Low interest rates on savings

[kabbes]

Depends how much risk you want to take. I’ve banged on about this fund a few times


https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/3257159

A steady 6-8% per year with very little volatility



Now, if the market takes a hit like it did last March with Covid, this fund will also drop, which you can see in the five year graph below. But otherwise, it tends to be pretty smooth.

 

[Elpenor]

Thanks some research to be done tomorrow I think.

 

[platinumsage]

Thanks some research to be done tomorrow I think.

If you plan to use the money to buy a house within the next 12 months then it's not a good idea to invest it. There's a reason people say you should invest for 5+ years. The maximum potential gains in the period until early next year when you plan to buy are dwarfed by the potential losses. Also be wary of past performance, the last 10 years have seen a bull market for bonds which may mask the fact that a prolonged slump is a possibility in the future.

When it comes to buying property it's generally best to have as much cash as possible on hand until your purchase is sorted, as you never know what might be needed - then when it's done you can invest the remaining with more confidence at a higher risk level if desired.

 

[bimble]

i'm happy with the vanguard thing, so thanks thread.
I like how simple it is and have noticed that i seem to be not very emotional about the volatility in it (as in oh no i have less money than i did last week) so that is good to find out. Have put the money in equal chunks into different pots there with different risk (different equity %) and will just leave in like that for a while and observe both it and my reactions.

 

[kabbes]

If you plan to use the money to buy a house within the next 12 months then it's not a good idea to invest it. There's a reason people say you should invest for 5+ years. The maximum potential gains in the period until early next year when you plan to buy are dwarfed by the potential losses. Also be wary of past performance, the last 10 years have seen a bull market for bonds which may mask the fact that a prolonged slump is a possibility in the future.

When it comes to buying property it's generally best to have as much cash as possible on hand until your purchase is sorted, as you never know what might be needed - then when it's done you can invest the remaining with more confidence at a higher risk level if desired.

That’s all good advice, but I would note that I would expect bond prices and property prices to have some interrelationship, since house prices are most dependent on the price and availability of credit. Bonds would slump either if interest rates suddenly rise or if credit premiums suddenly rise — either way, this would also hit house prices.

 

[Hollis]

I have some IFA on my case... not SJP but another big one who cold called me. Their average long term return is 10%, - better than global stock markets. But I am still don't like the idea of someone else managing it all. They basically invest in one main fund. Their argument is that with a max of 70 shares they can manage it better. If you manage yourself then you indirectly ending up owning 100s through funds - but with no overall control of exposure. For their services they're charging 1.5% per annum, which I guess is par for an actively managed fund. And they do all the tax planning etc.

 

[strung out]

With a max of 70 shares (or presumably shares in 70 companies) they're massively exposing you to risk through lack of diversification.

If there's a huge financial crash, even two or three of those companies going to the wall could have a massive impact on your investments.

 

[Winot]

Just looked back at my last pension info to check charges:

Platform charge = 0.15%
IFA charge = 0.3%
Average total investment charge across all funds = 0.91%

Their fees sound on the high side Hollis (mine quoted above - he has achieved a shade under 10% annualised return on ESG investing) and I would be very concerned about the lack of diversification as strung out says.

 

[platinumsage]

Anyone who cold calls you offering any financial services or advice should be completely ignored. Either they're bad value and thus cold calling is good value for them, or they're scammers.

 

[nick]

They phoned you and you didn't phone them -dodgy

 

[nick]

Ref SJP
One of my potential IFAs got us to sign loads of letters authorising various pensions and invetment platforms etc to share our data with them.

This may explain why my wife just received an urgent call from her SJP contact. Who she never normally speaks to (but does get a lovely Xmas card from). Suspect they know they re about to lose a lovely income stream.

 

[Hollis]

I emailed the guy back and cancelled. Not heard a thing..

I have been trying to figure out what is best area to invest in over 20+ years. Obv. it's crystal ball gazing.. but based on historic performance my understanding is actively managed small-cap funds, probably with some bias toward tech/biotech/esg. My understanding is that with small caps - fund managers tend to do better than index trackers.

 

[metalguru]

Is anyone still making any money with Vanguard? I have various investments across 'Life Strategies' and seem to be running at around a sustained 5 - 7% loss over the last year.

There are countless media articles at the moment about how easy it is in Vanguard to beat inflation - but I'm wondering if its best days are over.

 

[bimble]

Is anyone still making any money with Vanguard? I have various investments across 'Life Strategies' and seem to be running at around a sustained 5 - 7% loss over the last year.

There are countless media articles at the moment about how easy it is in Vanguard to beat inflation - but I'm wondering if its best days are over.

That’s odd. I just had a look at mine, it says I’ve ‘made’ 6.5% overall this past year.

 

[platinumsage]

Is anyone still making any money with Vanguard? I have various investments across 'Life Strategies' and seem to be running at around a sustained 5 - 7% loss over the last year.

