£1,000 in Vanguard LifeStrategy 100% Equity just to see if I can take the risk over 6-12 months

Alexland

Thrugelmir said:

And if very little happens. What will you then deduce from the exercise? 

It might be easier to simulate a crash if the OP just gives me £500 of their £1k now then ponders how that transaction went. I'm fairly honest so would probably give it back gradually over the next few years once I felt they had genuinely started worrying about my creditworthiness and if this whole arrangement was a stupid idea from the start...
Or maybe start smaller giving me £200 to perhaps repay slowly like Rishi is doing with my energy bill..

wiseonesomeofthetime

I put money in VLS 100 in April 2021 and it is currently +7.03%
I put more in VLS 100 in Sep 2021 and it is currently -1.50%
I put some in VLS 80 in Aug 2021 and it is currently -0.48%

My aggregate investments are currently +5.50%

Three months ago, they were topping 10%

This fluctuation was what I was expecting when I decided to invest my reserves instead of hold in paltry cash savings accounts.

My anticipated term is ~10 years, so I am not worried in the slightest.

I mention this as this is based now on 10 months from my original investment.

OP. As others have said, "testing" to see what returns you may get in the future is futile IMO as world factors change.

The unrest around Russia and Ukraine is making the stock market uneasy and so fairly volatile. If Russia invades, expect more volatility. There are of course plenty of other external factors that have an effect on the stock market too.

Only invest what you may be comfortable to lose, or at least lose a large proportion from. Nothing is guaranteed.

I am lucky. I own my own home outright, have a good pension, and a comfortable amount of cash and tax-free savings.
That is how I justify my new-found willingness for an element of risk investing.

Phantom151

I think I get where OP is coming from. For all the seasoned investors, you know what it feels like when your investments have lost a sizable chunk. Newbies, while they theoretically know it could happen, don't know what it feels like when it actually does. I've seen some of mine drop considerably and it is a terrible feeling in the beginning but when you see them rise again it feels better.

I think it is an exercise in seeing if they can cope with the highs and lows of investing. It isn't for everyone regardless of whether they can afford to lose what they put in or not.

ColdIron

Phantom151 said:

Newbies, while they theoretically know it could happen, don't know what it feels like when it actually does.

But in this case it is known

I am learning since crystalizing losses during covid market decline.

A 100% equity allocation is too high for most investors. If the OP panicked at a short sharp drop I think it's reasonable to conclude that it is too high for them

Would you learn to cross the road with a 'try it and see' approach?

Phantom151

ColdIron said:

Phantom151 said:

Newbies, while they theoretically know it could happen, don't know what it feels like when it actually does.

But in this case it is known

I am learning since crystalizing losses during covid market decline.

A 100% equity allocation is too high for most investors. If the OP panicked at a short sharp drop I think it's reasonable to conclude that it is too high for them

Would you learn to cross the road with a 'try it and see' approach?

I missed that bit. Maybe there is regret at selling up and seeing if they can stand the heat? We've all done things in the past we wish we hadn't when it comes to investing. I'm currently sitting on a few substantial losses but not too bothered as I'm fairly sure they'll work out in the end but if they don't then so be it.

adindas

original1 said:

I have put in £1,000 in Vanguard LifeStrategy 100% Equity (Accum) just to see if I can take the risk over 6-12months. I tend to check fund values, stock market performance more often than I know I should. Just a bad habit... No more to be added to the initial £1000.

I will see if I can handle the ups and downs even though on a smaller scale than others.

I fail to see the point of this exercise. Let alone it will take 6-12 months. In 12 month high probability the environment might change from bear market to bull market.

If you have decided to use VLS and only want to see how many percentages of equity you want, could you not just plot both VL100% equity and the one vs VL80%/VL60% for instance (e.g  equityyou want)

Plot it over a reasonably long period and compare and see that is what you are looking for ??

In general, People will react differently seeing their money drop £30k of £100k (for instance) compared to seeing their money dropping £300 of £1000 anyway. But percentage wise is the same e.g., it is down 30%

If you have decided to use VLS and only want to see how many percentages of equity you want, I would rather choose VL100% rather than 80% equity. I will put that 20% in regular saving account, a few are paying 2-3% the low paying rate RSA is now starting increasing their interest.

Also it is more flexible, the one which is not flexible you could plan it so each month you will get at least one of them are maturing, so you could use the cash anytime if you need it.

Thrugelmir

wiseonesomeofthetime said:

The unrest around Russia and Ukraine is making the stock market uneasy and so fairly volatile. If Russia invades, expect more volatility. There are of course plenty of other external factors that have an effect on the stock market too.

A curved ball thrown such as a recession in the USA would really put the cat amongst the pidgeons. China is shifting it's internal agenda towards for prosperity for all. It's global influence continues to grow. 

Thrugelmir

Phantom151 said:

I think I get where OP is coming from. For all the seasoned investors, you know what it feels like when your investments have lost a sizable chunk. Newbies, while they theoretically know it could happen, don't know what it feels like when it actually does. I've seen some of mine drop considerably and it is a terrible feeling in the beginning but when you see them rise again it feels better.

Recovery can take a long time. Other markets will perform better than the ones you hold. Time drifts away. Relying on academically constructed historic data is a dangerous basis to convince oneself that holding a portfolio with an extremely high equity % is wise. 

Phantom151

Thrugelmir said:

Phantom151 said:

I think I get where OP is coming from. For all the seasoned investors, you know what it feels like when your investments have lost a sizable chunk. Newbies, while they theoretically know it could happen, don't know what it feels like when it actually does. I've seen some of mine drop considerably and it is a terrible feeling in the beginning but when you see them rise again it feels better.

Recovery can take a long time. Other markets will perform better than the ones you hold. Time drifts away. Relying on academically constructed historic data is a dangerous basis to convince oneself that holding a portfolio with an extremely high equity % is wise. 

It can take a long time but if you sell up every time a share drops then you are guranteed to lose out. It is more about learning about your appetite for risk than anything else. If you are a panicer by nature then self-managing is probably not the best option.

SeniorSam

Having just done this, you may do well with the overall markets having gone down in the last month or so. I did this with a larger amount 3 months ago and even though the drop has happened, I fully expect it to come back up eventually.

The problem with investing in stocks or better still in funds with the much wider spread, is just when you need the money as if you say 6-12 months and this is fixed, then it is far more of a gamble. If however, that 6-12 months is more elastic, then you are in a better position. If the market does happen to be down when you need the money, then you know the risk.

Personally, I like this fund as well as the Vanguard All Market Global fund and believe that in the long run they will be a good place to be in.

We all say don't keep checking the performance, but its human nature for most of us to do this. The situation in the Ukraine does not help, but once it is sorted out, markets should recover.