bogleboogle said:

Prism said:

bogleboogle said:

Deleted_User said:

C_Mababejive said:

Linton said:

Why have you got a lot of cash lying around doing nothing?  If you need it in the < 5 year  term keep it as cash as the guarantees could be more important than the interest you would get. If you dont need it in the next 5 years or so invest it, accepting that there are no guarantees.  I believe strategic bond funds could be useful as part of a broader diversified portfolio, depending of course on your objectives.  However they are capable of moderate falls in value - Jupiter Strategeic Bond, which seems to be a relatively cautious one, dropped about 10% in March and has not quite recovered to its previous value.

Lots of cash doing nothing ...> Well the issue is that im hearing all these messages;
1)The stockmarket is heading toward the end of a long bull run/there might be a post covid crash,,,shouldi  push a big lump of money into investments at this time? if so,into what? more in my global tracker? put money into actively managed funds?

2) Bonds are no good because of the reasons stated by some in this very thread

3) savings rates seem to be rubbish all round and on top of that, id have to pay 20% income tax

Plan/Strategy? non in particular,,i keep getting paid/generating money so i seek to increase wealth because what else can you do other than give it away ?

Active funds are a good option if you can stay invested long term. Leave the headache of analysing and managing risk to the fund managers. Spread it across 4 or 5 funds that have a good track record. 

Terrible advice. Over the long-term only 2/10 active fund managers outperform the stock market. So not only will they provide inferior returns compared to an index tracker 80% of the time, they'll charge you (comparatively) extortionate rates to do so. 

Its not terrible advice at all. There are several active funds which have a simple aim of keeping up with inflation. They are not trying to beat some benchmark over a set period of time. If that was my goal I would rather use an active fund with that specific target than just hoping VLS20 or something similar will do it.
Active funds have their place. There are some good ones amongst all the dross. 

Yes, the issue is finding them is basically an exercise in guesswork. 

Lets call it an educated guess. And regardless of the disclaimers, past performance is a valuable indicator.

An active fund with a good history of past performance could then have a few years of poor performance after you have invested in it. I think the difficult decision is whether to stick with these funds, or even rebalancing which will mean investing more in these funds, hoping they will come good again. 

mooneysaver

https://en.wikipedia.org/wiki/Regression_toward_the_mean

Prism

Audaxer said:

Prism said:

bogleboogle said:

Prism said:

bogleboogle said:

Deleted_User said:

C_Mababejive said:

Linton said:

Why have you got a lot of cash lying around doing nothing?  If you need it in the < 5 year  term keep it as cash as the guarantees could be more important than the interest you would get. If you dont need it in the next 5 years or so invest it, accepting that there are no guarantees.  I believe strategic bond funds could be useful as part of a broader diversified portfolio, depending of course on your objectives.  However they are capable of moderate falls in value - Jupiter Strategeic Bond, which seems to be a relatively cautious one, dropped about 10% in March and has not quite recovered to its previous value.

Lots of cash doing nothing ...> Well the issue is that im hearing all these messages;
1)The stockmarket is heading toward the end of a long bull run/there might be a post covid crash,,,shouldi  push a big lump of money into investments at this time? if so,into what? more in my global tracker? put money into actively managed funds?

2) Bonds are no good because of the reasons stated by some in this very thread

3) savings rates seem to be rubbish all round and on top of that, id have to pay 20% income tax

Plan/Strategy? non in particular,,i keep getting paid/generating money so i seek to increase wealth because what else can you do other than give it away ?

Active funds are a good option if you can stay invested long term. Leave the headache of analysing and managing risk to the fund managers. Spread it across 4 or 5 funds that have a good track record. 

Terrible advice. Over the long-term only 2/10 active fund managers outperform the stock market. So not only will they provide inferior returns compared to an index tracker 80% of the time, they'll charge you (comparatively) extortionate rates to do so. 

Its not terrible advice at all. There are several active funds which have a simple aim of keeping up with inflation. They are not trying to beat some benchmark over a set period of time. If that was my goal I would rather use an active fund with that specific target than just hoping VLS20 or something similar will do it.
Active funds have their place. There are some good ones amongst all the dross. 

Yes, the issue is finding them is basically an exercise in guesswork. 

Lets call it an educated guess. And regardless of the disclaimers, past performance is a valuable indicator.

An active fund with a good history of past performance could then have a few years of poor performance after you have invested in it. I think the difficult decision is whether to stick with these funds, or even rebalancing which will mean investing more in these funds, hoping they will come good again. 

It could yes, however its still one of the indicators I use to select a fund. As often its about seeing how well a fund performs in certain conditions like a crash, rather than using the raw numbers. My point really though is not to rule out all active funds just because the stats say most underperform. A mix might be called for, especially when the word 'perform' means something specific rather than just give me the best % return.

schiff

A positive mention in Trustnet today of the Waverton Sterling Bond. Mostly BBB and better, managed and aiming to minimise the ups and downs. Could be the alternative to current accounts paying around 1%? Any thoughts?