I think it's dangerous to feel either positive or negative. Such feelings are usually based more on the latest hyperbolic news story (or maybe just a particularly good breakfast generating a sense of excessive personal well-being), than true personal insight. This is why people like you exist and prosper, Chris.
@MikeReeves-d5j
11 ай бұрын
Hi Chris, I’m positive on the next economic phase, we’re in a period of high inflation but stocks and property values haven’t risen inline. In fact they’ve dropped in price. Therefore I see opportunity that assets will do well. I hold 100% stocks in a global index fund within my pension plus BTL properties as a side hustle. I’m sure the next couple of years will be turbulent but my pension contributions are hedged by tax relief and the BTL element acts as fixed income bonds but better as property gains value unlike bonds, plus using leverage maximises this. Only time will tell on this one, but I think Vanguard are low on their forecast. Thanks for the great content and financial guidance 👍
@chrisbourne-retirementplanner
11 ай бұрын
Thank you! Bonds can gain value, but that will depend on the price they’re bought at. They had been very expensive for a long time until the events of last year unfolded. I do like property for its leveraging ability - very powerful when used well.
@yiguanas812
11 ай бұрын
It's always good and quite rare IMHO to hear a financial advisor talking about the macro picture in some detail.
@chrisbourne-retirementplanner
11 ай бұрын
Thank you! I’m glad you liked it.
@jamesdaw131
11 ай бұрын
Positive. I am investing for 30 years not 2. Ps glad to see you back with another video. Always watch immediately.
@chrisbourne-retirementplanner
11 ай бұрын
Thanks James, very much appreciated 👍🏼
@soundslight7754
10 ай бұрын
Looking 5 years out, I'm positive about stock market
@thoughtsofmoog
11 ай бұрын
I’m feeling positive - we’ve had a huge amount of headwinds over the last few years (covid, inflation, Russia-Ukraine), and stocks broadly seem to have gone sideways for a long time. May view is that the global economy will turn the corner soon - provided US and China stay friends!
@chrisbourne-retirementplanner
11 ай бұрын
We can certainly always be optimistic. One thing’s for sure, the US tends to have a knack for finding a way. Are there too many structural issues? Time will tell. Much will depend on whether anything as yet unforeseen comes along to derail the recovery.
@simony2801
11 ай бұрын
So the general idea is that bond funds have now repriced themselves to reflect the higher interest rates and now offer good value, plus when interest rates do drop they will do very well.
@chrisbourne-retirementplanner
11 ай бұрын
Yep, in a nutshell.
@george6977
10 ай бұрын
Always positive as technological change always drives stocks up over the long term.
@chrisbourne-retirementplanner
10 ай бұрын
Thanks George. It’s certainly always been true that new companies come to fore, and old ones that don’t match the current needs of the world at large die off.
@neilcook1652
11 ай бұрын
Positive about the outlook as global economy will turn, post Covid, Ukraine and Israel. Current investments are buying the dip and will be some of the best performers over the next 20-30 years.
@chrisbourne-retirementplanner
10 ай бұрын
Thanks Neil. To use an oft repeated phrase from Warren Buffett - be fearful when others are greedy, and greedy when others are fearful.
@user-fv1576
11 ай бұрын
How often have analysts been correct ?can you show how well vanguard performed with their previous forecasts ?? If you can I would be more willing to take their forecasts seriously
@chrisbourne-retirementplanner
11 ай бұрын
Yes the Vanguard Capital Markets model has a good record. I’d put their analysis up there with the very best in the world. Just as you’d expect from the second largest manager of assets on the planet.
@jonathanhowson6420
11 ай бұрын
positive about the investment outlook because long term £-cost-averaging is the way forward. You win either way :)
@chrisbourne-retirementplanner
11 ай бұрын
Yes absolutely. If you’re in it for the long haul, analysis can be largely ignored.
@georgethomas6634
11 ай бұрын
Brilliant video mate!!! Echoes everything I’m doing with clients at the minute!!
@chrisbourne-retirementplanner
11 ай бұрын
Cheers George good to hear from you mate.
