Bond Volatility

P933alilli

So, a very basic question regarding lifestrategy 60! I have 26k in and If i'm holding it for ten years how likely would it be to get a return which keeps up with inflation? I'm looking at options for my remaining 14k this tax year. Pause VLS 60 and put the 14k in an easy access isa. Then if there looks like a good sale plough some in. Or start drip feeding into global all cap which is less UK orientated but more risk, maybe £500 per month. Or just stick it in the best fixed rate isa. 
  Then again if im invested in a s&s isa, when do i take money out? If things improve and i start getting returns do i bring back cash to my current account? is that the general idea , as and when needed, in good times, rather than have a fixed date to take it all out? If the good times come back!!

Linton

Collyflower1 said:

So, a very basic question regarding lifestrategy 60! I have 26k in and If i'm holding it for ten years how likely would it be to get a return which keeps up with inflation? I'm looking at options for my remaining 14k this tax year. Pause VLS 60 and put the 14k in an easy access isa. Then if there looks like a good sale plough some in. Or start drip feeding into global all cap which is less UK orientated but more risk, maybe £500 per month. Or just stick it in the best fixed rate isa. 
  Then again if im invested in a s&s isa, when do i take money out? If things improve and i start getting returns do i bring back cash to my current account? is that the general idea , as and when needed, in good times, rather than have a fixed date to take it all out? If the good times come back!!

If you invest in shares or funds of shares over the long term, perhaps 10-15 years, you are very likely to beat inflation. In the short term, say less than 5 years all bets are off. You may do very well or you may lose money in reall or even £ terms.

VLS 60 is only 60% invested in shares so the returns are likely to be lower but less volatile.  Ever since VLS60 started, about 11 years ago it has greatly exceeded inflation. But that period mostly saw high equity returns and low inflation. What will happen in the next 10 years is unknown.

When do you de-invest?

Presumably you are saving/investing for some purpose, to be able to spend that money at some time in the future to improve your life. Perhaps buy a house or retire. So you de-invest when you are in a position to spend the money in the way you wanted. 

If you are investing it is essential to maintain an emergency fund in cash savings so that you don’t have to raid your investments before your objective has been met.

JohnWinder

So, a very basic question regarding lifestrategy 60!

I have no idea what you should do. There’s some useful historical data to show what has happened, and thus what might, but it doesn’t help us to know what will.
Try this discussion for a sobering view of how badly investments can do over long periods. Choosing a developed country at random, and investing in that country’s stocks over 30 years gave you a 13% chance of losing to inflation. Some of those countries did better, USA 1% chance; Japan’s last 30 years has cost a Japanese stock investor a 20% real loss. Stocks ‘get safer’ over longer periods, but that doesn’t make them safe. Bonds are not much better according to this analysis. https://rationalreminder.ca/podcast/224
If you don’t want to listen to an hour’s revelations you can search or skim the transcript. It’ll get you as close to knowing what will happen for you as most other information.

P933alilli

Thanks, i have enough in cash savings but i'm already retired and paying the maximum allowed into my dc pension so it depends on where or if i invest anymore. Maybe i'm overcomplicating things and should just stick to fixed rate cash from now on. I'll get full state pension in 7 years.