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Posted: Sat Mar 04, 2017 10:07 pm
by kevin_wilson967



I'm also considering VLS60 and looking at the last 5 years history, the returns have all been positive, unless I've misunderstood the figures. I'm sure there will be ups and downs, but you seem very certain about 30% losses. How often do they occur?
Originally posted by Audaxer


Based on recent history, every 8 years or so. We are about due another.

Posted: Sun Mar 05, 2017 1:35 pm
by tymad03
I think VLS60 could fall further than 30%, if the world suffers both rising interest rates and falling equity prices, at the same time.



I can imagine a fall of 40% or even 50%, probably drawn out over about 2-3 years.

Posted: Sun Mar 05, 2017 10:26 pm
by Swording



I'm also considering VLS60 and looking at the last 5 years history, the returns have all been positive, unless I've misunderstood the figures. I'm sure there will be ups and downs, but you seem very certain about 30% losses. How often do they occur?
Originally posted by Audaxer




The LifeStrategy funds havent been running for many years. And equities have been pretty much on the up since the last financial crisis in 2008, so the numbers won't show a drop.



When, not if, we have another crash then your equities will do something like this:







They will recover, but it may take a number of years. Are you prepared for that? Can you handle a30-40% crash and a three/four rear recovery?



The upside is that stocks are a lot cheaper to purchase when the a*se has fallen out of the market, so purchasers at the bottom will be quids in in the long term.

Posted: Mon Mar 06, 2017 1:45 pm
by sewage



I'm also considering VLS60 and looking at the last 5 years history, the returns have all been positive, unless I've misunderstood the figures. I'm sure there will be ups and downs, but you seem very certain about 30% losses. How often do they occur?
Originally posted by Audaxer


An economic cycle is around 10 years. These funds have only been running around 5 years. The period they have existed is only in mostly positive years. The 30% loss potential is within their volatility range.



You would expect 15%-20% losses every 2-4 years and 30% perhaps once in 10 years. However, its like predicting a house in a flood plain with a 1 in 50 year flood potential. It doesnt mean they will be 50 years apart. You could get two in two years.

Posted: Tue Mar 07, 2017 6:23 am
by dggim
It's for this reason that I'm not bothering having a trading account.



I have my pension (VLS80), my ISA (VLS60) and anything outside of those will be 3% interest bank accounts.





That being said, VLS60 has not witnessed a crash yet. It may be more sturdy than people think. Guess it depends where the crash is emanating from.

Posted: Tue Mar 07, 2017 12:45 pm
by dggim
So, how much much cash (or what percentage of your investments) do people here keep as cash in order to take advantage of the next crash?

Posted: Tue Mar 07, 2017 11:05 pm
by sewage



That being said, VLS60 has not witnessed a crash yet. It may be more sturdy than people think.


Its asset allocation is known. It is easily mapped to see how it would have suffered during various crashes. The underlying assets are trackers. So, there won't be any downside protection. They will track the markets downwards just as they track the markets upwards.

Posted: Wed Mar 08, 2017 12:45 pm
by dggim



Its asset allocation is known. It is easily mapped to see how it would have suffered during various crashes. The underlying assets are trackers. So, there won't be any downside protection. They will track the markets downwards just as they track the markets upwards.
Originally posted by dunstonh


60% of the underlying assets are trackers. In theory, the 40% bond allocation should rise in the event of a crash. That is the point of having the bonds, is it not? Otherwise, VLS investors might as well all get VLS100.

Posted: Thu Mar 09, 2017 3:03 am
by pillow18
and to keep the 60/40 split when equities are going down in value more willbe bought to bring it back to the split. Buying cheap is good?

Posted: Thu Mar 09, 2017 8:27 pm
by dggim



and to keep the 60/40 split when equities are going down in value more willbe bought to bring it back to the split. Buying cheap is good?
Originally posted by RuleTheWorld


I don't follow...