40-60% Funds Worried

masonic

aroominyork said:

masonic said:

Personally, I'm getting all of my inflation linked bond exposure through wealth preservation funds at the moment, and none of that was currency hedged at the time of last checking (but a significant part is from short-dated UK index linked gilts).

Interesting. I assumed CGT, as a fund with low volatility as its core mission, hedged its bonds. Are you certain they are unhedged? (Thrugelmir will be very upset I didn't know what was under the bonnet of my investments!)

I'm fairly confident. A hedged fund will detail the hedging contracts in its full list of holdings, which CGT does not. Further evidence is the currency exposure listed in the factsheet for the fixed interest portion.

When a fund is holding even 20% equities, but will hold foreign property securities and infrastructure funds making up another 20%, volatility introduced by currency fluctuations is probably not material, while over the long term, hedging will tend to be a drag on performance unless there is a secular shift in exchange rate.

bostonerimus

Linton said:

ChainsawCharlie said:

GazzaBloom said:

aroominyork said:

You are so emotional and panicky that you need to find an index fund that meets your risk tolerance and learn to leave it alone. If there was one house I would want for actively managing mid-risk multi-asset funds it would be Royal London, but you see them as diseased. The diversified fund is about 57% equities; over the last five years it has outperformed VLS60; you mustn't be thrown by a small recent dip.

@aroominyork sorry to derail with a sidebar but what software/platform are you using for the funds analysis shown above, it looks good and I don't recognise it?

And aroominyorks opening insult offended me too, I'm a newcomer to investing, and have my lifesaving invested, with no further income, uncalled for remark

Putting aside the way in which it was expressed, there is an important point in aroomininyork's comment.  Getting a good night's sleep is more important than maximising returns.  If you find that the volatility is too unsettling to ignore, reduce the volatility.

The way I and it would seem many other retired people handle the problem of volatility in our life savings  is to hold a significant amount of cash or other assets that you are confident will still be there in 5-10 years time.  Regard it as a separate portfolio. You know that whatever happens in the short-medium term will not disrupt your day to day life.  Rely on equity only for long term inflation protection.  What happens to it in the short/medim term is totally irrelevent and the occasional 30% fall in the equity portfolio can be handled with a shrug of the shoulders.

Agreed. Retirement should be a time to enjoy yourself and that’s difficult if you are constantly worrying about your investments. So you need a solid holistic plan that includes state pension, maybe an annuity, control over your spending and a sensible asset allocation that lets you sleep at night. It’s easy to think about things too much and you need to understand that there are some things you just can’t know or control. So control the things that you can, like what you spend and your high level asset allocation and chill out.

Eschatologist

ChainsawCharlie said:

A very good point, unfortunately this is the legacy I have been left with following my poor choice of an idiot IFA , who I have now sacked.
I would like nothing more to sell it all down and place everything into VLS , but my portfolio is currently down in value by approx £5000 and I am bothered I would crystallise the loss, but in my novice opinion maybe I wouldn't make such a loss, because if I did sell down and reinvest the proceeds back into VLS then I would also be buying at a lower price.....or is this inaccurate and too simplistic?

I guess that's something you need to figure out you would be happy to do.

If you sold both Liontrust MA Passive Interm Passive S Acc and Royal London Sustainable Div C Acc that would give you £18637 which buy you 85 units of Vanguard Lifestrategy 60% (£218 at today's price). if VLS 60% goes back up to the all time highs at the end of last year (£237) that would be worth £20,900 giving you a return of £2263.

Maybe the best thing to do is wait until things recover before re-balancing.

masonic

Eschatologist said:

Maybe the best thing to do is wait until things recover before re-balancing.

Sounds dangerously like trying to time the market to me.

Eschatologist

BTW Royal London Sustainable Div C Ac total fee is 0.93% as it has a transaction cost of 0.16%.

Iain_For

JohnWinder said:

Nice thought. It invokes Bernstein’s idea of a liability matching ‘portfolio’; safe assets to address spending needs, with an ‘at risk’ portfolio for money left over.
But that aside, how should investing for and in retirement differ if one considers the essential elements of: #1 take as much risk as is appropriate for you, #2 factor in your spending horizon (or ‘duration’), have the appropriate amount of liquidity for your stage?  
What’s missing, and do any not apply to investing for and in?