@garystuart3607
11 ай бұрын
Just plain and simple good analysis (not advice😂) Keep putting it out there Chris 👏👏
@chrisbourne-retirementplanner
11 ай бұрын
Cheers Gary!
@cheshirehomebrew
11 ай бұрын
Hi Chris, long time viewer, first time commenter. Positive for the markets, otherwise my money would be in a shoe box under the bed.
@chrisbourne-retirementplanner
11 ай бұрын
Thanks very much for commenting! Overall feeling seems to be generally positive.
@chadzoe1
11 ай бұрын
Great video Chris, I have recently dialled down my equity exposure and increased into a higher quality bond fund as I think we are headed for a global recession and bonds are historically cheap at the moment. Of course I could be totally wrong but I think US and UK will continue putting pressure on until they break something and then will quickly cut interest rates to restore balance and bonds will fly again. With reference to your video this will work well also for me with a buy and hold mentality if Vanguard are correct you have the opportunity now to buy bonds at a great price. My allocation is 20% equity and 80% bonds at present hopefully this will act as a good hedge if the recession materialises i think between 2024 - 2026 before things settle down. Great channel all the best
@chrisbourne-retirementplanner
11 ай бұрын
Thanks for your comments. I do believe that now is good opportunity for high quality bonds, so I admire your conviction. It’s always difficult to know of course, but if we do slide into recession I dare say it will work out well for you.
@roblowry9457
11 ай бұрын
Thanks Chris - always like your videos. What if you have a DB pension that covers your basic needs. Is it OK to have the extra in equities (global tracker in SIPP and ISAs)? The DB effectively doing the stabilising job of bonds?
@chrisbourne-retirementplanner
11 ай бұрын
Yes Rob, absolutely. Bonds are actually providing good growth opportunities in their own right currently though and it’s one of those rare times where we have to look at them for their upside potential.
@grahamscothern4319
11 ай бұрын
Hi Chris very interesting. I’m looking forward to you helping me next years ! Cheers Graham
@chrisbourne-retirementplanner
10 ай бұрын
Indeed! Thanks for watching Graham 👍🏼
@GregoryKodolanyiRitter
9 ай бұрын
Hi, as far as I am concerned, wage growth is the direct consequence of inflation. Inflation is caused (amongst other things) by excessive money printing.
@chrisbourne-retirementplanner
9 ай бұрын
The main reason core inflation remains stubborn is due to wage increases. The wage increases are a result of a very tight labour market.
@davidmcnay
11 ай бұрын
Positive. Yields better. Valuations better. Not sure about mega tech.
@chrisbourne-retirementplanner
11 ай бұрын
Many thanks David. Do you feel mega tech is overvalued? What is your view on US as a whole?
@vinnyg2619
11 ай бұрын
Funny this should pop into my feed as I was just telling someone I was planning on getting back into a long term corporate bond ETF because it may be the right time ... my android phone IS listening! As an American investor I have owned Vanguard's VCLT and made a profit as bond yield in it fell; I sold the position since the price started falling sometime in 2021. With a slightly over 6% yield and a low price which is about what I paid for it years ago it seemed like a no brainer. I was questioning my thoughts because of possible rate hikes that could come but I suspect at least in the US it should not be too many more. At this point I am in 3 to 6 month T Bills and am looking at VCLT as a way to generate a slightly higher yield but most importantly a capital gain from a price increase.
@chrisbourne-retirementplanner
10 ай бұрын
Based on the outlook, you’d have to say that long term bonds are offering value we haven’t seen in a long time.
@dudleyjoseph9485
11 ай бұрын
Superb video Chris. I have always maintained my faith in my LS60 fund but the one thing that concerns me about this is the skew to the UK on equity, especially seeing Vanguard's own predictions about UK growth. Might consider some individual bond funds instead of buying further LS60.
@chrisbourne-retirementplanner
11 ай бұрын
Hi there. Thank you! It is possible to hold the LifeStrategy model portfolios now, where you can choose the global option without any UK bias.
@dudleyjoseph9485
11 ай бұрын
Thanks @@chrisbourne-retirementplanner I wasn't aware of this. Are you referring to the 'Sustainable Life' funds? Or selecting a single equity and single bond fund to mimic LS? Or something different?
