FT Advisor podcast on VLS range

tranquility1

Deleted_User said:

The point of raising interest rates is supposed to be to curb excessive enthusiasm, and after a long period of historically low rates, many borrowers are so used to low rates that quite a small interest rate rise will cause quite a lot of pain. Norman Lamont once said "No pain, no gain" about the use of interest rate rises to reign in the economy; but today there would be no question of raising interest rates to the levels of his day to reach to the "pain".

This idea that high-quality bonds (like those in VLS) could fall 20-40% over 3-5 years is simply implausible. Central banks have no reason to raise rates by the kind of amount that would lead to such large falls.

It just seems like more of the last decade's repeated assertions that the bull market in bonds is now over. I expect to hear the same predictions for at least another decade before it happens

Personally, I do like to hold a little cash, as well as equities and bonds, but not gold. Cash is likely to return a bit less than bonds, as is usually the case, which is why I wouldn't hold too much of it. For rebalancing alpha, long-term high-quality bonds and gold both tend to help; which is a reason that bonds have some value in addition to their stand-alone expected return. Holding a little gold is defensible - perhaps a matter of taste - but I would caution against going too far.

As you say, the BoE can't raise interest rates as that would be too painful.  They also can't lower interest rates as they are already at almost 0%.  

So the BoE are now at the stage where the only control lever they have left is to print more money.  And we are now £2.2tn in debt.


I am curious as to why so few people think this is utterly unsustainable and is a house of cards waiting to fall down.


When the house of cards does fall I am sure everybody on this board will say "of course that was going to happen! It was obvious!".   Yet people are not saying that.


What exactly do you think will happen in the near future?  Just keep printing money and then economy just chugs along nicely?




Also, the reason rates may be raised (and therefore crash the market, bonds, and the housing market) is runaway inflation.  And that's exactly what printing money like it's going out of fashion does.  That's where we are headed.

Albermarle

You can debate the merits of the 20/40/60/80/100 gaps vs say BlackRock mymap or Halifax Global Strategy,

just for the record , it is HSBC who offer the Global Strategy multi asset funds 

Thrugelmir

tranquility1 said:

Deleted_User said:

The point of raising interest rates is supposed to be to curb excessive enthusiasm, and after a long period of historically low rates, many borrowers are so used to low rates that quite a small interest rate rise will cause quite a lot of pain. Norman Lamont once said "No pain, no gain" about the use of interest rate rises to reign in the economy; but today there would be no question of raising interest rates to the levels of his day to reach to the "pain".

This idea that high-quality bonds (like those in VLS) could fall 20-40% over 3-5 years is simply implausible. Central banks have no reason to raise rates by the kind of amount that would lead to such large falls.

It just seems like more of the last decade's repeated assertions that the bull market in bonds is now over. I expect to hear the same predictions for at least another decade before it happens

Personally, I do like to hold a little cash, as well as equities and bonds, but not gold. Cash is likely to return a bit less than bonds, as is usually the case, which is why I wouldn't hold too much of it. For rebalancing alpha, long-term high-quality bonds and gold both tend to help; which is a reason that bonds have some value in addition to their stand-alone expected return. Holding a little gold is defensible - perhaps a matter of taste - but I would caution against going too far.

As you say, the BoE can't raise interest rates as that would be too painful.  

BOE's remit is clear.  Pain unfortunately is inevitable for those dependent on low interest rates.

tebbins

EdSwippet said:

tebbins said:
...

Index funds are in a way the ultimate active fund ...

Seriously?

For the reasons I explained... and I said "in a way". If you disagree then present a counter-argument.

tranquility1

Thrugelmir said:

tranquility1 said:

Deleted_User said:

The point of raising interest rates is supposed to be to curb excessive enthusiasm, and after a long period of historically low rates, many borrowers are so used to low rates that quite a small interest rate rise will cause quite a lot of pain. Norman Lamont once said "No pain, no gain" about the use of interest rate rises to reign in the economy; but today there would be no question of raising interest rates to the levels of his day to reach to the "pain".

This idea that high-quality bonds (like those in VLS) could fall 20-40% over 3-5 years is simply implausible. Central banks have no reason to raise rates by the kind of amount that would lead to such large falls.

It just seems like more of the last decade's repeated assertions that the bull market in bonds is now over. I expect to hear the same predictions for at least another decade before it happens

Personally, I do like to hold a little cash, as well as equities and bonds, but not gold. Cash is likely to return a bit less than bonds, as is usually the case, which is why I wouldn't hold too much of it. For rebalancing alpha, long-term high-quality bonds and gold both tend to help; which is a reason that bonds have some value in addition to their stand-alone expected return. Holding a little gold is defensible - perhaps a matter of taste - but I would caution against going too far.

