Strategy for an amateur, other than sticking everything in a diverse index fund?

smulx

I don't really have the knowledge to actively manage my investments so a few years ago I decided to stick everything in Vanguard's LifeStrategy 80% index fund. It's doing okay, and I've gained 30% since I started, so there may not be any reason to change this approach. I assume there are other options though, there must be a huge gap between what I'm doing, and someone that actively manages their own stock portfolio. 

For someone in my situation, is this generally the done thing, once a platform that suits your needs has been found? Or is it normal to have a bit more active involvement even for people without the a lot of investment knowledge? Hope that makes sense.

EdSwippet

smulx said:

I don't really have the knowledge to actively manage my investments so a few years ago I decided to stick everything in Vanguard's LifeStrategy 80% index fund. It's doing okay, and I've gained 30% since I started, so there may not be any reason to change this approach.

There isn't. Do nothing different.

“Your money is like a bar of soap – the more you handle it, the less you'll have.” - Eugene Fama

Hoenir

smulx said:

I don't really have the knowledge to actively manage my investments 

Why change then ?  Unless you've the time and inclination to want to expand your knowledge. I'd say stay as is. Investing is akin to pulling on a piece of string. You'll never get to the end. When you think you know it all. Something will happen unexpectedly that you never saw coming. 

For fun you could run a dummy portfolio and see how your decisions pan out. 

smulx

Thanks, that makes sense. It felt like a bit of a silly question, as why change anything if things seem to be going fine. Wanted to check that there wasn't some option for just slightly more involvement that I'd perhaps overlooked.

EdSwippet

Hoenir said:

For fun you could run a dummy portfolio and see how your decisions pan out. 

Not really recommended. The danger is that you get lucky, attribute luck to skill, and then go on to put real money into that portfolio ... until luck runs out.

kempiejon

smulx said:

Thanks, that makes sense. It felt like a bit of a silly question, as why change anything if things seem to be going fine. Wanted to check that there wasn't some option for just slightly more involvement that I'd perhaps overlooked.

Good enough, is good enough. But do you want to be more involved? There's a lot in the investable universe, you've picked a fairly popula low cost UK vanilla plan. A good foundation.
One could go DIY but it takes time, some stresses and as another poster said there's the unexpected to deal with. Have you had a look under the bonnet at Vanguard so you know what it is you're buying? I heard they are UK biased which might have been at the expense of recent cracking gains in USA.

dunstonh

 I decided to stick everything in Vanguard's LifeStrategy 80% index fund

That is not an index fund.  It's a managed fund that uses underlying passive funds.
  

I don't really have the knowledge to actively manage my investments 

So, you have the right type of investment fund.  Although some would question the management decisions on that fund compared to alternatives.  However, that is a personal decision.

Albermarle

 Vanguard's LifeStrategy 80% index fund. 

An index fund will follow an index 100% . Typically they will follow a stock market, or stock markets in a globally diversified index fund.

VLS 80 is a multi asset fund . In this case 80% of it index funds following global stock markets ( but with a bias to the UK one) and 20% bonds.

The theory is that long term it will probably not grow quite as much as a 100% index fund, but in a stock market crash, the 20% bonds should lessen the damage a bit.

Eyeful

1.You can make investing as simple or as complicated as you like. 

2.Active fund managers like to make it look complicated to, so they can charge you fees that over the long term  transfer about 30% of your money into their pockets  They also do it in the hope that you will think you can not do it yourself.

3. Academic research repeatably shows, that after charges & fees are applied most active fund managers cannot
 out perform a simple major world index like the MSCI  World or FTSE All World.

4. If professionals with all the recourses, time & knowledge cannot beat the above indexes, I doubt if you will be able to do so either.

5. For someone in your situation it is best to stick to using a low cost  Multi Asset Fund.
This  "simple investing" gives you a ready made diversified portfolio, where you choose the share/bond split you are happy with. 
Watch: https://www.kroijer.com/

6. Remember that investing is for the long term, lets say at least 10 years, where the odds of winning the game are high.

Hoenir

EdSwippet said:

Hoenir said:

For fun you could run a dummy portfolio and see how your decisions pan out. 

Not really recommended. The danger is that you get lucky, attribute luck to skill, and then go on to put real money into that portfolio ... until luck runs out.

That depends on how seriously you approach the task. No shortage of people who start playing with real money from the outset. Then become over complacent and over estimate their own skill in a bull market. Somebody has to be a loser. As takes two parties to trade. 

EdSwippet

Hoenir said:

EdSwippet said:

Hoenir said:

For fun you could run a dummy portfolio and see how your decisions pan out. 

Not really recommended. The danger is that you get lucky, attribute luck to skill, and then go on to put real money into that portfolio ... until luck runs out.

That depends on how seriously you approach the task. ...

I've been seriously flipping a coin for five minutes now, but failed to get ten heads in a row. I guess I need to increase my seriousness.