How risky is risky?

baggins11

Yes I did consider the target range but was put off by people saying they start too high risk and end too low risk for most people. I was considering one that goes later than my retirement target though eg 2045 as I understand you don't have to pick the one with your actual retirement date.

Albermarle

baggins11 said:

Yes I did consider the target range but was put off by people saying they start too high risk and end too low risk for most people. I was considering one that goes later than my retirement target though eg 2045 as I understand you don't have to pick the one with your actual retirement date.

They do not really start off too high risk ( although could be for people with a low risk tolerance ) but they start to slowly derisk a long way out from retirement ( > 20 years ) and a few years after retirement they are down to 30% equity which is lower than usually recommended for a drawdown pot.

Thrugelmir

baggins11 said:

Yes I did consider the target range but was put off by people saying they start too high risk and end too low risk for most people. I was considering one that goes later than my retirement target though eg 2045 as I understand you don't have to pick the one with your actual retirement date.

They are just a self adjusting version of the VLS range. One has to chose something that suits ones self. Not be swayed by others that may have totally different circumstances and objectives. I've never seen such a high level of risk taking in all my years of investing. Risks comes in many forms. Far more than many appreciate. It's as if there these's a cult of believers in a flat earth. Ultimately the majority of investors learn from the hard reality of a negative personal experience. 

dunstonh

I've never seen such a high level of risk taking in all my years of investing.

There are a lot of people in for a shock. Especially when interest rates rise again.   Decades with flat markets where yield is the only return....

Albermarle

dunstonh said:

I've never seen such a high level of risk taking in all my years of investing.

There are a lot of people in for a shock. Especially when interest rates rise again.   Decades with flat markets where yield is the only return....

That's cheered me up, especially the 'decades' bit ....
Maybe we all have to become gold bugs .

dunstonh

Albermarle said:

dunstonh said:

I've never seen such a high level of risk taking in all my years of investing.

There are a lot of people in for a shock. Especially when interest rates rise again.   Decades with flat markets where yield is the only return....

That's cheered me up, especially the 'decades' bit ....
Maybe we all have to become gold bugs .

Continuing the mood....
Gold didn't move much in price for over 30 years and, of course, doesn't pay any income.     If you have savings accounts paying 6-7% gold will be less attractive.  Indeed, it would probably start to unwind its gains made from the credit crunch.  

baggins11

I am now wondering if I would be better putting a small amount going forward into a global equity fund.  I looked on Vanguard and there seem to be lots of confusing options!  Is there a good all round option to go for?? Are some more risky than others?

Basically I am thinking I will put maybe £50 per month of my £250 contribution into the global tracker and £200 into the LS60 going forward.  I understand the global equity fund might be volatile but I would view it as a nice little extra that might or might not pay off in the long run.

I have heard a few people mention the HSBC global tracker but I just want one pension with vanguard to make things straightforward.  

I have had another look at the retirement target fund but I just don't think its for me.  I don't like the idea of withdrawing from shares in a market crash situation although I guess the withdrawal into bonds is a very slow process.  I just think I want more say in my pension going forward after ignoring it for so long!

Anyway any pointers regarding the global equity funds would be really useful.

dunstonh

 Is there a good all round option to go for?

If you are going to do that, you may as well increase the amount you put in VLS80 as that achieves the same thing.

 Are some more risky than others?

yes

Basically I am thinking I will put maybe £50 per month of my £250 contribution into the global tracker and £200 into the LS60 going forward.  I understand the global equity fund might be volatile but I would view it as a nice little extra that might or might not pay off in the long run.

So, effectively you are still creating a hybrid VLS somewhere between 60% and 100%.  I haven't got the calculator out but it would be about VLS 84.  So, why not just use VLS80?

I have heard a few people mention the HSBC global tracker but I just want one pension with vanguard to make things straightforward.  

This is a limitation of using a restricted provider rather than a whole of market provider.  Maybe you should look at a whole of market provider instead so you avoid this issue.

baggins11

OK thanks Dunstonh, so the thing I keep getting back to is my questions seem to leave me with more questions.

I am going to hang fire on making any changes until I develop more understanding I think. I do think my money is in an OK place at the moment so I will take some time to learn more before I start tinkering with it more.

Thanks again everyone for the input.