Year of VLS60

P933alilli

After a year exactly in vls60 i'm 2.5% down - average 9.5% inflation plus charges.  Age 60, retired supposedly! I realize its  not as bad as it could have been but i'm still very nervous about investing. I keep seeing that over a five year period its normally a year negative returns, a year neither here nor there and three years positive ,not necessarily in that order. It sort of reassures me but....! So going forward , what to do? 

a) carry on putting in £500-£1000 per month
b) Go into cash fixed rate bonds, i recently put £45k into a 5 year fixed with Gatehouse @ 5.1%.
c) Carry on investing but take more risk, ie.ftse world all cap
d) as (a) but try to time a chunk , look for a 'sale'
e) as (b) but take monthly income option on cash fixed rate bonds and invest that.

Its for ten years!

JohnWinder

Retired and still contributing £10k/year to a retirement fund. Go, you.
Still putting £10k/year into a fund? Pray it falls further so your future returns are better still.

P933alilli

Eh? Oh, i forgot to add i'll probably only be contributing up to my S&S isa allowance, and probably considerably less, until april 2024! I'm anything but loaded!

dunstonh

A negative year is brilliant news for those paying into their investments on a regular basis.   You are you now buying your investments cheaper than they were.  When it goes back up, these cheaper ones will make more money than the more expensive ones you bought before you had concerns.

Nothing has changed since you started.    A negative year was always going to come at some point.   For you it happened in year one.  You will probably see another one or two in your timescale.

P933alilli

Thanks for your reply Dunstonh! 

Albermarle

Collyflower1 said:

After a year exactly in vls60 i'm 2.5% down - average 9.5% inflation plus charges.  Age 60, retired supposedly! I realize its  not as bad as it could have been but i'm still very nervous about investing. I keep seeing that over a five year period its normally a year negative returns, a year neither here nor there and three years positive ,not necessarily in that order. It sort of reassures me but....! So going forward , what to do? 

a) carry on putting in £500-£1000 per month Seems like a good idea
b) Go into cash fixed rate bonds, i recently put £45k into a 5 year fixed with Gatehouse @ 5.1%. A mixture of cash savings and investments is a good place for someone retired 
c) Carry on investing but take more risk, ie.ftse world all cap. You have said you are a nervous investor, so moving to a higher risk investment does not seem sensible
d) as (a) but try to time a chunk , look for a 'sale' You have a 50% chance of getting the timing wrong or right. Easier just to keep investing every month
e) as (b) but take monthly income option on cash fixed rate bonds and invest that. Not sure

Its for ten years! If you mean you will want the whole lot in 10 years time, then maybe better to reduce /stop investing as that time gets closer.  If you mean that in 10 years you will start slowly spending it, then just keep on investing.

Some comments in bold 

P933alilli

Thanks everyone!

Ash_Pole

dunstonh said:

A negative year is brilliant news for those paying into their investments on a regular basis. 

Unless I'm missing something I'm not sure if a fund going down in value is ever brilliant news however you pay into it.

Linton

Ash_Pole said:

dunstonh said:

A negative year is brilliant news for those paying into their investments on a regular basis. 

Unless I'm missing something I'm not sure if a fund going down in value is ever brilliant news however you pay into it.

If you dont want to sell the fund going down in value does not matter.  You need to get used to prices rising and falling over the shorter term, if not your only other choice is cash savings.  Buying when prices are low is an opportunity, better than buying when they are high..

dunstonh

Ash_Pole said:

dunstonh said:

A negative year is brilliant news for those paying into their investments on a regular basis. 

Unless I'm missing something I'm not sure if a fund going down in value is ever brilliant news however you pay into it.

You are missing something.      What is there not to like about buying your investments 10-20% cheaper than they were a year earlier?

mark5

Ash_Pole said:

dunstonh said:

A negative year is brilliant news for those paying into their investments on a regular basis. 

Unless I'm missing something I'm not sure if a fund going down in value is ever brilliant news however you pay into it.

Things can’t always go up although I do agree its a more relaxing feeling when things are going up.