Vanguard Lifestrategy VS Target Retirement Funds | This is where Vanguard gets it wrong
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- เผยแพร่เมื่อ 15 มิ.ย. 2024
- Vanguards Target Retirement & Lifestrategy fund ranges are both very popular. But one of them has a critical flaw.
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I am a Chartered Wealth Manager and Partner in a financial planning practice based in the UK. If you would like to find out more about working with us, please follow this link: go.novawm.com/getintouch
Retirement planning and generating a sustainable retirement income are two very delicate things. Good investment portfolio risk management is critical to ensure you don't run out of money.
In this video, we cover:
00:00 Intro
03:13 What Risk Is & Why It's Important
05:10 LS VS TR
07:49 Why Vanguard Have Got It Wrong
09:09 Better Ways to Manage Risk in Retirement
DISCLAIMER
This channel is for education purposes only and is not affiliated with any financial institution, although James does work as an employee for a wealth manager. This content is not a personal recommendation to take action. If you are looking for personal investment advice contact James directly.
James Shack™ property of James Shackell
Copyright © James Shackell 2021. All rights reserved.
The author asserts their moral right under the Copyright, Designs and Patents Act 1988 to be identified as the author of this channel and any video published on it.
Vanguard Investments UK are Fund Managers, Provider of Vanguard Index Funds popular with Beginners Investors. This video is on: retirement, retirement planning, stock market, investment portfolio risk.
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Age is just a number!
And a prison is just a house 🤣
I think retirement age is a number, but nothing to do with age: rather it's the value of a person's retirement fund!
Agreed and this is more important than ever as we live, and therefore retire, longer. Many strategies still use the same logic as “the old days”, when many people worked for one company most of their life, had a decent pension (often defined benefit), retired at 65 and died in their 70’s. Many people now work later into life now, fewer have DB pensions and most change companies more. This definitely gives the advantage to the life strategy funds flexibility in my opinion
When do you make a video with your Vanguard portfolio?
Can you invest in their target retirement funds through their S&S ISA?
Brilliant content and video as always James, thank you so much. Spot on advice about questions that I, and I am sure many others have. One suggestion for future videos, a simple guide to whether to buy an annuity or whether to use drawdown, or combination of the two. I can imagine you explaining this really well!! :) Thanks again.
Thanks James. I'm completely new to investing and learning about getting my setup for retirement. So this is a really handy set of videos. now whether I go for a Lifestratery or a Target Retirement I'm still undecided.
This was a very helpful video James, thank you. I was deciding between the Lifestrategy and Target Retirement fund choices in Vanguard, and came on here to listen to some different information about both.
I’ve been self-teaching finance for the past few years and these are very well put together videos. It’s also great that you cover UK content
Cheers Eliot! thanks for the support!
Another fantastic video James. Thank you! You have no idea how much you are helping people!
I'm glad you found it helpful Chris!
Hi James, I can’t thank you enough for making these videos. Listening to you I have been transformed from being overwhelmed and fearful of investing, to having now taken action at last and I am feeling very positive about my future financial plans. Thank you!!!
Thanks great to hear and thank you for writing this wonderful comment, these are what keep me going!
Great video James, this was my dilemma, i transferred a Pension into a Vanguard Sipp, Target Development Fund 2025, but i was thinking although i am 66 and semi retire in November, i still wanted the Pension to work for me, and wasn't ready to slow down just yet, and i wanted a certain amount of control over it. Your video gave me the info to, decide to change it to a Lifestrategy 80/20. And i have an isa in the US Global equity index.
Thanks for helping me decide what to do.
Binged watched all your videos last night thank you for your videos and simple explanations wish you all the best James
Nice Joey, thanks for the support.
Great fact based content yet again. Really good stuff which I keep sharing with friends and family. Thank you!
Haha thank you !
Good video James. Some good points about risk/tolerance etc with precise explanations.
Glad it helps Luxus.
Go on lad! Putting in that work. Hope you had a good weekend mate!☀️ 🙌🏽
You too Hiten, Thanks for watching!
