Vanguard - personalised service

vulcanrtb

Thanks for the feedback all. I guess you could pidgeon-hole me as a nervous investor, the pot is >700K but I don't need to touch it (drawdown) for probably 2 years, I retired in July.

I have a webchat booked with Vanguard to learn more in general, not just their personalised service.

jim8888

vulcanrtb said:

Thanks for the feedback all. I guess you could pidgeon-hole me as a nervous investor, the pot is >700K but I don't need to touch it (drawdown) for probably 2 years, I retired in July.

I have a webchat booked with Vanguard to learn more in general, not just their personalised service.

You're in a very similar situation to myself in a lot of ways. I wasn't a nervous investor at all until the day I stopped earning, stopped contributing to pensions and actually had to start drawing on the money I'd saved. Which is all sitting in a Vanguard 80/20 SIPP, at a similar level to yourself. I've just started dipping into the fund by taking some of my TFLS and it feels like a momentous step. I have other savings and investments (and pensions) and I constantly tell myself to stop worrying and try to enjoy and appreciate the position I'm in. After all, I've saved and invested over decades for exactly this moment to arrive. But I'd admit, I'm finding this very hard to do!

vulcanrtb

jim8888 said:

vulcanrtb said:

Thanks for the feedback all. I guess you could pidgeon-hole me as a nervous investor, the pot is >700K but I don't need to touch it (drawdown) for probably 2 years, I retired in July.

I have a webchat booked with Vanguard to learn more in general, not just their personalised service.

You're in a very similar situation to myself in a lot of ways. I wasn't a nervous investor at all until the day I stopped earning, stopped contributing to pensions and actually had to start drawing on the money I'd saved. Which is all sitting in a Vanguard 80/20 SIPP, at a similar level to yourself. I've just started dipping into the fund by taking some of my TFLS and it feels like a momentous step. I have other savings and investments (and pensions) and I constantly tell myself to stop worrying and try to enjoy and appreciate the position I'm in. After all, I've saved and invested over decades for exactly this moment to arrive. But I'd admit, I'm finding this very hard to do!

So you're in 80% equity, i.e. VLS80 ? I'm deciding between VLS20 or VLS40, such is my risk appetite. Yes, it's all very unnerving, but I expect in time it will just feel normal.

Albermarle

vulcanrtb said:

jim8888 said:

vulcanrtb said:

Thanks for the feedback all. I guess you could pidgeon-hole me as a nervous investor, the pot is >700K but I don't need to touch it (drawdown) for probably 2 years, I retired in July.

I have a webchat booked with Vanguard to learn more in general, not just their personalised service.

You're in a very similar situation to myself in a lot of ways. I wasn't a nervous investor at all until the day I stopped earning, stopped contributing to pensions and actually had to start drawing on the money I'd saved. Which is all sitting in a Vanguard 80/20 SIPP, at a similar level to yourself. I've just started dipping into the fund by taking some of my TFLS and it feels like a momentous step. I have other savings and investments (and pensions) and I constantly tell myself to stop worrying and try to enjoy and appreciate the position I'm in. After all, I've saved and invested over decades for exactly this moment to arrive. But I'd admit, I'm finding this very hard to do!

So you're in 80% equity, i.e. VLS80 ? I'm deciding between VLS20 or VLS40, such is my risk appetite. Yes, it's all very unnerving, but I expect in time it will just feel normal.

As you will know the non equity % of these funds is in bonds of various types.
There is a consensus that the outlook for bonds is not great, and most bond funds have gone down this year , some by as much as 8%.
So the normal assumption that VLS 20 is 'safer ' than VLS40, may well not hold true in the future .
Personally I am reasonably cautious/conservative  but in the last year I have increased my equity % a little ( despite some signs of frothiness in the stock markets , especially in the US) and reduced my bond % by more . Filling the gap with alternatives like infrastructure funds, more cash  etc.
Of course it may turn out to be a bad move but it does seem in line with general investment trends.

vulcanrtb

Albermarle said:

vulcanrtb said:

jim8888 said:

vulcanrtb said:

Thanks for the feedback all. I guess you could pidgeon-hole me as a nervous investor, the pot is >700K but I don't need to touch it (drawdown) for probably 2 years, I retired in July.

I have a webchat booked with Vanguard to learn more in general, not just their personalised service.

