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Post by Ace on Sept 15, 2021 12:33:39 GMT
I doubt you'll like my solution to the bond conundrum ozboy, but given the forum we're posting in... I've almost completely replaced the bonds in my portfolio (other than premium bonds for my emergency funds) with what I perceive to be the safer end of P2P investments. It's working very well for me so far with stable and predictable returns, though I accept that less than 4 years is too short to judge how it will work out long term. I don't separate out the bond replacements from my higher risk P2P investments, so I can't give a specific return figure for the bond replacements. Suffice to say that they start with the solid 4% returns from Loanpad. I also decided that I'd held far too much in FSCS protected savings accounts in the past, so these are also being transitioned to a very widely diversified range at the safer end of the P2P spectrum.
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Post by Deleted on Sept 15, 2021 12:58:17 GMT
One of my family likes a low-risk life so the majority of their assets are in
and a harder to find
Rathbone Multi-Asset Strategic Growth
nice and steady
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ozboy
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Post by ozboy on Sept 15, 2021 12:59:21 GMT
You have extremely large and impressive gonads Ace! Good Luck, I doff my cap in your general direction. It's various Vanguards and Fundsmith for me these days.
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ozboy
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Post by ozboy on Sept 15, 2021 13:00:55 GMT
Merci Sir @bobo.
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trium
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Post by trium on Sept 15, 2021 13:31:20 GMT
People have been predicting the collapse of bond prices for at least the last ten years, mainly on the theory that interest rates are so low they've only one way to go. Nevertheless bonds have continued to do reasonably well, though the lower interest rates go the more bond prices look set to fall in the future.
I've never been happy holding bonds but I maintain 20% on the insistence of my IFA. So far, I haven't done too badly, but there's still that feeling that it's only a matter of time before prices fall, and there's some indication that interest rates on deposits are edging up.
Bonds are usually advocated because they traditionally correlate inversely with equities, and because they tend to be less volatile. Not expecting spectacular gains, and hoping to avoid spectacular losses, is the appropriate mindset.
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ozboy
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Post by ozboy on Sept 15, 2021 13:43:44 GMT
People have been predicting the collapse of bond prices for at least the last ten years, mainly on the theory that interest rates are so low they've only one way to go. Nevertheless bonds have continued to do reasonably well, though the lower interest rates go the more bond prices look set to fall in the future. I've never been happy holding bonds but I maintain 20% on the insistence of my IFA. So far, I haven't done too badly, but there's still that feeling that it's only a matter of time before prices fall, and there's some indication that interest rates on deposits are edging up. Bonds are usually advocated because they traditionally correlate inversely with equities, and because they tend to be less volatile. Not expecting spectacular gains, and hoping to avoid spectacular losses, is the appropriate mindset. Yes trium, this is the Conventional Wisdom and of course has been for yonks, and I'm not overly happy moving some ££££s into Bonds so am proceeding V cautiously. The inverse correlation I think may not work in these weird investment times but I need to do something about reducing my huge exposure to Shares. First World Problem of course.
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trium
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Post by trium on Sept 15, 2021 16:16:44 GMT
ozboy What I intended to say in my last post is that I'm sticking with conventional wisdom despite my own misgivings. I have a 10k ISA transfer heading for my Vanguard account and when it arrives I'll be investing 2k in bonds. Simply because I believe in sticking to strategy. I'm familiar with your opinion of "professionals" and I don't necessarily disagree, but I certainly think they're smarter than me.
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IFISAcava
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Post by IFISAcava on Sept 15, 2021 17:28:03 GMT
Like Hazellend I have a good DB pension so have much less in bonds as I consider the DB pension a solid fixed income base that should be independent of the market (though the government could at some point renege on its promises).
But I do like to diversify because as the share portfolio grows, those inevitable drawdowns become eye watering amounts, even if we know they will almost certainly recover value in the end.
And there is always a bit of FOMO, however much one tries to guard against it.
So I do want bonds as well as property, metals, commodities, crypto and niche collectibles (whisky bottles!). And still a little P2P. Majority is in equities, a bit too much in whisky (mainly because it has done so well and I have managed not to drink that much of it yet - oh, and the poor control over impulse buying) more in cash than probably wise (fear of losing rather than fear of missing out) and small amounts in each of the rest.
As I have zero capacity to study bonds, I have increased bond exposure mostly via managed funds - the Baillie Gifford Managed as an active fund and the Vanguard LSs as passive ones.
Truth is also that all the diversification probably makes little difference overall, and takes time. If I were starting all over again, I might well be tempted to take Hazellend's route of all into VWRL (or more likely 50/50 with an iShares equivalent - just in case...).
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