Invest in Bonds or Equities?

[Nowler]

Hey folks!

Just trying to understand things a bit better, so decided to ask you fine folk what your own informed opinions are on whether you would be more inclined to invest in either bonds, or equities.

Which Bonds or equities?
And why?... or why not?

A blend of both perhaps?
What sort of percentage split?

Anything constructive really...

Thanks

 

[Nowler]

My understanding is pretty basic, but from what I can see, equities have the potential to gain far more than bonds, but carry far more risk too. With equities, they have the benefit of adapting to changes in inflation, which bonds dont unless they are those inflationary linked bonds.

Bonds are considered a safer more stable option then equities (dare I say guarantees) ...the gains are far less... and that's assuming they can manage to even stay ahead of inflation.

For that reason...and obviously it's too early to make a final decision, but as it stands I am leaning toward the 80% Equities/ 20% Bonds: https://www.vanguardinvestor.co.uk/...festrategy_lifestrategy80equityfund_fund_link

Or maybe the 60% Equities/40% Bonds: https://www.vanguardinvestor.co.uk/...festrategy_lifestrategy60equityfund_fund_link


I feel stronger about the 80/20 split than the 60/40.

Anyone care to chime in?

 

[mpups]

i wouldn't overly concern yourself with the details for the time being dude, if you are drip feeding a relatively small amount of savings which you will hold for the medium to long term you'l probably be ok with one or two good 100% equity funds. if you are drip feeding you will cost average by buying both when low and high. if your pot gets "big" then you can think of more diversification

 

[Nowler]

i wouldn't overly concern yourself with the details for the time being dude, if you are drip feeding a relatively small amount of savings which you will hold for the medium to long term you'l probably be ok with one or two good 100% equity funds. if you are drip feeding you will cost average by buying both when low and high. if your pot gets "big" then you can think of more diversification

Thanks for the input buddy.

I wasted enough time for the first 19 years of my life, so until I catch up I like to do things today instead of tomorrow... unless it's getting my hair cut...which always seems to be tomorrow lately 😆

I am conscious that we are in year 9 of the second longest bull market. So am anticipating a crash. Though I've no idea when that will be...

If I'm 100% in equities and the crash hits that, I'm up sh1t creek without a paddle (though I have just opened an ISA and invested into an 80% equities/20% bonds fund).

That's why I wanted the input from others. Those with more experience might be able to tell me where the biggest danger is etc...

 

[malaguti]

Thanks for the input buddy.

I wasted enough time for the first 19 years of my life, so until I catch up I like to do things today instead of tomorrow... unless it's getting my hair cut...which always seems to be tomorrow lately 😆

I am conscious that we are in year 9 of the second longest bull market. So am anticipating a crash. Though I've no idea when that will be...

If I'm 100% in equities and the crash hits that, I'm up sh1t creek without a paddle (though I have just opened an ISA and invested into an 80% equities/20% bonds fund).

That's why I wanted the input from others. Those with more experience might be able to tell me where the biggest danger is etc...

your biggest danger is buying at the top. who knows when that crash is going to happen, so if you think you are entering late, enter with a smaller amount. there is nothing wrong with being in cash
worst case scenario, you lose a small percentage, best case you not only earn a small amount, you are able to reenter at the bottom
however this all presuposes you know when the crash is happening, and when its time to get out and then back in again. Do you?
even if someone else is managing your money, there has still got to be an element of responsibility yourself and that means having your own view of state of the market

 

[mpups]

Thanks for the input buddy.

I wasted enough time for the first 19 years of my life, so until I catch up I like to do things today instead of tomorrow... unless it's getting my hair cut...which always seems to be tomorrow lately 😆

I am conscious that we are in year 9 of the second longest bull market. So am anticipating a crash. Though I've no idea when that will be...

If I'm 100% in equities and the crash hits that, I'm up sh1t creek without a paddle (though I have just opened an ISA and invested into an 80% equities/20% bonds fund).

That's why I wanted the input from others. Those with more experience might be able to tell me where the biggest danger is etc...

I am aware of these concerns you might have, and reason for wanting input, my input is derived from trading and investing experience. Ultimately its up to you what level of risk you are comfortable with. Im not suggesting its the best thing to do with your savings at this time, im talking in the context of the thread i.e. you (a fairly young guy) have decided you want to drip feed into funds over the medium to long term. An 80/20 split would be absolutely fine if you are happy with the funds 🙂

 

[Nowler]

I am aware of these concerns you might have, and reason for wanting input, my input is derived from trading and investing experience. Ultimately its up to you what level of risk you are comfortable with. Im not suggesting its the best thing to do with your savings at this time, im talking in the context of the thread i.e. you (a fairly young guy) have decided you want to drip feed into funds over the medium to long term. An 80/20 split would be absolutely fine if you are happy with the funds 🙂

Even though im only 31, I still see the last 10 years as largely wasted. Particularly in a financial sense. Going to Uni was a smart move alright, and moving, but financially speaking I have nothing to show for my adult life so far. I really wish I had been a bit more receptive to listening to others in my teens, haha

I've decided to pull out of the 80/20 (equities/bonds) fund to go with a 100% equities. I am gambling on living at least another 30-40 years, 15 of which i'll be happy to work 40+ hours a week. So if I get burned by my decision to go all out on equities, then 1) It won't be a lot of money, and 2) I still have time (and energy!) to work my way out of that hole.

The older I get, the more i'll increase my bond holdings to add more surety in terms of capital preservation, but for now I'm going to drip feed 10% of my wages into it and once I sort out a new place to live, I'll bump that up to 20% or more. Recalculating as I go along of course.

 

[mpups]

Even though im only 31, I still see the last 10 years as largely wasted. Particularly in a financial sense. Going to Uni was a smart move alright, and moving, but financially speaking I have nothing to show for my adult life so far. I really wish I had been a bit more receptive to listening to others in my teens, haha

I've decided to pull out of the 80/20 (equities/bonds) fund to go with a 100% equities. I am gambling on living at least another 30-40 years, 15 of which i'll be happy to work 40+ hours a week. So if I get burned by my decision to go all out on equities, then 1) It won't be a lot of money, and 2) I still have time (and energy!) to work my way out of that hole.

The older I get, the more i'll increase my bond holdings to add more surety in terms of capital preservation, but for now I'm going to drip feed 10% of my wages into it and once I sort out a new place to live, I'll bump that up to 20% or more. Recalculating as I go along of course.

your doing ok keep it up! having your insights and sensible approach to savings etc at this age is an admirable thing. yes a key part of the risk in your investments is how the risk relates to you overall capital, so the pure equity risk is only relative to how much you have in there etc. and as someone who would be more active you can be more nimble, switch funds, buy the dips ... etc etc and even change you mind one day and focus on something else if you find a way forward with a different approach. just try not to buy high and sell low! easier said than done!

 

[Nowler]

Question:
Will investing my money in bonds right now help me to side step the impending contraction?

Keeping it preserved so that I can invest it back into equities when the crash hits.

If Not, what's your opinion on the safest place to ride out the storm?