Should I have different funds?

Cruixer

@GeoffTF

So what do you suggest then?

You think I should just stick with Vanguard LS 80, that they are the better option than the other funds?

gm0

@Cruixer - Suggest you go and buy Living off your Money by Michael McClung. 

For a thorough examination of variable income, portfolio shape and drawdown methods.  He is a show working here are my test results and why I think what I think sort - very step by step.  Not here are my clickbait conclusions in 2 minutes. 
You have been warned.  It may take re-reads to grasp all he is saying.  But you don't have to end up agreeing with his final aggregate choice of methods to get value from his systematic review of a wide range of options. 

Reading a selection of the ERN drawdown series on the web and old monevator articles and comments before the paywall arrives isn't a bad shout either if you haven't already done so.

What these teach is that there are marginally better and worse methods ideas - to the possibility of a 0.1-0.5% difference level.  In 5% world - why not.  And also that many mainstream market and academic sourced ideas likely work OK. A few have drawbacks and are snake oil used to sell advice services.   ERN seems to enjoy the process of demolishing these.  McClung bloodlessly cuts his long list to a shorter one based on the metrics he chose to test.

For the OK ones - you can use the simplest one you like and will find easy to follow.

Any confidence gain from testing relies on that *exact* method. This is not Woolworths Pick n Mix.  If you want that. Test your own model once you have it assembled.

That rebalancing matters in many of these approaches.  Not all.

That there is no free income lunch mathematically - if you seek to optimise one variable - something else is changing.  People talk about squeezing a balloon for a visual metaphor.  (Which doesn't invalidate what the video upthread says about diversification and "typical or happens more often than not" asset class negative correlation - reducing risk for same income. 
But as in 2022 when bonds and equities positively correlated downwards to the dismay of all.  More often is not always.

Portfolios from circa 20% to 70-80% equities work fairly well - providing a tradeoff on available income and the amount of exciting volatility.

That 80%-100% equities probably adds volatility a little consistently faster than return across all paths. Yes you will die richer a lot of the time.  And scenarios and sequences where the retirement fails by capital depletion before the end will start to appear in backtesting or in market simulation of a given stress level.  How you feel about that risk reward tradeoff is about you not the (valid in its own terms but still guesswork) statistics.  

If you prioritise your heirs outcome - you may want to carry more risk of that particular type. Or priortise reducing risk of failure.   Dial it up or down.   These models don't tell you what will happen but they describe behavioural differences to help you choose a position to stand.  The old adage about all models being wrong but some being useful applies.

Being willing to accept some variable income along the way is a good way to reduce risk and improve sustainability of income overall.

If any of these questions or thoughts resonate - you know where to go and find out more about the arguments in more original sources

GeoffTF

Cruixer said:

@GeoffTF

So what do you suggest then?

You think I should just stick with Vanguard LS 80, that they are the better option than the other funds?

Sticking with VLS 80 is certainly a reasonable option. Chopping and changing is a bad idea. Vanguard LifeStrategy is the most popular single fund solution. I cannot say that it will be the best one. Nobody knows which fund will do best. There is no such thing as the best choice, only suitable ones.

Only you can decide how much risk you are willing to take. Bear in mind that the financial services industry always plays down risk. (The videos above talked about 40% equity draw downs, but it has been twice as bad as that. They also implied that all would be well after 10 years. That has not always been true, and again, we do not know the future.) They do not make much money by telling you to put your money in the Building Society. (I do not expect that is the best option either, but you never know.)

JohnWinder

You’ll be aware that some actively managed funds out-perform their comparable index, or under-perform them for varying numbers of years before about-turning their performance to the other direction. This is what makes it useless to compare performances of active vs passive funds, other than to be able to say ‘that was good (bad) choice 10 years ago’.

It’s more useful to compare two index funds’ performances, but whether or not you find a difference in their returns you then need to look at which indexes they were following (similar or very different?), which countries or regions were well or little represented in their holdings, how much their performances differed from the index they were tracking, how much the fund makes use of derivatives, how much securities lending it does, how long it’s been operating successfully, and whether it’s currency hedged. But you need to consider those matters when choosing a fund to invest in even if you never look at its performance; so if you think it’s a suitable index be tracked, and it is tracked closely etc, then that fund is suitable for you. Comparing funds’ performances is a distraction from the important issues, but there’s no broad based commercial interest in educating people about that. 

As to equities for 11 years, 23 years ago was the start of a 12 year period over which global equity returns did not keep up with inflation. In future, that 12 years could be 15 years. Not to say avoid equities, but go in with your eyes open. This fellow usually has something useful to say: https://www.newretirement.com/retirement/podcast-episode-5-bill-bernstein-5-hurdles-secure-retirement/