You're in a very similar situation to myself in a lot of ways. I wasn't a nervous investor at all until the day I stopped earning, stopped contributing to pensions and actually had to start drawing on the money I'd saved. Which is all sitting in a Vanguard 80/20 SIPP, at a similar level to yourself. I've just started dipping into the fund by taking some of my TFLS and it feels like a momentous step. I have other savings and investments (and pensions) and I constantly tell myself to stop worrying and try to enjoy and appreciate the position I'm in. After all, I've saved and invested over decades for exactly this moment to arrive. But I'd admit, I'm finding this very hard to do!

So you're in 80% equity, i.e. VLS80 ? I'm deciding between VLS20 or VLS40, such is my risk appetite. Yes, it's all very unnerving, but I expect in time it will just feel normal.

As you will know the non equity % of these funds is in bonds of various types.
There is a consensus that the outlook for bonds is not great, and most bond funds have gone down this year , some by as much as 8%.
So the normal assumption that VLS 20 is 'safer ' than VLS40, may well not hold true in the future .
Personally I am reasonably cautious/conservative  but in the last year I have increased my equity % a little ( despite some signs of frothiness in the stock markets , especially in the US) and reduced my bond % by more . Filling the gap with alternatives like infrastructure funds, more cash  etc.
Of course it may turn out to be a bad move but it does seem in line with general investment trends.

Some will wince at this and take me to task, maybe, but it's all just gambling isn't it? No matter what we do, we think we might have an inkling on the next shoe to drop. In reality, it's just a guessing game. I'll have to pass some trust to Vanguard that they will perform as well as can be hoped. I'm still undecided between VLS20 and VLS40 (or even 60), you've given me pause for thought, so thanks.

Albermarle

Some will wince at this and take me to task, maybe, but it's all just gambling isn't it? 

The shorter the time frame involved the more like gambling it is . The longer the time frame then I suppose it is still gambling, but with the odds heavily weighted in your favour .

Long-term investing: Increasing your chances of positive returns (nutmeg.com)

dunstonh

vulcanrtb said:

Albermarle said:

vulcanrtb said:

jim8888 said:

vulcanrtb said:

Thanks for the feedback all. I guess you could pidgeon-hole me as a nervous investor, the pot is >700K but I don't need to touch it (drawdown) for probably 2 years, I retired in July.

I have a webchat booked with Vanguard to learn more in general, not just their personalised service.

You're in a very similar situation to myself in a lot of ways. I wasn't a nervous investor at all until the day I stopped earning, stopped contributing to pensions and actually had to start drawing on the money I'd saved. Which is all sitting in a Vanguard 80/20 SIPP, at a similar level to yourself. I've just started dipping into the fund by taking some of my TFLS and it feels like a momentous step. I have other savings and investments (and pensions) and I constantly tell myself to stop worrying and try to enjoy and appreciate the position I'm in. After all, I've saved and invested over decades for exactly this moment to arrive. But I'd admit, I'm finding this very hard to do!

So you're in 80% equity, i.e. VLS80 ? I'm deciding between VLS20 or VLS40, such is my risk appetite. Yes, it's all very unnerving, but I expect in time it will just feel normal.

As you will know the non equity % of these funds is in bonds of various types.
There is a consensus that the outlook for bonds is not great, and most bond funds have gone down this year , some by as much as 8%.
So the normal assumption that VLS 20 is 'safer ' than VLS40, may well not hold true in the future .
Personally I am reasonably cautious/conservative  but in the last year I have increased my equity % a little ( despite some signs of frothiness in the stock markets , especially in the US) and reduced my bond % by more . Filling the gap with alternatives like infrastructure funds, more cash  etc.
Of course it may turn out to be a bad move but it does seem in line with general investment trends.

Some will wince at this and take me to task, maybe, but it's all just gambling isn't it? No matter what we do, we think we might have an inkling on the next shoe to drop. In reality, it's just a guessing game. I'll have to pass some trust to Vanguard that they will perform as well as can be hoped. I'm still undecided between VLS20 and VLS40 (or even 60), you've given me pause for thought, so thanks.

When interest rates fall and inflation is low or falling, fixed interest securities are pushed up in value and the yield reduces.    So, for the last 12-15 years, its been great holding low volatility risk assets like gilts and bonds.     
When interest rates are expected to rise and inflation is going up, the asset values of fixed interest securities falls and the yield increases.   We appear to be at the stage where the low risk stuff is more likely to lose value over the next decade.  The yield will increase and that will compensate somewhat but all indications are that the short term is likely to see short to medium term losses on 80% of your fund is you go with VLS20.