Another excellent video James. Really liked the stuff about risk, capacity for loss. I've done a lot of reading (and investing) on Vanguard and it is good when an expert (that's you James) confirms what I think and definitely adds their expertise and knowledge to aspects I hadn't thought about. It is helping me crystalize my thoughts as to how to move forward and streamline my portfolio and asses what my risk levels are. I'm 60 by the way. Well done on your channel. I've got my sons watching it too.
Wow. You are so knowledgeable am intrigued on how to decimated all the questions.
Very good video! Enjoyed that. As I was watching, I was itching to post a comment saying something like "but what if you have a pension?", and then you covered it right at the end.
For me, these retirement funds seem to be aimed at people who have no pensions and are relying wholly on their investments. Maybe that's more common in the US? Then it does make sense to have a staggered path from high equity to high bond.
But you're right that everyone is different. I think if you have a decent sized defined benefits pension you don't need to hold so much in bonds. The pension gives you the low risk part of your portfolio.
Yes a big DB scheme is just like having a super high and secure fixed income. Although DB schemes are very rare nowadays!
Excellent video and just at the right time for me. Very well put across and gives better insight into personal circumstances that should drive the investment strategy, rather than you fitting around strategy designed for the average person.
Yes exactly. Cashflow planning and the level of risk you take with investments is the bespoke thing that you need to nail.
Incredibly helpful. I invest in Vanguard and this is very valuable advice.
Spot on once again James. I have a cash buffer and my intention is to use it as just that. Bonds have never been that attractive since I started self-investing in 2012, so I never bothered. Maybe something to consider when approaching the lifetime allowance limit?
I don't really comment on TH-cam, but this channel is fantastic. Great content, really well delivered. Keep it up!
Thank you James I will do!
As always James fantastic plain speaking content......I believe that this old fashioned notion of more bonds was based on most people ending up with annuities in retirement before the pension freedoms.this was to protect them if they happened to retire at a downturn.....I believe in risk and I believe in simplicity.....I have ISA's pensions etc but there is a three year cash buffer to cope with any downturn but to also take advantage of one ........everyday is a school day and Im still learning thanks to the efforts of kind indiviuals like you........I don't tinker much but I refine as my knowledge improves .............thanks again very much appreciated
Sounds good will! Yes cash flow is king.
Hi James! Great video as always👍🏻
I'm currently investing in the LS80. Should I get a VUSA and and/or VWRL as well? Thanks
Alot of good information here thats not covered by other TH-cam channels.
I am really enjoying your videos, they are super easy to understand and I feel much more informed! Thank you
I’m glad you’re enjoying them!
Pretty much described my current situation to a tee. Being Canadian I like a combination of VXC, VDY, VCE and VQN. Plus dividend stocks and a good chunk of change on the sidelines.
Bang on - it’s a balance of risk tolerance, risk capacity, and time horizon!
It is indeed!
Really good video, It is refreshing to find someone who really understands RISK. I have always invested in my own business and understand risk, the average person who has a secure job may not.
Entrepreneurs do have a much better understanding of the REQUIREMENT to take risk that's for sure.
Great video, James. Keep it up!
Thanks a lot, this is your best video for me!
Excellent video as always. Probably the best on this channel. Could you post more videos on retirement or early retirement strategies? I don't mean videos where you say buy this or sell that but more about strategies or topics that each person has to consider at different stages of life.
Sure - my video tomorrow is a first in a series on retirement planning
A really important video! Completely agree with the message
Cheers!
Cheers James. Nice and easy to follow video
You’re welcome!
One of your best videos so far James, really helpful and insightful. Keep up the great work!
Cheers Chris!
James, discovering your videos has changed my life! I now have more understanding of what I can do with my money than I ever did. I feel confident in investing and I have reviewed all my pensions thanks to you! Please keep going because your work is manna! Thank you. Oana
Ah thanks for the kind message, all the best with your investing Journey!
Thanks James, very helpful and informative
You’re welcome!
Brilliant and invaluable content. Thanks James
Glad you enjoyed it
Another great video. I'm interested to learn more about the tax implications, how is the tax worked out on these and how is it declared etc
Great information, James. Given me lots of food for thought. I am retiring in 13 months and do not have a big pension so want to maximise my investments in growth stocks meantime. I will have time to have a side hussle to bring in some cash as I am fit and healthy. Very good content in your videos. Thank you.
