Vanguard Life Strategy

jim8888

I invested into the VLS20 in 2021 on the same basis and rationale that the OP is thinking about today. The bond market then crashed and I've had zero growth from it over the last five years and have nursed losses during most of that time. Honestly, unless you're in cash then you're gambling, as nobody knows anything when it comes to future projections on markets. And even cash is gambling versus inflation. As far as I can tell, diversification is the only answer, so do buy some VLS 20, alongside some VLS 80, some gold, some cash, some property, some Premium Bonds, the 4.15 at Redcar and as much as your mattress will hold. 

Secret2ndAccount

SVaz said:

As said upthread, a high percentage of Bonds only offers protection if buying an annuity.  

Incorrect. If protection is what you seek, then bonds, held to maturity, can guarantee that.

jim8888 said:

...Honestly, unless you're in cash then you're gambling...  

Did nobody read the part where I said you can get index linked gilts paying 1%, even 2% above inflation, guaranteed.
I've never seen the point in bond funds, since they can still go down as well as up*. Individual UK gov't bonds offer complete clarity as to what you will get and when. Maybe the returns work for you, or maybe they don't, but there's little in the way of risk.

*If you want to buy corporate bonds or high yield bonds then a fund would be a good way for a retail investor to access the market, and get the necessary diversification. For UK gov't bonds I don't see what it achieves.

Veloflyer

Secret2ndAccount said:

You have to decide how much you want. Do you have enough at this point?
Equities, historically, will provide the best return in exchange for greater risk of loss. Bonds can lock in what you have at a cost of limited growth.
Do you want to lock in what you have, or do you need some risk in order to try to meet your goals. This is a personal choice after you have figured out how your assets match up to your needs and your wants.

Incidentally, your plan to use the ISA for the cash buffer is slightly suboptimal in tax terms. You have already paid the tax on what's in the ISA. If your equities double in the ISA there will be no more tax to pay - you keep it all. If your equities double in the SIPP, it's still nice, but you pay tax on the extra money when you take it out, probably at about 15%.  Ideally, you want the slow growing assets in the SIPP, and the fast growing in the ISA. I recognise there can be other considerations of accessability, but it at least pays to know this.

I "should" I have enough in the SIPPs  for a decent retirement and I have enough in the buffer ISA for 4 or 5 years expenditure. To be honest, my salary is essentially beer money, but much of it goes into the SIPP anyways - for tax efficiency. As aforesaid, I want to live off the tax free lump sum from the SIPP for around a decade initially, so perhaps it is a case of protecting the SIPP as well as having the cash buffer.  

eskbanker

jim8888 said:

As far as I can tell, diversification is the only answer, so do buy some VLS 20, alongside some VLS 80, some gold, some cash, some property, some Premium Bonds, the 4.15 at Redcar and as much as your mattress will hold. 

Adding different asset classes certainly constitutes diversification, but buying multiple versions of VLS doesn't!

SVaz

Well as I was talking about Bond funds ( because the Op was on about VLS 20) not actual Gilts then I’ll think you’ll find I was quite correct.