Vanguard Life Strategy 60/40

pedro789

Hi
I have about £80,000 invested in this fund.
I did research before investing in 2019 & it seemed to have performed well.
I'm 52, not an experienced or knowledgeable investor, just looking for decent return - nothing spectacular.
It seemed good fit for my age/level of risk.
Over the past few years, it hasn't performed well.
I don't need the money any time soon & happy to sit tight.
But also read few articles that says 60/40 is outdated & not likely to bounce back, if at all.
Would really appreciate any thoughts/advice on possible options.
I'm pretty hands off, really want something I can invest in & not think too much about for next 10 years.
Many thanks 

InvesterJones

Worrying about performance based on just one or two years, or based on reading some articles, is not sitting back and not thinking about it! It is most likely a suitable investment if you are wanting something you don't have to think about for the next 10 years - so either do that and don't worry about a year or two or reading a few articles, or if you are going to worry about short term and various articles, pick something else.

Albermarle

Over the past few years, it hasn't performed well

In the last 5 years it is up 20%. A kind of middling performance as you would expect.

I'm pretty hands off,

Good, leave it alone.

metrobus

Albermarle said:

Over the past few years, it hasn't performed well

In the last 5 years it is up 20%. A kind of middling performance as you would expect.

I'm pretty hands off,

Good, leave it alone.

What about the last 2 or 3 years?

I totally agree that this type of investment should be 8 to 10 year’s minimum, but a couple of years ago everyone was saying it’s normal to have 1 in 5 negative years on these funds , but then it turned into 2 consecutive years and now it’s still lower than almost 3 years ago.

So how long do you sit on your hands and do nothing ? Whilst people are getting 6% risk free for the next 5 years if they wish.

Its a hard one.

EthicsGradient

metrobus said:

Albermarle said:

Over the past few years, it hasn't performed well

In the last 5 years it is up 20%. A kind of middling performance as you would expect.

I'm pretty hands off,

Good, leave it alone.

What about the last 2 or 3 years?

I totally agree that this type of investment should be 8 to 10 year’s minimum, but a couple of years ago everyone was saying it’s normal to have 1 in 5 negative years on these funds , but then it turned into 2 consecutive years and now it’s still lower than almost 3 years ago.

So how long do you sit on your hands and do nothing ? Whilst people are getting 6% risk free for the next 5 years if they wish.

Its a hard one.

It's up 10% on 3 years ago, which is probably more than you'd have got from any savings account over that period:

Vanguard LifeStrategy 60% Equity A Shares Acc Fund factsheet | Trustnet

Higher than all dates before April 7th, 2021. It was Dec 2021 to Oct 2022 that it performed awfully.

dunstonh

I did research before investing in 2019 & it seemed to have performed well.

Thats good because 2018 was a negative year. So, you would have seen that negative years happen before you invested.  

Over the past few years, it hasn't performed well.

Depends what you mean by few.   The only negative year since 2018 was 2022.     2019, 2020, 2021 and 2023 2034 YTD are all positive.   (typo corrected!)

But also read few articles that says 60/40 is outdated & not likely to bounce back, if at all.

Problem with articles is a) you dont know their agenda necessarily and b) the date they are using data from it key.

If the source of the article was 2021 then it could have merit.   If it is 2023 then its completely out of date and wrong.

It is, as much as crystal balls allow, highly unlikely you will see similar performance to the period of 2009 to 2021 being repeated as that was a bubble period created by events that are unlikely to be seen again (for lets say generations)

JohnWinder

It’s all been asked and answered before.
https://forums.moneysavingexpert.com/discussion/6228512/are-60-40-multi-asset-funds-dead/p1
https://www.bogleheads.org/forum/viewtopic.php?t=319124
https://www.bogleheads.org/forum/viewtopic.php?t=356881.  

https://www.bogleheads.org/forum/viewtopic.php?t=378381   

‘So how long do you sit on your hands and do nothing ? Whilst people are getting 6% risk free for the next 5 years if they wish.
Its a hard one. ‘

I agree, except with the spelling. The Dalbar and SPIVA research suggests we shouldn’t chop and change, and I wouldn’t characterise the alternative as ‘do nothing’, rather ‘keep adding to the investment’. So do what you think is better.
Two years of negative returns could become five years. The ‘worst there’s ever been’ is only the worst until something worse happens, then the old ‘worst’ is just something that happens.
The ’40 part’ of the 60/40 comes with a promise, almost a guarantee to give you coupons and principal back; the ’60 part’ owes you nothing. There’s no promise with equities, only hope; you can lose the lot and no one is beholden to you.

GeoffTF

Past performance is irrelevant. The past is in the past. What matters is the future, and that is unknown. 60/40 is what an expensive financial advisor would recommend for someone with average risk tolerance. LifeStrategy 60 does it much more cheaply. You make money by buying low and selling high, not the other way around.

eskbanker

GeoffTF said:

Past performance is irrelevant. The past is in the past. What matters is the future, and that is unknown.

Not necessarily, apparently:

dunstonh said:
The only negative year since 2018 was 2022.     2019, 2020, 2021 and 2034 YTD are all positive.

Remember where you heard it first!

JohnWinder

You're not supposed to read that carefully. Skim, type, skim, type....

daveyjp

If 60/40 is no longer a risk you want to take maybe time to look at long term savings lock in.