It's probably as much a state of mind. In my 40s I was not too concerned about wealth preservation and taxation as I didn't have that much amassed wealth and happy to take risk. From the perspective of having a guaranteed minimum pension then I think it is fundamentally about having clear investment goals: short term liquidity for the enjoyment of retirement, medium term wealth preservation and longer term growth for enjoyment/health/care or inheritance (whichever comes first!). Not that different, perhaps, but the balance is quite different.

bostonerimus

ChainsawCharlie said:

bostonerimus said:

Linton said:

ChainsawCharlie said:

GazzaBloom said:

aroominyork said:

You are so emotional and panicky that you need to find an index fund that meets your risk tolerance and learn to leave it alone. If there was one house I would want for actively managing mid-risk multi-asset funds it would be Royal London, but you see them as diseased. The diversified fund is about 57% equities; over the last five years it has outperformed VLS60; you mustn't be thrown by a small recent dip.

@aroominyork sorry to derail with a sidebar but what software/platform are you using for the funds analysis shown above, it looks good and I don't recognise it?

And aroominyorks opening insult offended me too, I'm a newcomer to investing, and have my lifesaving invested, with no further income, uncalled for remark

Putting aside the way in which it was expressed, there is an important point in aroomininyork's comment.  Getting a good night's sleep is more important than maximising returns.  If you find that the volatility is too unsettling to ignore, reduce the volatility.

The way I and it would seem many other retired people handle the problem of volatility in our life savings  is to hold a significant amount of cash or other assets that you are confident will still be there in 5-10 years time.  Regard it as a separate portfolio. You know that whatever happens in the short-medium term will not disrupt your day to day life.  Rely on equity only for long term inflation protection.  What happens to it in the short/medim term is totally irrelevent and the occasional 30% fall in the equity portfolio can be handled with a shrug of the shoulders.

Agreed. Retirement should be a time to enjoy yourself and that’s difficult if you are constantly worrying about your investments. So you need a solid holistic plan that includes state pension, maybe an annuity, control over your spending and a sensible asset allocation that lets you sleep at night. It’s easy to think about things too much and you need to understand that there are some things you just can’t know or control. So control the things that you can, like what you spend and your high level asset allocation and chill out.

Luckily I have a level of savings I am happy with
And we both have smallish DB pensions kicking in in a few years time followed by us both having full state pensions in 4 and 7 years time
We have our next 3 years drawdown covered

And my invested portfolio is there for dipping into as and when from at least 10 years from now.
So to a large sense, my savings feel like my bonds in a way

Which begs the question “what are you including in your asset allocation?” I also have a DB pension, and state pension to come and income from a rental property. I think of them as my relatively safe income generators and so for the rest of my money I basically have a couple of years spending in cash for convenience and most of the rest in equities. I’ve seen big losses recently, but I can remain sanguine as my income doesn’t depend on the stock market

aroominyork

ChainsawCharlie said:

GazzaBloom said:

aroominyork said:

You are so emotional and panicky that you need to find an index fund that meets your risk tolerance and learn to leave it alone. If there was one house I would want for actively managing mid-risk multi-asset funds it would be Royal London, but you see them as diseased. The diversified fund is about 57% equities; over the last five years it has outperformed VLS60; you mustn't be thrown by a small recent dip.

@aroominyork sorry to derail with a sidebar but what software/platform are you using for the funds analysis shown above, it looks good and I don't recognise it?

And aroominyorks opening insult offended me a little, I'm a newcomer to investing, and have my lifesaving invested, with no further income, uncalled for remark

I'm sorry you feel offended but I cannot apologise for what I said. This is the fourth thread you have started on this subject and forum members have been very patient talking you through the issues causing you anxiety. However in each thread you go back to square one and I do not think my comment - trying to explain a way forward and why it might work for you - was out of place. I also note you have deleted the opening post of your three other threads and replaced it with Xxxxxxxxxxx, which doesn't demonstrate that you are moving anywhere but sideways. Thread "Bonds", Thread "60/40 mixed asset funds", Thread "Standalone bond fund alternative".

P933alilli

Ive just been having a casual scan through the thread as i'm in VLS60. I'm wondering if i have the right/wrong end of the stick. If the bonds part, ie.40% earns a yield of 3.1% per year will that show up as interest sometime in the future? As previously discussed unless a major world disaster unfolds then whatever the amount held in bonds, 40% of the portfolio , thats what you'll get back as the bonds mature in c.9-12 years time....plus 3.1% per annum interest (potentially?) And is this interest compounded? Then hopefully if the market performs, then Bob's your uncle? 

Eschatologist

www.fidelity.co.uk factsheet-data factsheet GB00B79LTQ12-royal-london-sustainable-div-trust-c-acc/key-statistics

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