VLSx versus Global Track + cash

Ciprico

As bonds are relatively expensive and not guaranteed are products like VLS and similar really any better than
a generic low cost global tracker and keeping the low risk "percentage" as cash...
I appreciate the funds do the re-balancing for you, but I'm not really overly concerned by that...

Sailtheworld

Bonds are lower risk than cash but if your cash component is under the FSCS limit there's probably not much in it.

grumiofoundation

Sailtheworld said:

Bonds are lower risk than cash 

Are they? 

AnotherJoe

I dont like VLSx because the UK 25% skews the mix towards a few industries (some of which are quite toxic as well but thats another thing)

So in your position, and i dont have any bonds either i have cash, id use a general low cost tracker plus a small companies fund/IT  (trackers less good in that area)  plus cash, eg three portions overall. Pick your preferred ratio of the 3 that fits your risk appetite

Ciprico

Joe,  I have been considering "smaller companies" in some form, but haven't acted yet - could you share which funds/IT you like for smaller companies (and why....!)
Many Thanks

bogleboogle

Sailtheworld said:

Bonds are lower risk than cash

Well that's just not true. 

Sailtheworld

bogleboogle said:

Sailtheworld said:

Bonds are lower risk than cash

Well that's just not true. 

Government bonds I was thinking.

george4064

Sailtheworld said:

bogleboogle said:

Sailtheworld said:

Bonds are lower risk than cash

Well that's just not true. 

Government bonds I was thinking.

Even government bonds are riskier than cash. Generally speaking cash is the 'safest' way to keep wealth, and in this case I define 'safest' as 'lowest risk'.

Albermarle

Probably you could say that cash in the bank up to £85K and gilts have similar almost zero risk , as in both cases the government will pay up one way or the other .

Sailtheworld

george4064 said:

Sailtheworld said:

bogleboogle said:

Sailtheworld said:

Bonds are lower risk than cash

Well that's just not true. 

Government bonds I was thinking.

Even government bonds are riskier than cash. Generally speaking cash is the 'safest' way to keep wealth, and in this case I define 'safest' as 'lowest risk'.

I don't agree as you've got an added financial institution risk added with cash. Up to the FSCS limits there's not much potential for loss but the probability is that gilts would be more liquid and that there will be a delay in getting compensation if your bank goes bust. Keeping cash in the house to avoid holding with a bank obviously adds risk. Not much in it for small sums but for large amounts of money you may as well cut out the middle-man and buy gilts.

Cash is for spending and emergency funds.

bogleboogle

Sailtheworld said:

bogleboogle said:

Sailtheworld said:

Bonds are lower risk than cash

Well that's just not true. 

Government bonds I was thinking.

Still not true. (I) Bond yields are very low and can be negative - capital is at risk and (II) governments can default on their debts.