Vanguard Lifestrategy Fund 40/60

plumb1_2

Hi all, in 2021 I opened a vanguard ss isa and put my £20k into LS100, and have added to it early 22. It’s down about 7% last time I looked, 
Iam not one to look at it everyday/week, as I opened it with a view of 10 yrs investment.
But I want to try and have some balance and was looking into buying 40/60 bond fund. 

I do know 22 have been bad for bonds due to inflation and holding long term bonds(just getting my head around how these work).
My understanding ( gut feeling) is that inflation this and next year will start to fall, so now is maybe a good time to invest in bonds.

What are other peoples opinions?

ColdIron

Why not shift the lot into the VLS80 (or even VLS60). They are tailor made for this sort of thing without you having to cobble together a Frankenstein portfolio

adindas

In the past the 40/60 portfolio were quite popular here in MSEs as people might just following the crowd without considering that other people might have a different goal as well as the time horizon in investing. After the recent year bond performance they got their finger burnt and start realising that. There are already a few thread regarding people complaining their bond performance here in MSEs.

Do some research, if your intention is to grow your money, what having too much bonds in your portfolio will effect your return in the long run. Also people could easily see plot the bond vs equity performance in the long run and compare it. Also, search it how the proven billionaires investor perceive bonds as investment vehicles. For people with intention to grow their money by putting 60% of their investment in bond, good luck with that.

This is just a few examples of what the proven billionaires investors have been saying.

https://www.investopedia.com/articles/personal-finance/121815/buffetts-9010-asset-allocation-sound.asp Is Warren Buffett's 90/10 Asset Allocation Sound?

https://www.investopedia.com/terms/1/90-10-strategy.asp 90/10 Strategy: Definition, How It Works, Examples.

Also if it is just for a short term, there are a few saving accounts are currently paying higher than hypothetical return that you might get with bond. Why would sensible people would want to get a hypothetical return where you could get a higher guaranteed return ?

masonic

The main driver of bond funds falling is interest rate policy, and there is now only a small risk of rates rising above what is currently priced in. Should inflation be more sticky than predicted, or we get a second inflation peak due to recession, there may be limited scope to hike rates in the same way as 2022 due to the effect on the economy. A deep recession could send interest rates down again, which would positively effect bond prices.

If you wanted to take a wait and see approach, you could split your ISA allowance between cash and S&S, then transfer in the cash ISA later.