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Was Vanguard Life Strategy Performance Poor in 2017
King Lodos
Posted: 05 January 2018 09:10:00(UTC)
#22

Joined: 05/01/2016(UTC)
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One of the big lessons for me has been learning the difference between stocks you rent and stocks you buy.

FEET's *aim* is certainly to find stocks you should buy – and the returns from those come from decades of compounding – which means buying cheap is usually an opportunity .. 95% of funds are full of things you're probably better renting – being that returns will come from trends and mean reversion, but probably won't be great long-term – or avoiding.

It's the grey area where mistakes are made .. I'm reading a book called Switch: How to change things when change is hard – which like a lot of behavioural psychology books, breaks people down into Elephant and Rider (or Monkey and Computer) .. The Elephant's the emotional decision-maker, and the Rider's the rationalist .. Both have strengths and weaknesses (e.g. the Rider tends to overanalyse; the Elephant is a poor forward-planner), and Clarity is one of the keys to getting them to work together .. I think whenever you find yourself agonising over whether to sell something – or selling on pain – it tells you your Rider wasn't part of the discussion, which is probably down to a lack of Clarity
5 users thanked King Lodos for this post.
Harry Trout on 05/01/2018(UTC), Tim D on 05/01/2018(UTC), Sara G on 05/01/2018(UTC), Slacker on 05/01/2018(UTC), gillyann on 06/01/2018(UTC)
Harry Trout
Posted: 05 January 2018 09:41:51(UTC)
#23

Joined: 08/06/2014(UTC)
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King Lodos;55014 wrote:
I think whenever you find yourself agonising over whether to sell something – or selling on pain – it tells you your Rider wasn't part of the discussion, which is probably down to a lack of Clarity


I really like this post KL

I hope you don't mind me saying but I miss the badinage between you and Tony Peterson and hope he returns to this forum to check in occasionally. His posts lay out his philosophy with a clarity that I aspire to and I imagine others here would aspire to as well. I find that I don't necessarily have to agree with the philosophy to appreciate the clarity.

There were many diamonds in the rough and Tony's amusing dislike of mantras inspires me to finish this post with one of his own that has lasted with me .....

"You owe it to yourself to be your own fund manager"



8 users thanked Harry Trout for this post.
King Lodos on 05/01/2018(UTC), Mickey on 05/01/2018(UTC), antigricer on 05/01/2018(UTC), c brown on 05/01/2018(UTC), Captain Slugwash on 05/01/2018(UTC), Sara G on 05/01/2018(UTC), J Thomas on 06/01/2018(UTC), gillyann on 06/01/2018(UTC)
MartynC
Posted: 06 January 2018 11:30:00(UTC)
#6

Joined: 02/11/2017(UTC)
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The Spanish Inquisition;54891 wrote:
Could this under performance be just down to dollar strength? While the S&P 500 was making new highs many will have noted that the equivalent etf's in GDP were actually falling from their peak valuations. The Lifestrategy 40, 60, 80 & 100 funds appear to be set up for UK consumption, VASGX, a US product similar to an LS80 product is up 18% YOY. Also don't forget that your IT's are allowed to employ debt to varying degrees to boost returns.


The US dollar slowly declined against the pound over the course of 2017. Thus the large USA component of lifestrategy would underperform a US fund or IT employing currency hedging. Also in John Barrons portfolio most of the fixed income component is in High Yield debt & commercial property IT's which provides a higher return than the Government / investment grade Bonds in the Lifestrategy portfolio but JB's portfolio HY Debt & Com property IT component would provide less protection in a downturn.
4 users thanked MartynC for this post.
Tim D on 06/01/2018(UTC), David BB on 06/01/2018(UTC), The Spanish Inquisition on 06/01/2018(UTC), Mickey on 06/01/2018(UTC)
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