FT Advisor podcast on VLS range

tranquility1

Thrugelmir said:

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. 

Over the past 18 months the wealthiest people have increased their wealth by £1.3tn.  Ordinary people are poorer by £1.3tn.  This is a direct transfer of wealth from the 99% to the 1%.

And that's just till today.  It's ongoing.  And when the economies of the world stop printing money and things collapse, that £1.3tn will look like chicken feed.

MoJoeGo

...ah, yes, I'm sure the Great Reset is coming... Perhaps there will soon have to be a name for it - an equivalent to Godwin's Law, where every financial thread, if allowed to go on long enough, will end up talking about the 1 vs 99 percent?

Anyway, my fault for not keeping pace with the discussion, but TL;DR, so should I suggest to Mrs MJG that she sells her VLS80 or not? Or Little Miss MJG sell her VLS20?

Yes, obviously slightly tongue in cheek, but is there any actual consensus on there being something 'better' out there for those of us that want a simple diversified holding with an equally simple sliding scale of options for volatility...? Without getting too hung up on a few basis points either way on the fees...?

tranquility1

MoJoeGo said:

...ah, yes, I'm sure the Great Reset is coming... Perhaps there will soon have to be a name for it - an equivalent to Godwin's Law, where every financial thread, if allowed to go on long enough, will end up talking about the 1 vs 99 percent?

Anyway, my fault for not keeping pace with the discussion, but TL;DR, so should I suggest to Mrs MJG that she sells her VLS80 or not? Or Little Miss MJG sell her VLS20?

Yes, obviously slightly tongue in cheek, but is there any actual consensus on there being something 'better' out there for those of us that want a simple diversified holding with an equally simple sliding scale of options for volatility...? Without getting too hung up on a few basis points either way on the fees...?

I would have thought your mrs would have the VLS20, and the younger one the VLS80, given their timeframes.



And yes, the 1% / 99% should be discussed as it's wrong. 

aroominyork

MoJoeGo said:

Anyway, my fault for not keeping pace with the discussion, but TL;DR, so should I suggest to Mrs MJG that she sells her VLS80 or not? Or Little Miss MJG sell her VLS20?

If the MJG family is worried about the coming years, I suggest Mrs transfers her VLS80 to Miss, and Miss transfers her VLS20 to Mrs.

MoJoeGo

tranquility1 said:

MoJoeGo said:

...ah, yes, I'm sure the Great Reset is coming... Perhaps there will soon have to be a name for it - an equivalent to Godwin's Law, where every financial thread, if allowed to go on long enough, will end up talking about the 1 vs 99 percent?

Anyway, my fault for not keeping pace with the discussion, but TL;DR, so should I suggest to Mrs MJG that she sells her VLS80 or not? Or Little Miss MJG sell her VLS20?

Yes, obviously slightly tongue in cheek, but is there any actual consensus on there being something 'better' out there for those of us that want a simple diversified holding with an equally simple sliding scale of options for volatility...? Without getting too hung up on a few basis points either way on the fees...?

I would have thought your mrs would have the VLS20, and the younger one the VLS80, given their timeframes.



And yes, the 1% / 99% should be discussed as it's wrong. 

Well as you asked, the Mrs is planning to be invested through drawdown for a good 30-40 years or more God willing. Whereas the Miss is probably going to have need for funds to buy a house in 5ish years and is doing a balancing act between capital and inflation risk. 

Not saying that the 1/99 debate isn't worth having, but perhaps it's one to ring fence in its own thread...

Shocking_Blue

So...

Move some into:
Premium bonds
Wealth protection funds (CGT etc)
Cash?

Shocking_Blue

...

Or less volatile and actively managed (able to respond to market condition scenarios outlined above) funds (such as the MyMap funds)?

Thrugelmir

tranquility1 said:

Thrugelmir said:

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. 

Over the past 18 months the wealthiest people have increased their wealth by £1.3tn.  Ordinary people are poorer by £1.3tn.  This is a direct transfer of wealth from the 99% to the 1%.

Don't worry. President Biden's agenda is going to address to the imbalances that exist. 

Hexane

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.

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.

... yeah... although... not long after you posted this, UK CPI inflation fell to 2%. Possibly on its way back up to a wheelbarrows-full-of-cash style 4% 

https://www.bbc.co.uk/news/uk-58254000

tranquility1

Hexane 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.

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.

... yeah... although... not long after you posted this, UK CPI inflation fell to 2%. Possibly on its way back up to a wheelbarrows-full-of-cash style 4% 

https://www.bbc.co.uk/news/uk-58254000

Good luck with that.


Mountains of national debt and personal debt, can't move interest rates, printing money for fun, assets at ATHs.  What can possibly go wrong.