Cheers Rosemary!
I have a 2040 Targeted Retirement Fund. Thank you for teaching me ☺️
This came along just at right time for me as at 56 about to drawdown my DC pension and have been forecast very poor returns from where safely invested at present ( -ve at worst and 3.8% best!) To my mind if i keep @ 3 years cash elsewhere then historically boosting returns from Global stock market makes more sense for me as at 65 will have final salary and state pension at 67 to add in 👍
Hi James,
Great videos, I just wish that I had found them sooner! At least, the good news is that they seem to be reinforcing what I thought I had learned but I am still a little cautious because of your comment on one video that once you start down one path, you find things on the internet that simply reinforce that point of view.
Putting that aside and like other commentators, I had also concluded that Target Retirement funds are really aimed at people buying annuities but I think they can still be useful in managing cashflow - something that you have mentioned several times but I haven't seen a video on that topic (maybe I missed it?).
I have just retired, aged 63 but I am still in the detailed planning phase and need to execute on the plan. I'm hoping to continue living for another 30 years or more and I am in the fortunate position that I think I'll have more than enough income, once my state pension kicks in, to last past 100, as long as net investment returns exceed inflation by 1% on average (but I need to implement guardrails - that was new to me and very useful advice).
So how could Target Retirement funds work for me? My logic is that if I invest, say 15% of my total SIPP in consecutive target Retirement funds - 2030, 35, 40, etc. to 2060, then that would more or less optimise returns and also mitigate against losses in the period immediately preceding my need to consume those Investments through drawdown, as those dates approach. Any annual surplus could then be re-invested in an 80:20 fund to maximise the residue available for my descendents in the event of my demise. I could see that working as a general approach for many people using drawdown in retirement. Are there any major flaws in my logic? Follows the "invest and forget" strategy so that we're not worrying about the ups and downs.
Hi Dave, you could do that. Or you could do it more deliberately using fixed allocation funds, rebalancing then each year. Either way it would give you the same result.
I prefer using individual funds so I can see exactly what’s going on and use the exact instruments I need.
@@JamesShack understood, thanks James
Hi James great video! As I do retire now at the age of 63 my financial advisor told me to reduce my risk level according to their formula : 100% - age down to 35%. However I found out that i will not get enough return for the next 30 years (I hope 😊) to achieve my financial Cashflow targets! So I will stick to my 80% risk level for the time being. My only question is what is the reasonable cash level I should keep aside. This cash I would need to meet my delta cash requirements beyond my existing pension fund without reducing my cash level (which I would like to prevent) Is it 3 years, 5 years , .. any suggestions? Thanks again for the good quality of your work!
Really good video thanks..can you do something for lists say those of us who started a pension late like mid 30s
Great video, thanks James!
You’re welcome!
Thankyou for makin it simple.
Ok I’m 56, no pension an only a small savings. The targeted retirement plans are great for someone who’s towed the line, planned an it’s all goin to plan.
I think I’m on the other path?
I’ve got the robo isa. Done.
So now I’m looking at these one shot investments an thinkin 60/40 or 80/20, bcs I’m goin to be investing long into my 70s etc. Add to this I’m disabled an live in a retirement home, what’s goin to pay the bills down the rd?
I gues I’m askin which one? Less risk 60/40 or go for it an just plough through the joys to come with the markets for the next 10 yrs onwards.
Cheers for ya help. Obi one
Great videos, keep up the good work!
Cheers Ben, I will do!
Great videos James 👍. Any chance you could do one on vanguard Emerging Markets UCITS ETF (VFEM). It would great to hear your views on emerging markets in general as well. Cheers
Can you do a video on ETF vs Index funds. I have found that i can build an ETF portfolio for cheaper, but i image both have pros/cons
Thanks so much for your videos James. I've learned so much watching them over the last few weeks. I recently left the UK and moved to Europe and want to start investing here for my retirement (I'm 38). I'm looking for a a fund similar to the Vanguard Funds as they seem to be only available in the UK and the US. Have you got any recommendations? Many thanks!
I'm considering the bucket investing approach involving three 'buckets' or funds. One very low risk with sufficient for 2-5 years out, another medium risk with money needed 5-15 years out and a third high risk containing the remainder. They will then be rebalanced each year or so.
