Lifestrategy 60 or 80 ?

eastmidsaver

Hi,
I hold about £5k in LS60 in an ISA, and I don't know why I chose it at the time, maybe because it seemed like the happy meduim.
However, I am now considering switching it to LS80, but am not sure.
I do clearly know LS80 involves a bit of extra risk. I am thinking that I should hold for at least 5 years, if not longer, and I am also considering adding more of my cash savings into the stocks and shares ISA too.
So my question is, should I consider switching to LS80?   or just leave it all in LS60?
Thanks.

masonic

You should really be prepared to hold either of those funds for a minimum of 10 years as they predominantly hold equities. The risk of a loss after 5 years is not negligible. You seem to be asking others to judge your risk tolerance, based on no information. It is really a decision for you. How do you feel about the recent performance of the two funds, and how would you feel if they carried on on this trajectory for a while longer?

eastmidsaver

thanks for your input.  yes i totally understand it is my decision.  just having a hard time deciding between the two, and will have a think about the trajectory question.

El_Torro

It really depends on how flexible you want to be in accessing the money. If you know for sure that you’re willing to wait 10 years or more then there’s an argument to say you should load up on as high a percentage of equities as possible. Assuming you can stomach the volatility. 

Personally my ISA is 60% equities. Mainly because I want the flexibility of being able to access the money whenever I want, so when equities do fall I don’t take such a big hit. I’m willing to sacrifice potentially higher long term returns for added flexibility. 

As masonic said though the principles aren’t that different whether you go with 60 or 80, a lot of it comes down to your personal circumstances and behaviour. 

MiserlyMartin

Neither. Bonds are not going to save you in an rising interest rate environment. Do you see inflation going down ? Unless there is a recession....

Thrugelmir

What’s your appetite for volatility like?  There’s a bumpy ride ahead. A new era. Nothing like you’ve experienced previously as an investor. Holding a high % of equities ideally should be for the long term if you’ve plans for the money. 

masonic

MiserlyMartin said:

Neither. Bonds are not going to save you in an rising interest rate environment. Do you see inflation going down ? Unless there is a recession....

Markets have priced in the level of inflation and interest rate rises that are anticipated. This is of course a moving target, but only unexpected rates or inflation are going to drive markets further. A recession and/or the current stockmarket correction growing into a crash, seem quite feasible outcomes at this time. Many are tightening their belts, which is not conducive to GDP growth.

wiseonesomeofthetime

After considering my options, and future spending plans, I jumped in with both feet and opted for the LS100 in April 2021.

I am in early retirement and in no way a gambler. Don't even bet on the Grand National

That particular investment performed very well, up until around Oct/Nov 2021, IIRC, before dropping due to world events (fuel then, and then Ukraine).

It currently stands at a paper return of 8.02% gain.

However, my LS80 investment in Aug 2021, is currently at a paper loss of 0.96%, and this year's investment in LS100 still (yeah, and I said I wasn't a gambler, but the plan for these are 10-15/20 year holdings) is currently at -0.72%

I say paper returns and paper loss as, of course, these figures only matter if I was to sell up today, which I do not intend to do.

Have I been too risky? Maybe, maybe not. Only time will tell. In my case though, these are not my only savings/investments, so I can afford to hold out to my plan.

As stated by others above, without knowing your circumstance, and risk tolerance, the advice you can expect from this forum will be limited, unfortunately.

At the end of the day, it is all about how much you can risk to lose, in your desire to earn a gain.

That's the world of investments, including Stocks and Shares ISAs.

If I had realised that 15 years ago, I wouldn't have cashed mine in at that time, as I panicked over seeing my savings (as I saw them) erode. I would have been more likely to hold my nerve.

Good luck, in whatever course of action you decide.

JohnWinder

Here are some reasons not to change:
Chopping and changing investments can bring ‘frictional losses’ from buy/sell spreads, broker fees, taxes and entry fees, and there may be others. When such changes are due to market timing decisions or chasing better performance in the prospective purchase, there will on average over all investors be no nett gain compared with not changing because for all the winners there must be a balancing list of losers since both groups make up the market (in addition to the ones who don’t trade and therefore can’t win or lose as a result of trading). People who chop and change must think they’ll be a winner (or why bother?), but they can’t all be right. Which would you be? With the trading winners balancing the trading losers, the sure bet winners are the financial services industry which take their cut each time. Is this where we all want some of our potential investment returns to go?
Try to find a chart or table comparing the returns of VLS 60 vs 80. Over a mid-long period I’d imagine it would be tweedle dum and tweedle dee. And for £5000, sorry if that’s disrespectful.
Finally, I don’t think anyone knows which of the two will be better for you (or anyone) in the coming 5 or 15 years. Investments can go the way soap does if you handle it/them too much.

MEM62

@eastmidsaver What is you tolerance for risk?  How long are you planning to remain invested?

I have no particular plan for the money is my S&S ISA.  (My emergency fund is in cash in a Marcus account and I am maxing out contributions to my pension fund)  I have around £50K in my S&S ISA and it is all in LS100.     

dunstonh

However, my LS80 investment in Aug 2021, is currently at a paper loss of 0.96%, and this year's investment in LS100 still (yeah, and I said I wasn't a gambler, but the plan for these are 10-15/20 year holdings) is currently at -0.72%

10 years is a on the low side for 100% equity unless you are a high risk investor.  You say you are not of that nature.
15-20 years is fine.

Have I been too risky? Maybe, maybe not. Only time will tell. In my case though, these are not my only savings/investments, so I can afford to hold out to my plan.

If you can handle losing half your investment value inside a year then you are fine.  If that would cause financial problems or behaviour problems (i.e. cashing out when down) then you have invested above your risk profile.