Vanguard LifeStrategy 80 v 60 over the next ten years minimum

Sailtheworld

If you've got cash to await a recovery in case of a crash, you wouldn't be tempted to sell and you're looking at 15 years then why not start at 100%?

Linton

I am not sure about an "imperceptible difference".....

Over the past 5 years VLS60 has averaged 9.05% annually whilst VLS80s figure is 10.96% annually.  Enthusiastic passive investors fret over 0.1% loss in charges!

Extrapolating to 10 years this gives 138% and 183% returns.

rothers

Sailtheworld said:

If you've got cash to await a recovery in case of a crash, you wouldn't be tempted to sell and you're looking at 15 years then why not start at 100%?

I did wonder about that, my ideal period would be ten years though with the ability to delay for five years if absolutely necessary. 

Prism

rothers said:

Thanks for your replies both of you, I would begin to look to take it out at ten years ideally with a five year buffer for it to recover in the case of a downturn. One thing that I am confident of is that I wouldn’t be panicked into selling in the event of a downturn, I will have enough income from my final salary pension to ride through it. 

I have read the Tim Hale book which indicates that the ideal split for that timescale is probably 60% but from what I’ve read about bonds I am tempted to go higher with equities to 80%. 

Edited to add, from reading that book it appears that most historical downturns don’t take much more than three years to recover. 

Most might not but equities could easily take 10 years or more to recover from a downturn. The question really is will bonds help that recovery much any more. Hard to know.

Thrugelmir

Prism said:

rothers said:

Thanks for your replies both of you, I would begin to look to take it out at ten years ideally with a five year buffer for it to recover in the case of a downturn. One thing that I am confident of is that I wouldn’t be panicked into selling in the event of a downturn, I will have enough income from my final salary pension to ride through it. 

I have read the Tim Hale book which indicates that the ideal split for that timescale is probably 60% but from what I’ve read about bonds I am tempted to go higher with equities to 80%. 

Edited to add, from reading that book it appears that most historical downturns don’t take much more than three years to recover. 

 The question really is will bonds help that recovery much any more. Hard to know.

Depends how high the Fed is willing to allow interest rates on Treasury stock to rise to. Suggestions that 2% or thereabouts won't be objectionable. Biden's money helicopter drop is going to require some considerable issuance of new stock. The impact will ripple out from the US. 

pat1976

Are you thinking about your portfolio as a whole here? Is this all the money you have in the world or do you have cash savings, house equity, a pension with fairly low risk investments, etc.

Also will you have more to invest over the next 10 years? Would you plan to do the same with that money, or go for lower risk?

More to think about. 

rothers

pat1976 said:

Are you thinking about your portfolio as a whole here? Is this all the money you have in the world or do you have cash savings, house equity, a pension with fairly low risk investments, etc.

Also will you have more to invest over the next 10 years? Would you plan to do the same with that money, or go for lower risk?

More to think about. 

Hi, no, it’s by no means all, we’ve got cash savings, the mortgage will be paid off in 2024 and I’ve got more in an isa. 

I have a final salary pension coming in December 2026 when I am 55 of just over £20k per annum and £140k lump sum. This is more about building up my wife’s pension which will only be around £7.5k from her employment pension. I thought that, rather than just putting it into a s&s isa we may as well take advantage of the tax relief by investing in a sipp. 

Edited to say that I will be putting a lump sum in at the start to help with compounding followed by regular monthly investments.