Absolutely love this video. This explanation is super super valuable, thank you!
Smaller, speculative stocks have endured a historically weak stretch. Investors are betting that a turnaround is finally in the works. I’ve lost about $320k within a few months, how do i take advantage of the market turnaround?
There are many interesting stocks in many industries that you might follow. You don't have to act on every forecast, so I'll suggest that you work with a financial advisor who can help you choose the best times to purchase and sell stocks.
@@user-vk8vu4li2x Having an investment adviser is the best way to go about the stock market right now, especially for near-retirees, I've been in touch with a coach for a while now mostly and I made over $800K within a short time
@@user-zw7cd7pe4u That's impressive! I could really use the expertise of these advisors. how can I get to your advisor?
@@user-vk8vu4li2x renowned for her proficiency and expertise in the financial market, *KRISTIN GAIL CUNNINGHAM* my financial advisor, holds a broad understanding of portfolio diversification and is recognized as an authority in this domain.
@@user-zw7cd7pe4u Thank you, I just checked her out and I have sent her an email. I hope she gets back to me soon.
40% TR2040, 20% LS100, 5% Index Linked Gilts, 5% EM Gov Bonds, 10% UK Equity Income, 10% HY Global, 5% EM ESG & 5% Global All Cap ESG. First 3 funds are accumulation, earnings from remaining income funds used to rebalance once a year.
This was so helpful. I am 20 years old and I have just started using vanguard and so far I have invested in the Ftse Europe fund, s&p 500 and the ecg global all cap ucits etf, I am planning on adding the ftse 100 uk and the life strategy 100 equity fund to my portfolio😌
Consider that LS100 has quite a chunk of UK, and Ftse 100 are all large-caps, FTSE 250 or all-share might be a better diversifier (and some of the ECG global all cap will overlap with both the S&P/FTSE Europe and FTSE 100 companies).
@@charlesfox8638 so instead should I invest in the ftse 250 only ?
This is what I am using as a reference:
S&P 500
Ftse Europe
Ftse Japan
Ftse developed Asia Pacific ex Japan
Ftse emerging markets etf
I have already invested in Ftse Europe and s&p 500. I bought a few shares with ecg, I’ll definitely stop though to avoid over lapping, should I swap out the Ftse 100 for the Ftse 250 on the list?
@@nginillz6170 I'm not qualified or intending to give you direct instructional financial advice. but you ought to consider that the Lifestrategy 100% is 19.4% FTSE UK Allshare, , 4.6% FTSE 100, and 1% FTSE 250. which means of the ~25% you've got from LS100 in the UK, ~82-83% is FTSE 100, while smaller caps, ~15ish% of of the all-share around ~3% of LS100, and 1% the 250, so ~4ish% of the 25% is "smaller" cap UK investments of which a tiny portion anything smaller than the 250, historically, the 250 and all-share have tended to outperform the 100. may not repeat. but given it's quite often the smaller companies that do well grow and move up the indices having exposure tends to do well. Also the 250 is more UK biased, whereas the 100 is focused more on international revenue generators, including a lot of finance and oil & gas producers.
Reading material:
www.ftserussell.com/products/indices/uk
pensioncraft.com/small-cap-vs-large-cap/
So if you're looking to add some UK Exposure (I personally wouldn't go too far from the FTSE or MCSI All-world (UK ~5ish% of global markets, versus ~25% of Lifestrategy 100 - somewhere in the middle overall) - the 250 is a better diversifier than adding 100 when you've already got most of your exposure to large-caps via all-share and 100.
Nice Charles. I would also add that if you're a 100% equity investor, why not just use a global index fund that gives you all this diversity for you? You're not going to gain much by trying to do this all yourself, and if you do gain anything it'll be by sheer luck anyway.
Hey, James. Absolutely brilliant!!! One of the best advice on investing. Really enjoy watching your videos and find them incredibly educational and helpful. A quick question. I’m turning 52 this year and was thinking about opening my very first Stock and shares ISA account with Vanguard by transferring my Cash ISA to them. What funds would you recommend to invest in to make sure it will give me a decent return and also not to go too crazy with the risk as may have to retire in about 10 years. Many thanks. Oxana x 🤗👍🏻
Thank you. Well i cant really recommend anything without knowing your personal situation, but try to work out what level of risk you can stomach and then take a look at the global index funds that give you lots of diversity, or simply a LS fund, because that may be all you need.