There are countless media articles at the moment about how easy it is in Vanguard to beat inflation - but I'm wondering if its best days are over.

All their LifeStrategy funds are up over the last year. Those with a greater proportion of equities vs bonds have risen the most:




As to inflation, you'd expect the diversified equities that these contain to outperform inflation over the long term. The bond component is more problematic in that regard, because there isn't realistically much upside there at the moment. Indeed you can see how their bond holdings have acted as a drag on performance as inflation expectations have gained ground:

Spoiler

However if you're invested for the next 10+ years this shouldn't trouble you too much, especially if you're heavy on equities which you should be with that time frame.

 

[UnderOpenSky]

I hope so. I stuck 4k there yesterday

 

[Hollis]

Is anyone still making any money with Vanguard? I have various investments across 'Life Strategies' and seem to be running at around a sustained 5 - 7% loss over the last year.

There are countless media articles at the moment about how easy it is in Vanguard to beat inflation - but I'm wondering if its best days are over.

Unless you some sort of expert, I expect the best strategy is to sit back, forget about it and go watch the cricket..

If you bought in the last 12 months then alot of funds aren't looking too pretty right now!

 

[metalguru]

Yes, having checked: its April 2021 - now.

I guess it's a bit like the weightloss thread - if you check your weight/investments too often, the fluctuations can be an emotional roller-coaster.

 

[UnderOpenSky]

Yes, having checked: its April 2021 - now.

I guess it's a bit like the weightloss thread - if you check your weight/investments too often, the fluctuations can be an emotional roller-coaster.

And there I was thinking it would be cool if there was an app so I can check them more regularly...

 

[kabbes]

And there I was thinking it would be cool if there was an app so I can check them more regularly...

If you want to do this, I recommend the Hargreaves Landsdown app, which lets you put together a watchlist. The stocks you can include in the watchlist is pretty comprehensive, and there aren’t many funds absent. If you set up a watchlist with the number of units you have in each of your funds, it will update every day for you

I do this and I would not recommend that you do it in the slightest. In fact, I suggest you actively avoid it. The result is unnecessary emotional turbulence. However, if you want to ignore this advice, that’s the way to go.

 

[og ogilby]

I do this and I would not recommend that you do it in the slightest. In fact, I suggest you actively avoid it.

I do this too and would also recommend you not to do it, at least for the moment when stocks are heading down.

 

[Elpenor]

Same here. I check regularly but have no plans to sell so wonder why I bother!

 

[kabbes]

In fact, in many ways, if you plan to invest more in the future it’s actually better for you if results are poor during the investment period and then catch up big time later. It’s hard to tell your brain that though.

 

[og ogilby]

I'm comforting myself by remembering that if the money was in the bank it would be getting eaten away by inflation anyway.

 

[UnderOpenSky]

If you want to do this, I recommend the Hargreaves Landsdown app, which lets you put together a watchlist. The stocks you can include in the watchlist is pretty comprehensive, and there aren’t many funds absent. If you set up a watchlist with the number of units you have in each of your funds, it will update every day for you

I do this and I would not recommend that you do it in the slightest. In fact, I suggest you actively avoid it. The result is unnecessary emotional turbulence. However, if you want to ignore this advice, that’s the way to go.

No, I think I'll probably listen to your advice on this one. I picked 4 funds almost at random on the Vanguard site, just basing it on them owning more shares then bonds. Probably best to just check every few months.

 

[og ogilby]

I picked 4 funds almost at random

That's how I picked mine too. Before diving in I did loads of reading but in the end, the more I read the more confused I got.

 

[Brainaddict]

What I would say is that if you are thinking of putting in new money into tracker funds, it could be worth holding off right now to see if you can judge when the current stock market fall will end. But if the money is in there already for the long haul don't worry about it, the ups and downs are inevitable.

Because I don't have big savings I should say I only do tracker fund stuff in a small way with a part of my savings, mostly in order to hedge against inflation losses in the rest of the savings.

 

[Brainaddict]

Having said that I'm intermittently a bit of a fiddler with the small amounts I do put in. I did just pull out from a FTSE 100 tracker not just because of the current drop but because I think the UK economy is in for a rough ride this year compared to other parts of the world. I'll put it into a global tracker instead, when I think the current dip has turned a corner. But this is probably not the sort of fiddling that is good for most people.

 

[og ogilby]

What I would say is that if you are thinking of putting in new money into tracker funds, it could be worth holding off right now to see if you can judge when the current stock market fall will end.

If I had new money to invest I would put it in today as I'm pretty sure I'm not skilled enough to know when the bottom has been hit, we might already have hit it today?

 

[Gromit]

What I would say is that if you are thinking of putting in new money into tracker funds, it could be worth holding off right now to see if you can judge when the current stock market fall will end.

Fall? What fall.