@rustypipe
11 ай бұрын
I've been drop feeding into LS60 for last 2 years and I'm still in red because of UK bias. I hope it will take off next year
@stevesas632
10 ай бұрын
Hi Chris, I'm not savvy about investments at all. I'm 53yrs old, plan to continue work until 60. I have no ongoing pension (just a frozen one of 10yrs). I have 2 fixed rate (1yr) savings accounts & a fixed ISA account. I also have some money in an easy access account. Should I be putting money into an investment? I have a friend who mentions SIPPS, but don't really know how it works. Thank you
@boombustinvest
10 ай бұрын
I'm not quite convinced by that chart at 5 minutes showing returns after 12 months of the change of direction of rates. The BoE rate changes at 2018, 2004, 1995 and 1998 were either minimal or part of a longer term rate hiking or cutting program so global equities were not at risk. (Similar in the US). What we are seeing now is much more akin to the two instances where global equities crashed and government bonds were the only game in town. Holding rates at zero for over a decade and then proceeding to jumpstart them up to about 6% in such a short space of time may prove to be huge policy mistake along with their buddies in the Fed. Time will tell.
@chrisbourne-retirementplanner
10 ай бұрын
You may well be correct there. In their zest to reach the target inflation number, central banks have basically said to hell with all other consequences.
@Sabhail_ar_Alba
11 ай бұрын
Vanguard's bond funds have been lamentable over the last 4 years indeed most of their funds have been disappointing which is why I sold off half my stock market portfolio and bought 5 year bank issued bonds yeilding 6% annually. Those LS funds seem like a particularly bad investment given its bias towards UK, which is basically an economic basket case.
@chrisbourne-retirementplanner
11 ай бұрын
Yes the bond funds will indeed have suffered. This is why it’s always necessary to assess risk and opportunity. Bond prices had become over inflated after years of abnormally good returns following the GFC. Value is now much better. Remember that LifeStrategy model portfolios can be chosen without the UK bias.
@nicolahull2632
11 ай бұрын
@@chrisbourne-retirementplannerHi Chris. I can't seem to find where you can choose a life startegy fund without the UK bias?
@1963dalek
11 ай бұрын
How do you folks rate the Vanguard BND option? Thanks 😊
@ivivivir
11 ай бұрын
Thanks Chris. I am not very positive about current economic conditions and expectations in near future. I believe there is too much debt outside there and even I am buying/keeping some bonds, I think at some moment in the future governments will default somehow in repayment of debt (or just keep devaluation of currency at faster rate). At that point it seems also important for me some to hold precious metals. Where can we find vanguard reports considering they look great to read and to take into consideration. Thanks again.
@chrisbourne-retirementplanner
11 ай бұрын
Thanks for your comment. There are certainly headwinds out there. Many people gravitate to precious metals, but I generally find them unproductive when equity markets do well. Everything has its place though. The research unfortunately is for professional distribution only, but I’ll do my best to keep sharing insights in my videos.
@paull544
10 ай бұрын
Hi Chris, I'm looking at Ishares Core global AGPB as a hedge. Effective duration is 6.4 years. Is that too short based on your current ideas on bonds? Enjoyed the video
@chrisbourne-retirementplanner
10 ай бұрын
No not necessarily… the fund would still provide a good potential uplift if interest rates head towards where they’re projected to be by the end of 2025 (c.3%). Average duration in many funds will already have fallen from peak due to the maturities that have occurred and new bonds purchased with higher coupons over the past 18 months or so.
@justjohn8949
11 ай бұрын
Interesting! I have been looking at bonds to benefit from some of the gain relief for holding to maturity. I'm positive about UK economy. Though I wonder if that's a home bias. Tax is going to be high for a while. Government spent too much. So that will feel gloomy. However, wage inflation is above inflation now. Inflation should drop more this month with energy price cap coming through. I think keep an eye on employment and fuel prices to gauge how it might go in the new year. A lot of UK equity is already prices low compared to peers, so down sides should be reduced compared to them too. Just property that is going to struggle, increase in rates obviously going to reduce leanding, people don't like to sell for less than they bought for if they don't have to. Maybe that stays flat or real terms loss while wages creep up...