Appreciate its slightly different to your usual videos but I’d really appreciate a video on REITS! I’d like to invest in property but don’t have the cash for buying actual houses and the only REIT I’m aware of is Tritax Big Box
Crown Castle & American Tower are good if you're bullish on 5G. Have a look at Equinix and Digital Realty Trust for datacentre/cloud compute real estate
Ok sure - we can do that.
Great content thanks James. One question could you recommend another low fees platform like Vanguard since each company only cover 85k limit? Thanks a bunch
Nice vid, cheers, Jamo.
No problemo!
Great video James! I only recently found your channel and it's helping me a lot in understanding the market.
My question: does it make sense for a guy of 29yo to invest in Retirement funds? From your video, I get the impression the answer may be NO due to the fact such subject has a higher capacity loss and may not need money now. I just want to be sure of grasping the correct idea.
Yes Riccardo, retirement funds give you tax relief on your contributions, so. 80p is actually £1 in your fund. if you add money into the pension from your taxed income the tax is reclaimed so it becomes £1.25.
Now add the compound interest over 30 years at say 5% pa taking you to 60 and it becomes a tidy sum, that's the basic driver for pension saving PLUS at current rules 25% tax free when you do want to take it.
Great video and so true. I looked at getting a Lifestrategy Fund but then thought that basically, what is retirement? I'm very lucky in being debt free, fit and healthy and so will continue to earn. Even if I downsize my workload. Like James said, you will need money for (hopefully) a longer period, so why not continue to invest?
Indeed!
Not sure what the retirement age will be when/if I make it but you should be able to count on a UK state pension providing you have sufficient NI contribution years. The full uk state pension is a guaranteed £850 or so per month so you can take on a bit more risk and allow for a time of lower drawdown (seeling of assets in retirement) when equities are performing badly (like the covid crash, most of 2022, 2008/9)
Fully agree with the video. Target retirement funds seem a little antiquated to me.
Sure, take less risk as you approach retirement so that you can purchase a decent annuity. That makes sense. But who buys annuities these days?
If you’re on drawdown you’ll need your investment to keep growing at a decent rate way beyond retirement age.
I’m calling it a day at 57, and will hopefully enjoy 30 years of retirement. My funds need to keep growing during this time. No good having it all in safe bonds, not growing enough to support my income requirements. I will hold 2-3 years of cash to use as a safeguard to mitigate the risk of a downturn. I think this is a better approach.
After all, what’s the bigger risk? This risk your investment will temporarily go down, or the risk it doesn’t grow enough…?
Hi I’m 18 and I’m wanting to open my first stocks and shares ISA. Which provider would you recommend? I was leaning towards vanguard as I was planning on investing 100 pounds month into their S&P 500 fund. Also great video so helpful!
Actually this ended up being a better, more informative video than most others on TH-cam. Target dated funds are grossly overrated and are being pushed by a lot of lazy TH-camrs. Congrats on an actual consideration of the fund.
Was wondering if you could discuss fees with different investment platforms. Specifically, if you explain how a Portfolio Bond (RL360) could justify their fees.
Excellent, thank you!
Thanks to this superb video, I now see much more clearly why I wasn't quite comfortable with the LifeStrategy and Target Retirement Funds. I was wondering which of Vanguard's Global bonds you might recommend, James. [ Vanguard Global Bond Index Fund - GBP Hedged Acc = VIGBBD is what pensioncraft once recommended ; and in the Equity department the Vanguard FTSE Global All Cap Index Fund - GBP Acc = FGAC seems to be popular ]
The All cap is the flagship equity fund. And the Vanguard Global Bond Index Fund is the comparable bond fund. You cant go too wrong with them but just need to make sure you get the right level of risk.
