Vanguard

You are not aiming for retirement - those funds mostly have long glide paths (25,20,15 years etc) and readjust bond/stocks allocation as the target date becomes closer. Your goal is 5 years away and would not really benefit from such adjustments, you might as well have a fixed allocation now.

As for what that fixed allocation might be you say

should I aim for a more aggressive balance between stocks and bonds?

5 years is not very long in stocks and there is a not insignificant chance to lose money over that period with them, so be careful with your spread.

The £1000 a year bonus will help a lot with your returns so you could try looking at different spreads and seeing what the worst/best/average scenarios might be over 5 years and picking one you are comfortable with. Don't pick one where a worst case scenario would be unable to put the deposit you want down.

Are target retirement funds the UK equivalent of lifecycle funds he mentions in the book, and are these suitable given my savings goal?

I havent read the book but these funds are a niche option that is unlikely to be suitable for the majority of people. They start off higher risk than the average UK consumer and end up lower risk than the average UK consumer. So, its not a case of using investments that fit you but instead you fitting the investments. That is not the way to invest. Plus, they are more expensive.

On top of that, your objective does not seem consistent with risk reduction over the next 20-40 years.

With my existing LISA, should I aim for a more aggressive balance between stocks and bonds?

You have given us nothing to go on to be able to answer that question.

Everyone has a personal view on investment risk. You have to consider knowledge, understanding, behaviour and capacity for loss. All those things influence the risk level that should be taken.

Also, your timescale is on the higher risk side. An economic cycle is around 10 years. If you invest for a whole economic cycle, the chance of ending up with less money than invested is low. You are looking at 5 years with a regular contribution. So, the timescale is high risk as a starting point as most of the money will be invested for less than the ideal minimum of 5 years. Indeed, a good chunk of it will be invested less than the recovery period from a stockmarket crash. Regular contribution periods are typically better at 15 years.

Mango111 wrote: »

That!!!8217;s really useful thanks for the replies. I guess for shorter term (~5 Years) I!!!8217;m best spreading around the best available high street savings accounts? They all seem to offer more than any other ISAs

I think this is a good plan. If you have money earmarked for spending in the next 5 years put it into something safe like saving accounts or National Savings. If you are sure you won't need it for 5 years you can lock it away and get a bit more interest.

For longer term investing and retirement Life Cycle funds are ok as long as you understand how the asset allocation changes with time. But, I think you'd be a bit better using Vanguard LifeStrategy funds or just putting a portfolio together of tracker funds.

Win7 too if you cut and paste.