As you say, the BoE can't raise interest rates as that would be too painful.  

BOE's remit is clear.  Pain unfortunately is inevitable for those dependent on low interest rates.

Pain is inevitable for the vast majority of people.  We are about to get stitched up again.

But the wealthiest people with not only preserve their wealth.  They will get even more wealthy.  Again.

Thrugelmir

tranquility1 said:

Thrugelmir said:

tranquility1 said:

Deleted_User said:

The point of raising interest rates is supposed to be to curb excessive enthusiasm, and after a long period of historically low rates, many borrowers are so used to low rates that quite a small interest rate rise will cause quite a lot of pain. Norman Lamont once said "No pain, no gain" about the use of interest rate rises to reign in the economy; but today there would be no question of raising interest rates to the levels of his day to reach to the "pain".

This idea that high-quality bonds (like those in VLS) could fall 20-40% over 3-5 years is simply implausible. Central banks have no reason to raise rates by the kind of amount that would lead to such large falls.

It just seems like more of the last decade's repeated assertions that the bull market in bonds is now over. I expect to hear the same predictions for at least another decade before it happens

Personally, I do like to hold a little cash, as well as equities and bonds, but not gold. Cash is likely to return a bit less than bonds, as is usually the case, which is why I wouldn't hold too much of it. For rebalancing alpha, long-term high-quality bonds and gold both tend to help; which is a reason that bonds have some value in addition to their stand-alone expected return. Holding a little gold is defensible - perhaps a matter of taste - but I would caution against going too far.

As you say, the BoE can't raise interest rates as that would be too painful.  

BOE's remit is clear.  Pain unfortunately is inevitable for those dependent on low interest rates.

Pain is inevitable for the vast majority of people.  We are about to get stitched up again.

But the wealthiest people with not only preserve their wealth.  They will get even more wealthy.  Again.

The wealthy moved offshore a long time ago. 

Albermarle

Thrugelmir said:

tranquility1 said:

Thrugelmir said:

tranquility1 said:

Deleted_User said:

The point of raising interest rates is supposed to be to curb excessive enthusiasm, and after a long period of historically low rates, many borrowers are so used to low rates that quite a small interest rate rise will cause quite a lot of pain. Norman Lamont once said "No pain, no gain" about the use of interest rate rises to reign in the economy; but today there would be no question of raising interest rates to the levels of his day to reach to the "pain".

This idea that high-quality bonds (like those in VLS) could fall 20-40% over 3-5 years is simply implausible. Central banks have no reason to raise rates by the kind of amount that would lead to such large falls.

It just seems like more of the last decade's repeated assertions that the bull market in bonds is now over. I expect to hear the same predictions for at least another decade before it happens

Personally, I do like to hold a little cash, as well as equities and bonds, but not gold. Cash is likely to return a bit less than bonds, as is usually the case, which is why I wouldn't hold too much of it. For rebalancing alpha, long-term high-quality bonds and gold both tend to help; which is a reason that bonds have some value in addition to their stand-alone expected return. Holding a little gold is defensible - perhaps a matter of taste - but I would caution against going too far.

As you say, the BoE can't raise interest rates as that would be too painful.  

BOE's remit is clear.  Pain unfortunately is inevitable for those dependent on low interest rates.

Pain is inevitable for the vast majority of people.  We are about to get stitched up again.

But the wealthiest people with not only preserve their wealth.  They will get even more wealthy.  Again.

The wealthy moved offshore a long time ago. 

Like James Dyson and Jim Ratcliffe . Supported Brexit and then promptly left the country for tax reasons.

tranquility1

Thrugelmir said:

tranquility1 said:

Thrugelmir said:

tranquility1 said:

Deleted_User said:

The point of raising interest rates is supposed to be to curb excessive enthusiasm, and after a long period of historically low rates, many borrowers are so used to low rates that quite a small interest rate rise will cause quite a lot of pain. Norman Lamont once said "No pain, no gain" about the use of interest rate rises to reign in the economy; but today there would be no question of raising interest rates to the levels of his day to reach to the "pain".

This idea that high-quality bonds (like those in VLS) could fall 20-40% over 3-5 years is simply implausible. Central banks have no reason to raise rates by the kind of amount that would lead to such large falls.