@@JamesShack Thank you for your reply James. I think I may consider this sort of strategy after retirement: 70:30 equity/Bonds ratio ; if equity drops by 10%, sell 10% bonds for equity. If market drops by another 10%, do the same. Repeat until at 100:0 ratio if necessary. Once equity rallies 10% over where it was originally (I should try to articulate this with more precision), rebuy 10% bonds with equity. Once equity rises another 10%, buy another 10% bonds again. Repeat once more and I'm back at wanted 70:30 ratio.
Hi James. Found this very interesting. I’m a real amateur in these matters, so this might sound a dumb question….. I have an investment ISA with Barlclays. I’m just about to top it up for this year. I want to invest in VLS, should I do it with them directly or through my Barclays account ? Thanks
oh gosh. i was going to invest in the target retirement fund...but now watching your video...since i already have an emergency cash fund (no debt and will own my house fully this year ) maybe i can go for a medium- higher risk investment now that i have about 10 years before retirement. My head tells me to risk more for more gain though my emotions might say 'steady on'. I am a contractor so maybe i secretly enjoy risk.
Thank you James! 🙌
You’re welcome!
Hi @James Shack - what I don't understand with vanguard (and similar platforms) is whether the stocks/index funds are bough on my name or I am simply buying virtual stocks/index funds provided by vanguard and they buy the actual stocks and are registered within their company? thank you very much, you videos are very insightful, just subscribed to your channel !
The later. Your name won’t be on the share register Vanguard’s will be. That’s the same way most shares are held.
Great content as always. If you are going for all-out equities, is LS100 better than a global tracker such as Vanguard FTSE Global all cap? Never sure if the UK bias in LS100 is worth worrying about, so long as you are invested long term.
Well it's a toss up between UK bias and a more global spread. The difference in performance should be marginal. It all depends if the US does better.
@@JamesShack thanks - saying it is marginal is reassuring. The more you look at investing, the more the risk of overthinking I find. I need to just invest and forget
👍🏻 very good video!
Fantastic video.
I spent 3 years studying economics at uni and only learnt one thing that was useful for investing. The price of gilts and bonds goes up if interest rates decrease and the price of gilts and bonds goes down if interest rates increase.
Given that US interest rates are very, very, very low, there is not much upside to bonds and a lot of downside to bonds ie I would expect at some point interest rates to rise and the capital value of bonds to fall.
I would be grateful for your thoughts on the following:
1. Given the current level of interest rates, why is it a good idea to include "bonds" in the asset allocation at all?
2. What is the next best asset class to invest in that is expected to increase in value if equities/shares fall?
Thanks.
So Bonds primary role in a diversified portfolio is to provide downside protection - when stocks crash bonds should hold their ground or even go up. The return is secondary to that.
Secondly - we don't know what's actually going to happen. I was on a team managing £9 billion at HSBC and from 2014-2018 we thought, along with many others, that interest rates would rise. How could they have gone lower? They did, and we lost big on that trade.
In any case, if you do have a strong conviction on something you should rarely ever sell out completely. Normally it's just a case of going slightly underweight your usual position.
If you are concerned about rate rises, maybe try to buy shorter term (duration) bonds that will be less affected by interest rate rises.
Other assets classes that are less correlated with stocks: Gold, credit default swaps (although you can't invest in these easily), and infrastructure
@@JamesShack Except when they don't I guess a la 2022.
@James Shack, any chance that you could compare and contrast the Vanguard target date retirement funds between Vanguard & M1 Finance. Which would you recommend?
Hi thank you for the video. Would you invest on VWRL and VOO in same portafolio?
as someone getting closer to thinking of early retirement this is really helpful. What I like isn't 'what should I do' stuff but some of the key questions I need to be asking myself. This video does just that
But more video's aimed at navigating the approach to retirement and drawdown are welcome :)
Nice, thanks for this. It's good to hear that because that's all i can really do really! You need to come to your own conclusions. Yep i'm going to be doing a lot more retirement focused stuff
The conventional wisdom seemed to be that bonds and gilts are low risk and low return, but the current situation is that these have fallen recently much more than many equities. Has something shifter in the financial model? Gilts and Bonds don't seem a safe haven currently?
Thank u for this!!!!
No worries!
Please could you do a video about someone already retired - I'm trying to persuade my (early 70s) parents to put their house sale proceeds somewhere better than just their bank account but with low risk
This is great, thanks James. I'm not keen on target retirement funds but couldn't properly articulate why - this video does that!
