Lifestrategy 60 or 80 ?

Sun-Is-Fun

Why not go half way inbetween so you essentially create a VLS 70. Keep some in VLS 60 and VLS80. Blackrock mymap5 currently is just under 70% equities (but this is dynamic and can shift in allocation) if you fancy swapping to that and is currently beating the VLS for growth.

Albermarle

wiseonesomeofthetime said:

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.

Your paper returns are  dependent on exact timings of your investments . The actual performance over the last 12 months is 
VLS100  + 7.38%
VLS 80 + 4%
VLS 60 + 0.5% 
and for the last 6 months 
VLS100 -3.17%
VLS80 - 4.7%
VLS 60 - 6% 

So in a period of stock market correction , normally VLS 60 should go down less - being less risky .
However the bonds have dragged it down.

Thrugelmir

Albermarle said:

wiseonesomeofthetime said:

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.

Your paper returns are  dependent on exact timings of your investments . The actual performance over the last 12 months is 
VLS100  + 7.38%
VLS 80 + 4%
VLS 60 + 0.5% 
and for the last 6 months 
VLS100 -3.17%
VLS80 - 4.7%
VLS 60 - 6% 

So in a period of stock market correction , normally VLS 60 should go down less - being less risky .
However the bonds have dragged it down.

Interest rates are rising. That's an immediate impact on bond yields. The impact on equities is going to take longer to filter through. 

Iain_For

Thrugelmir said:

Interest rates are rising. That's an immediate impact on bond yields. The impact on equities is going to take longer to filter through. 

A timely post! 

Just my twopenneth, I get the impression investors in VLS understand the stock market component much better than the fixed interest. We often hear discussion of VLS60, 80 etc. in terms of investors wanting different weightings (less UK) or greater diversification such as small caps, commodities or property. However, I've seen very little discussion of the fixed-income component, e.g. whether the balance of duration across the bond funds is appropriate, would seem to be around 9 years but with some much longer bonds in there, the lack of any short term bond allocation within the funds, the lack of any global linkers. 

Albermarle

 I get the impression that most  investors in VLS understand the stock market component much better than the fixed interest.

I agree with your comments but with a small addendum. I include myself in that group .

Interest rates are rising. That's an immediate impact on bond yields. The impact on equities is going to take longer to filter through. 

Would it be correct to say that bonds have probably already suffered most of the drops that they are likely to suffer?

tebbins

Bond prices and yields are related mechanically. Yields, prices and interest rates are related almost mechanically.
Equity prices are implied by a multitude of investors using a multitude of decision making methods (from outright speculation to proper securities analysis) and may not be as directly, efficiently or immediately affected by current information.

Thrugelmir

Albermarle said:

 I get the impression that most  investors in VLS understand the stock market component much better than the fixed interest.

I agree with your comments but with a small addendum. I include myself in that group .

Interest rates are rising. That's an immediate impact on bond yields. The impact on equities is going to take longer to filter through. 

Would it be correct to say that bonds have probably already suffered most of the drops that they are likely to suffer?

What level are Central Banks going to end raising their rates too, that's the unknown factor for existing bond holders.

On the other side of the coin. Yields on new bond issuance will likewise adjust accordingly as the market demands higher rates.  With Central Banks adopting a long term target for inflation of 2%. Bonds for some investors may prove an attractive option as yields move higher. 

Iain_For

Albermarle said:

Would it be correct to say that bonds have probably already suffered most of the drops that they are likely to suffer?

My reading of the financial press is that interest rates still have some way to rise, hopefully without causing a recession. Interesting to compare VLS with their Target Retirement funds:

Year to Date:

VLS40 (60% bonds): -7.44%
TR2015 (69% bonds): -5.54%

However, by the time you delve the makeup of these multi-asset funds to understand performance differences of their constituent funds, you might as well spend that time putting a portfolio together that actually fits one's needs!

Albermarle

My reading of the financial press is that interest rates still have some way to rise, hopefully without causing a recession

What I read today is that the financial markets are pricing in that BofE rate will go to 2.5%, but the expectation of negative GDP growth later this year, probably means that will be a maximum and could be less. If the market has priced this in , then hopefully means bond prices should stabilise?

masonic

Albermarle said:

My reading of the financial press is that interest rates still have some way to rise, hopefully without causing a recession

What I read today is that the financial markets are pricing in that BofE rate will go to 2.5%, but the expectation of negative GDP growth later this year, probably means that will be a maximum and could be less. If the market has priced this in , then hopefully means bond prices should stabilise?

The current 10 year gilt yield is 1.85%, and prices have barely moved after today's expected result.