Time to take the xmas plunge- Vanguard LS 80 to LS 100?

GeoffTF

MX5huggy said:

I don’t use LS, I don’t want the UK bias and think the fee is a bit high, you can build your own version using the funds in LS for lower fees. 

Having said that if you want to move towards LS100 you don’t have to do it in in one go. Maybe just put all new money in LS100 when you have 50% in each you will basically have LS90. 

Until the prices move. The OP thought that LS 80 was fine last year. What has changed? Chopping and changing does not help. Nobody knows the future. Over thinking does not help. All you can do is buy a sensible investment. You could do better, but you are probably better to concentrate of making more money and controlling your expenditure. LS 80 appears sensible for you from what we know. LS 100 may be too risky. LS 60 is the most popular option, but perhaps you do not need to be that cautious.

Vet

GeoffTF said:

MX5huggy said:

I don’t use LS, I don’t want the UK bias and think the fee is a bit high, you can build your own version using the funds in LS for lower fees. 

Having said that if you want to move towards LS100 you don’t have to do it in in one go. Maybe just put all new money in LS100 when you have 50% in each you will basically have LS90. 

Until the prices move. The OP thought that LS 80 was fine last year. What has changed? Chopping and changing does not help. Nobody knows the future. Over thinking does not help. All you can do is buy a sensible investment. You could do better, but you are probably better to concentrate of making more money and controlling your expenditure. LS 80 appears sensible for you from what we know. LS 100 may be too risky. LS 60 is the most popular option, but perhaps you do not need to be that cautious.

Basically I feel I can increase my risk tolerance. I don't need to touch the money for 20+ years so in order to maximise returns (hopefully!) then I think taking this higher risk LS100 until 35ish, followed by LS80 for a further 10-15 years?

lozzy1965

Risk is personal.  Nothing wrong with 100% equities for life for me.  My target is to ensure that I have plenty of buffer funds in place to cope with any dips.  I am lucky enough to have a small final salary pension that will mean I won't starve.  The state pension will be a nice bonus when I hit that age but I hope/plan for my investments to give me the luxury on top of that and then some.  I believe that if I didn't have the final salary pension I would still be looking to do the same.  If I didn't have the buffer funds in place I might be more cautious.

Albermarle

Vet said:

older_and_no_wiser said:

Okay I'll risk being shot down in flames, but if you leave your investment in a 100% equity fund for a 30  year period then I would say there's a very good chance that it will outperform any 80/20 fund. I doubt there's any 30 year period in history that this hasn't been the case. Yes, past performance is no guarantee of the future.

The other point to make is that there could be 'better' (more diverse) 100% equity funds than LifeStrategy - as it has that UK bias. 

I appreciate the help - whats your view on rebalancing e.g. 80/60/40 etc?

Alexland said:

It's not so much about your age as when you might spend the money.

For example is this money needed in the short to medium term towards the house deposit?

If this money is not needed until retirement would it be more efficient contributing more into a pension?

I have a workplace pension but our work only contributes the minimum. I have a separate LISA for a house deposit. I doubt i'll need the money for at least 20 years but I may use it to fund an earlier retirement rather than wait till 55+

The fact that your employer only contributes the minimum , does not stop you contributing more than the minimum .
Investing in a pension is more tax beneficial than investing in a S&S ISA ( by a minimum 6.25% but can be more in certain circumstances) . Although the downside is as you identified that the money is not available until your late Fifties.
If you ever change jobs, try and find a more generous employer !
Also make sure you keep an eye on your pension investments as well as the ISA ones.

25_Years_On

Vet said:

Basically I feel I can increase my risk tolerance.

When I started investing, which wasn't that long ago just a few years, I went with a split between VLS60 and VLS40. However after a while my risk tolerance increased and I switched all into VLS60. This year new investment has gone into VLS80. The bonds might be a defence (until they crash of course) but they are also a drag, I think considering your time frame, which is far longer than mine, you're better off without the drag.

Alice_Holt

I would suggest that allocation has as much to do with your own investing psychology.
The advantage of a more balanced allocation is that you may be less likely to panic during stock market crashes of 40% / 50%, etc.
If you move into 100% equities,  dis-invest during a crash, re-invest after markets recover then you will certainly be worse off than sticking with a more balanced portfolio during volatile market moments:
   https://www.fidelity.com/viewpoints/investing-ideas/six-tips  (Tip 3).

How do you think you might react to a 40% / 50% market correction / crash ?

A time scale of 20 + years points towards using a pension wrapper, and availing yourself of the tax relief benefits.
Are you a higher tax payer (or likely to be in the future) ?

Vet

Alice_Holt said:

I would suggest that allocation has as much to do with your own investing psychology.
The advantage of a more balanced allocation is that you may be less likely to panic during stock market crashes of 40% / 50%, etc.
If you move into 100% equities,  dis-invest during a crash, re-invest after markets recover then you will certainly be worse off than sticking with a more balanced portfolio during volatile market moments:
   https://www.fidelity.com/viewpoints/investing-ideas/six-tips  (Tip 3).

How do you think you might react to a 40% / 50% market correction / crash ?

A time scale of 20 + years points towards using a pension wrapper, and availing yourself of the tax relief benefits.
Are you a higher tax payer (or likely to be in the future) ?

I would continue to invest - it's basically just a big sale! 
I'm currently a higher tax payer - I am also looking to increase my pension contributions.  

Alice_Holt

Vet said:

Alice_Holt said:

I would suggest that allocation has as much to do with your own investing psychology.
The advantage of a more balanced allocation is that you may be less likely to panic during stock market crashes of 40% / 50%, etc.
If you move into 100% equities,  dis-invest during a crash, re-invest after markets recover then you will certainly be worse off than sticking with a more balanced portfolio during volatile market moments:
   https://www.fidelity.com/viewpoints/investing-ideas/six-tips  (Tip 3).

How do you think you might react to a 40% / 50% market correction / crash ?

A time scale of 20 + years points towards using a pension wrapper, and availing yourself of the tax relief benefits.
Are you a higher tax payer (or likely to be in the future) ?

I would continue to invest - it's basically just a big sale! 
I'm currently a higher tax payer - I am also looking to increase my pension contributions.  

        Then investing within a pension wrapper now rather than an ISA is sensible.  

barnstar2077

You may want to investigate Vanguard's FTSE Global All Cap fund, it is very similar to VLS100, but has a more accurate allocation to the UK. 

Vet

barnstar2077 said:

You may want to investigate Vanguard's FTSE Global All Cap fund, it is very similar to VLS100, but has a more accurate allocation to the UK. 

I've had a look at this just now - very interesting!  This might actually be more appropriate than the LS100. Thank you for the help!