I guess that while simplicity is generally a great thing, these funds might be a step too far as the risk is that people set and forget forever!
They seem better designed for people planning an annuity or big cash event at retirement rather than the average UK investor. I wonder if they were launched before pension freedoms came in?
They were launched before hand. They’re also big in the US where annuities are still a thing, so that may be why they’re stuck around.
Need to be careful that you don’t accidentally end up in a lifestyle fund through your employee pension too. Often the default funds they offer have the same auto de-risking element.
@@JamesShack interesting. Wonder how many people went into target retirement years ago and never changed plan despite pension freedoms coming into play. Setting and forgetting isn't always the right answer I guess.
Anyway, thanks again. Keep them coming! Maybe one for much later, but would be interested in any content on factor investing. Seems like a fairly niche thing in the UK (think vanguard are even closing their factor funds due to lack of take-up?) but Ben Felix and co make a compelling case for it!
@@chrismckee2799 yep for sure. That’s how we run our in house portfolios at work. We use the same dimensional funds as Ben. The problem though is getting hold of decent funds that can do it, there’s more and more coming out for retail. But demand is low because it’s quite an advanced thing, it’s not consistent, as factors come in and out of favour, and it’s quite a bit more effort.
Thanks for the amazing content James. One quick question....
As someone who is willing to take risk due to my young age - I'm 19.
I wanted to ask how and whether it would be possible for me to move my investments from a 100% lifestrategy fund to something lower risk later on in life (other than choosing the target retirement funds, lets say because i'm planning on charity projects in my old age) ?
Yes, you just sell your LS100 fund and buy LS60 etc
great video, my question is if vanguard is a one stop shop, why has my IFA, designed a portifolio of 12 different funds ranging from a japanese equity fund through to uk and us index funds and yes also a vanguard life strategy fund. They have done well for me and i have no complaints, except maybe for the charges, however is this maybe down to a certain amount of luck.
Hi James, really enjoying your videos. If you think a correction is on the way would you say that it would be better to have a more Conservative Life strategy until the next correction and then when it does move to more exposure to stocks? Say start now with pound cost averaging 50/50 and then following a correction switch to 60/40 or 80/20?
I think i'm going to do a video on this, because this is something we all think about at some point on our investing journey. The problem is that no one know when the next correction will be, or if it will even get down to todays prices. And then how will you know that it's a correction and not a crash. There are so many elements of this that you have to time perfectly that it makes it almost impossible.
It's best not to try and time the markets to get a few extra %, instead you should just let the market do it's thing.
Another really informative video. My wife has her entire pension in a 60/40 global fund. She is only in her 30s and would like to change the fund to take more risk. How would you go about doing that? Do you sell the whole pot at once and buy something that is 100% equity’s immediately or do it in small chunks? Is there any risk involved? Thanks
Sell it all at once and buy the new risk level that you want. The risk is that you're out of the market for a few days, but it could go up or down.
Very helpful video thanks 😊👍
Haha! You'll get there.
Hi James,
What apps are best to invest in individual shares on companies e.g. coco cola etc ?
Trading 212 seems popular but they are not taking on new customers.
Cheers.
Can you do a segment on dividend investment? We currently are invested in low risk dividend stock an we reinvest the dividends, but are planning to use those dividends in retirement to boost our bottom line.
Hi James, stumbled on your channel and really like your no nonsense content, I'm considering the Vanguard SIPP to consolidate 2 of my previous workplace pensions (Scottish Widows and L&G), i also contribute (10% salary sacrifice and 40% earner) to my current Company workplace pension. Is now a good time to be transferring pensions?
Whenever you transfer there will be a number of days you’re out of the market. This could work in your favour or against you. Over that short a time frame it’s just chance.
IMO, If you’ve identified a better, more suitable, investment platform/funds then you should get onto it ASAP.
I wondered if you had any thoughts on pensionbee which uses blackrock life path starting you at 95% bonds if you are 18 to early 30's this goes down to 40stocks-60bonds when you are close to retirement so not quite as conservative as vanguard or if you felt lifestyle and vanguard overall are better?