@chrisbourne-retirementplanner
10 ай бұрын
Thank you for your comment. The only positive from a tax point of view, at least in the short term, is that with an election looming, there will probably be some concessions given. Whichever way the election goes though, some of that will be reigned back in at the first budget post election.
@aca99da
11 ай бұрын
Excellent video Chris!
@chrisbourne-retirementplanner
11 ай бұрын
Thank you I appreciate that.
@JezzaBOAC
10 ай бұрын
Great video, nicely done!
@chrisbourne-retirementplanner
10 ай бұрын
Thank you for watching!
@chrisgilbert4375
11 ай бұрын
Great content! Are you able to provide a link to the Vanguard PDF shown in the video? Thanks
@chrisbourne-retirementplanner
11 ай бұрын
Ah unfortunately I can’t Chris - it’s only approved for professional distribution, but I will keep trying to reference and break down the data in my videos.
@chrisgilbert4375
11 ай бұрын
I suspected as much. Thanks anyway @@chrisbourne-retirementplanner
@jacc88888
11 ай бұрын
Very interesting video. Planning to retire in about 14 years time and in the process transferring my pension to Vanguard. Thinking of going for the Life Strategy 100 but maybe the 80/20 is better now?…
@chrisbourne-retirementplanner
10 ай бұрын
The risk adjusted return expectation is certainly higher for high quality fixed income in the near term. Bonds do make sense again from this valuation point.
@PaulO-mv6ku
11 ай бұрын
Very interesting, thanks
@chrisbourne-retirementplanner
11 ай бұрын
You’re welcome Paul, glad you found it useful.
@K_Art4845
11 ай бұрын
Hi Chris, how about if you are not planning to dip into your pension for 20 years plus? I think I am mainly equity, if not all equity. I think it is possible interest rates could go up higher for longer, but it is too hard to accurately predict.
@chrisbourne-retirementplanner
11 ай бұрын
Over that length of time it will always be sensible to gravitate towards equities. There is plenty of time to withstand the volatility at it is worth taking the risk that growth will trend towards the upper end of the range.
@M8d9R
11 ай бұрын
I also don't intend to realise any investment gains until 22 years time. I personally am cost averaging into FTSE Global All Cap therefore, into a SIPP. Personally I'm not sure I'll ever buy bonds because I don't feel I understand them well enough.
@michaeldooley7931
11 ай бұрын
Great video and very interesting. The thing is, when looking back on history it’s much easier to see the year after an event such as the peak in interest rates. The trouble is that this is something that can only be determined in hindsight. Do we pick a date such as 1st April, 1st December or a.n.other date. How on earth can you pick the date looking forwards. Nevertheless, as you say a 20/80 or 40/60 split may make more sense now especially as we seem to be at the end of this rate rise cycle.
@chrisbourne-retirementplanner
11 ай бұрын
Thank you! I think it’s usually a little easier to tell with interest rates, because central banks give us a fair amount of forward guidance. We’ll hopefully know when rates have topped out from the rhetoric we get from likes of Powell and Bailey.
@pauldavidthomasfrodo
11 ай бұрын
Positive or Negative ? The majority of my investments are BTL with low LTV. I am now starting to move funds into equities. I don't intend to touch these for 10-15 years. I am 56. In the near term ( 1-3 years ) I really don't care. I will continue to invest in global indexed equities. 4-10 years, still don't care, I will be equities. However, my educational understanding of investments might change my stance. 10+ years, depending upon my health and government legislation I might to cash in my BTL's to fund more liquid assets.
@pauldavidthomasfrodo
11 ай бұрын
8:30am interesting risk stats. Most of my funds are ISA's as my income is property rental so no HMRC additions. I only drop stuff in my SIPP if my company has spare cash.
@chrisbourne-retirementplanner
11 ай бұрын
Yes if volatility is of no significance, equities should still feature most strongly.
@dazzassti
11 ай бұрын
Love your videos Chris, really well explained… I’m sure there’s a lot like me, I’ve. I investments but have focused on committing everything into my pension. What’s the best thing to do with where the pension is invested???