(simplified the explanation to avoid going to technical).

Thrugelmir

DoublePolaroid said:

Philosophically it’s interesting Vanguard offer this service. Their motto, given their founding and business model, might as well be if you can’t beat the market, buy the market (unless you pay us 0.5% apparently) and their USP, such as it is, is offering no frills, do-it-all-for-me investments for people who are keen to fire and forget. 

Vanguard have offered pension management services in the US for a long time. Vanguard are far removed from the boutique fund manager that Bogle created. 

vulcanrtb

dunstonh said:

vulcanrtb said:

Albermarle said:

vulcanrtb said:

jim8888 said:

vulcanrtb said:

Thanks for the feedback all. I guess you could pidgeon-hole me as a nervous investor, the pot is >700K but I don't need to touch it (drawdown) for probably 2 years, I retired in July.

I have a webchat booked with Vanguard to learn more in general, not just their personalised service.

You're in a very similar situation to myself in a lot of ways. I wasn't a nervous investor at all until the day I stopped earning, stopped contributing to pensions and actually had to start drawing on the money I'd saved. Which is all sitting in a Vanguard 80/20 SIPP, at a similar level to yourself. I've just started dipping into the fund by taking some of my TFLS and it feels like a momentous step. I have other savings and investments (and pensions) and I constantly tell myself to stop worrying and try to enjoy and appreciate the position I'm in. After all, I've saved and invested over decades for exactly this moment to arrive. But I'd admit, I'm finding this very hard to do!

So you're in 80% equity, i.e. VLS80 ? I'm deciding between VLS20 or VLS40, such is my risk appetite. Yes, it's all very unnerving, but I expect in time it will just feel normal.

As you will know the non equity % of these funds is in bonds of various types.
There is a consensus that the outlook for bonds is not great, and most bond funds have gone down this year , some by as much as 8%.
So the normal assumption that VLS 20 is 'safer ' than VLS40, may well not hold true in the future .
Personally I am reasonably cautious/conservative  but in the last year I have increased my equity % a little ( despite some signs of frothiness in the stock markets , especially in the US) and reduced my bond % by more . Filling the gap with alternatives like infrastructure funds, more cash  etc.
Of course it may turn out to be a bad move but it does seem in line with general investment trends.

Some will wince at this and take me to task, maybe, but it's all just gambling isn't it? No matter what we do, we think we might have an inkling on the next shoe to drop. In reality, it's just a guessing game. I'll have to pass some trust to Vanguard that they will perform as well as can be hoped. I'm still undecided between VLS20 and VLS40 (or even 60), you've given me pause for thought, so thanks.

When interest rates fall and inflation is low or falling, fixed interest securities are pushed up in value and the yield reduces.    So, for the last 12-15 years, its been great holding low volatility risk assets like gilts and bonds.     
When interest rates are expected to rise and inflation is going up, the asset values of fixed interest securities falls and the yield increases.   We appear to be at the stage where the low risk stuff is more likely to lose value over the next decade.  The yield will increase and that will compensate somewhat but all indications are that the short term is likely to see short to medium term losses on 80% of your fund is you go with VLS20.

(simplified the explanation to avoid going to technical).

It's a good job you simplified it, I still don't have a clue what the terms in bold are. I'm a penetration tester by trade, I tend to speak to my audience when delivering reports to lay persons, it's not easy all the time!

Anyway, I'll do further research but the trend I'm reading here is that a higher ration of equities is probably a better 'bet'.

Alexland

vulcanrtb said:

I'm still undecided between VLS20 and VLS40 (or even 60), you've given me pause for thought, so thanks.

The long term return on bonds can be mathematically calculated and at current valuations is generally now under 1% which is obviously below inflation. Equities, even at current valuations (expensive in the US but cheaper than bonds), should give you long term returns above inflation (with ups and downs along the way) and even if they fail to achieve such returns should still do better than bonds.

Obviously it depends on your drawdown strategy but I would be very concerned if you were going into a long retirement drawdown with less than 60% equities unless you for some reason accepted that inflation would materially reduce your spending power over time. So yes if you were otherwise thinking of VLS20/40 then paying for some financial advice would probably be a good use of money.