Investment ISa with medium risk but long term

Albermarle

salviaS said:

Medium risk (in my comprehension) might fluctuate in value but still has a fair chance of giving good returns 

OK, but you have to be careful as 'medium risk' is a bit of a catch all phrase that can cover quite a wide range.
When you look at fund data sheets they often give a risk score between 1 and 7 but it is not an exact science. Also they only really rate mainstream investments. For example Bitcoin would probably be well above a 7.
You would probably looking at something with a 5 

Have a look at this.

HSBC Global Strategy Portfolios - HSBC Asset Management UK

El_Torro

salviaS said:

Medium risk (in my comprehension) might fluctuate in value but still has a fair chance of giving good returns 

Every situation is unique but a global tracker could lose 50% of its value (or more) in a short space of time. For that to happen we'd be talking about a crash, like the Great Financial Crash of 2008. Typically a 60/40 fund would lose about 25% in this scenario. Either fund could take well over a year to recover. 

Crashes / market downturns aren't a major problem, unless you crystallise your losses. If you invest now and 2 years from now there's a crash and you then sell at the bottom of the market then you would have been better off keeping the money in cash from the beginning. 

Crashes aren't an annual occurrence but they do need to be planned for. We've had our ups and downs since 2008 but the environment has been relatively forgiving to investors over the last 17 years. The next 17 years might be significantly more challenging. 


If your 60 / 40 investment suddenly loses 25% of its value would you still consider it to be a medium risk investment?