Hi James,
Thank you for sharing your financial knowledge online with me. I’m much more wiser than I previously was all because of your contents on TH-cam.
My son is 10 and has £30,000 in his JISA with Halifax.
Where and how can I grow this money. My financial goal for him is to save atleast £100 every month until he turns 18, convert this JISA to a pension. So, it’s going to be a long term investment that might be accessed ONLY when he retires.
I have watch your videos on Vanguard fund. Do you think Vanguard JISA stocks and shares (specifically Life strategy equity 100%) will be a wise move?
Kindly advise.
Hey James. You seem like a good guy and I trust your advice. That said, I'd like to know if you're sponsored by Vanguard?
I’m not! But Vanguard has been a good keyword for me that’s why I often do videos on them. But in reality this video is applicable to any target retirement fund from any provider.
I thought that was probably the case. Might be worth mentioning. Great videos.
"This is where Vanguard gets it wrong" in the title of this video helps clarify any posible sponsorship.
Mmmm - as ever intriguing - hit 60 - no investments but couple of pension pots that total £80k. So could I buy tax wrapper and include one LS fund and one Target fund?
This was bugging me as I research how to invest and it makes total sense!
Hi James. Really enjoy your posts and (importantly) I’m learning a lot about what’s right for me in terms of investing.
Can you advise on the position regarding the £85k protection….. do I need to spread my S&S ISA’s across a number of different providers? That is, if I choose a Vanguard Lifestrategy fund, will I need to split my total investment into £85k lots and place them with numerous providers?
If you use a reputable platform in the UK your assets are held separately from that platform in a nominee account. So if that platform goes bust you still own the assets within then nominee account. I have clients with many millions invest on one platform.
James, great videos, thank you. Something you have said a couple of times is thinking of "your goals" when deciding your level of risk.
As a pretty normal chap, with a normal salary how do I realistically create goals?
Keep up the great work!
Hi Matt, beyond shorter term things like building an emergency fund, getting debt free, buying a house and supporting a family goals can start to get a bit blurry especially if you're young.
But beyond that the big goal that most people want to achieve is retirement, or at least have the option to retire. So it's worth thinking what that would actually look like, how much income might you need a year? And how big a portfolio would you need to achieve that. This could be a far out goal but in the short term you could set savings targets which can just be monetary figures.
It is important to think about these things early on because otherwise you may go blindly on saving £x every year only to realise that it's not enough, or, less likely, too much. And you could have been doing more to save or spend.
I'm just curious why Vanguard's bond allocation doesn't exceed 50% in a retirement fund that's already reached maturity. I would think a 2020 fund should would have already been at around 70% bonds and 30% shares in 2022, not 50/50.
James, hi, new subscriber learning a lot from your videos. Quick Vanguard question if I may. Can you transfer a cash ISA from another provider into a Vanguard stocks & shares ISA? Thank you
Yes you can
I'm 54 years old and due to poor decisions in my past I have very little retirement savings. Which would be a better choice the life strategy or target date
Hey James, great content! Where do you stand on SIPP accounts? My friend has said I can get a government subsidy on my contributions to a SIPP which sounds great but what are the drawbacks? Does it force a risk management strategy on you like the retirement plan from Vanguard? I’ve been recommended to Wealthify - better than Vanguard or no? Cheers
I currently use Wealthify and whilst their app is user friendly with a great customer service team behind it, I have recently discovered their charges to be quite high, thanks to one of James' videos. Wealthify charge almost 3 times what Vanguard do. It's a shame Vanguard do not have an app for the UK market.
but in terms of usability, Wealthify are one of the easier providers to work with.
Came across the channel as looking to start investing. I ticked boxes mentioned in last vanguard video.so ready to go. Believe it or not silly question time. I haven't tried yet in case I get it wrong.
It's the actual process of setting up.
This is how I imagine it goes so correct me if I'm wrong.
-Set up stock and share Isa on the platform.
- deposit money into the isa from my current account
- set up DD into the isa
- set the isa up to automatically invest each month?
Or is I set up the DD to go direct into the fund?
Hope that makes sense
Cheers
I don't actually have a DD setup with Vanguard, but i think you can either set the DD to go to cash, or to have automatically put whatever % into whichever fund.