It just seems like more of the last decade's repeated assertions that the bull market in bonds is now over. I expect to hear the same predictions for at least another decade before it happens

Personally, I do like to hold a little cash, as well as equities and bonds, but not gold. Cash is likely to return a bit less than bonds, as is usually the case, which is why I wouldn't hold too much of it. For rebalancing alpha, long-term high-quality bonds and gold both tend to help; which is a reason that bonds have some value in addition to their stand-alone expected return. Holding a little gold is defensible - perhaps a matter of taste - but I would caution against going too far.

As you say, the BoE can't raise interest rates as that would be too painful.  

BOE's remit is clear.  Pain unfortunately is inevitable for those dependent on low interest rates.

Pain is inevitable for the vast majority of people.  We are about to get stitched up again.

But the wealthiest people with not only preserve their wealth.  They will get even more wealthy.  Again.

The wealthy moved offshore a long time ago. 

I don't know which shore you are talking about.  I am talking about the billionaires hoovering up the wealth of the masses.  Internationally.  Just as they have done for the past 18 months.

Thrugelmir

Albermarle said:

Thrugelmir said:

tranquility1 said:

Thrugelmir said:

tranquility1 said:

Deleted_User said:

The point of raising interest rates is supposed to be to curb excessive enthusiasm, and after a long period of historically low rates, many borrowers are so used to low rates that quite a small interest rate rise will cause quite a lot of pain. Norman Lamont once said "No pain, no gain" about the use of interest rate rises to reign in the economy; but today there would be no question of raising interest rates to the levels of his day to reach to the "pain".

This idea that high-quality bonds (like those in VLS) could fall 20-40% over 3-5 years is simply implausible. Central banks have no reason to raise rates by the kind of amount that would lead to such large falls.

It just seems like more of the last decade's repeated assertions that the bull market in bonds is now over. I expect to hear the same predictions for at least another decade before it happens

Personally, I do like to hold a little cash, as well as equities and bonds, but not gold. Cash is likely to return a bit less than bonds, as is usually the case, which is why I wouldn't hold too much of it. For rebalancing alpha, long-term high-quality bonds and gold both tend to help; which is a reason that bonds have some value in addition to their stand-alone expected return. Holding a little gold is defensible - perhaps a matter of taste - but I would caution against going too far.

As you say, the BoE can't raise interest rates as that would be too painful.  

BOE's remit is clear.  Pain unfortunately is inevitable for those dependent on low interest rates.

Pain is inevitable for the vast majority of people.  We are about to get stitched up again.

But the wealthiest people with not only preserve their wealth.  They will get even more wealthy.  Again.

The wealthy moved offshore a long time ago. 

Like James Dyson and Jim Ratcliffe . Supported Brexit and then promptly left the country for tax reasons.

Branson has lived on Necker Island in the British Virgin Islands since 1978. Hasn't stopped him being a major donor to the Labour party.  Champagne socialism you might say. 

Thrugelmir

tranquility1 said:

Thrugelmir said:

tranquility1 said:

Thrugelmir said:

tranquility1 said:

Deleted_User said:

The point of raising interest rates is supposed to be to curb excessive enthusiasm, and after a long period of historically low rates, many borrowers are so used to low rates that quite a small interest rate rise will cause quite a lot of pain. Norman Lamont once said "No pain, no gain" about the use of interest rate rises to reign in the economy; but today there would be no question of raising interest rates to the levels of his day to reach to the "pain".

This idea that high-quality bonds (like those in VLS) could fall 20-40% over 3-5 years is simply implausible. Central banks have no reason to raise rates by the kind of amount that would lead to such large falls.

It just seems like more of the last decade's repeated assertions that the bull market in bonds is now over. I expect to hear the same predictions for at least another decade before it happens

Personally, I do like to hold a little cash, as well as equities and bonds, but not gold. Cash is likely to return a bit less than bonds, as is usually the case, which is why I wouldn't hold too much of it. For rebalancing alpha, long-term high-quality bonds and gold both tend to help; which is a reason that bonds have some value in addition to their stand-alone expected return. Holding a little gold is defensible - perhaps a matter of taste - but I would caution against going too far.

As you say, the BoE can't raise interest rates as that would be too painful.  

BOE's remit is clear.  Pain unfortunately is inevitable for those dependent on low interest rates.

Pain is inevitable for the vast majority of people.  We are about to get stitched up again.

But the wealthiest people with not only preserve their wealth.  They will get even more wealthy.  Again.

The wealthy moved offshore a long time ago. 

I don't know which shore you are talking about.  I am talking about the billionaires hoovering up the wealth of the masses.  Internationally.  Just as they have done for the past 18 months.

The businessess they built are worth more. They haven't hoovered up money as such. As a consumer you have a choice not to use their companies services or products.