@chrisbourne-retirementplanner
11 ай бұрын
How long is it before you will start to take benefits?
@dazzassti
11 ай бұрын
@@chrisbourne-retirementplanner sorry that should have been, I’ve NOT got investments, I’ve only concentrated on pension contributions. I’m 56 so have time but would like to retire at 60 like we all would. I’m Sure theres a majority of people like me that see their pension as their main investment avenue. It’s what to do to ensure those pensions investments are in the right place.
@bobdobalina276
11 ай бұрын
I'm positive but I'm not touching bonds, or not UK bonds at least. You didn't say but those projections look like Life Strategy projections to me, if so the equity side is around 30%+ exposure to the flat UK/European markets? I see the calculations where done between June and September 2023. The BofE announced it was dumping £100m of its bonds over the next 12 months in Sept so would be interesting if Vanguard captured that decision. So yes, I'm positive but with the BofE determined too trash the UK bond market and the UK equity market flat for the foreseeable future, sadly I'm reducing my UK exposure.
@chrisbourne-retirementplanner
11 ай бұрын
They are holding scheduled auctions, but will review on an ongoing basis. They do need to unwind some of the stimulus provided in the aftermath of last year’s budget. The projections are Vanguard’s Capital Markets Model, which is the engine behind all of their multi asset strategies. In LifeStrategy by the way, you can choose the global model portfolios with the UK bias.
@porschecarreras992cabriole8
11 ай бұрын
Even if people are closer to retirement if they choose to go for flexible drawdown or UFPLUS it still makes sense to stay with stocks as your money remains uncrystallised and hence still invested in stocks all your retirement years. Th case for bonds would apply if your retirement is imminent and you want an annuity
@chrisbourne-retirementplanner
11 ай бұрын
It does depend on the level of withdrawal. Sequence of returns is important too. This is one of those rare periods where the risk adjusted return prospects of bonds is greater than that of equities. Sensible risk management requires us to appraise the level of excess return we are getting for each unit of risk. Currently, there is zero excess return expected from equities, so some may consider that the extra risk is not worth taking. It’s a bit like having a choice between being handed £100, or having to cross a busy road to be handed £100… You’d choose not to cross the road. But if the reward for crossing the road was £150, you’d probably take the calculated risk and do that instead. At the moment, bonds are metaphorically giving the same £100 as equities are, but you don’t have to cross the road.
@hellholehere
11 ай бұрын
My portfolio has been dragged down by holding bonds, nearly all commentators over the years said diversify and hold bonds with equities. I think the theory being they don’t drop when equities drop. However all my bond funds down by around 30% whilst equities have recovered. Getting 5-6% on fixed income with no risk cannot be dismissed as a bad idea when looking at the past performance of bonds.
@MikePhillips-pl6ov
11 ай бұрын
I'm in a similar place. Now thinking of a mix of equity funds, bond funds, and a 12 month fixed interest account before the rate drops further.
@chrisbourne-retirementplanner
11 ай бұрын
High quality bonds do tend to show negative correlation with equities during most stock market crashes, but the reason for both major asset classes falling last year and this was because of a number of factors… first, how bonds had become so expensive due to years of low rates and QE, and then how interest rates were suddenly hiked so rapidly with little warning. It is historically rare to see such negative alignment with fixed income and equities. As mentioned in another comment though, it’s important to understand the specific reasons for that performance, and then assess the current value and whether those specific circumstances are likely to repeat themselves given our current position. We have moved from a position of high risk two years ago (bonds had overperformed for many years), to a position of opportunity (values have corrected and monetary policy will start to become more accommodative).
@alastairford7145
11 ай бұрын
Great video Chris, as always. When you do your LifeStrategy review, could you touch on whether they're suitable for people in drawdown, please? In particular, if equities and bonds become uncorrelated again, would it be better to hold separate equities and bonds funds instead? Thanks!
@simony2801
10 ай бұрын
I think the idea is that the mix of shares and bonds reduces the overall volatility which is the big enemy when in drawdown.
@rockycottage5188
10 ай бұрын
With a cash flow ladder in retirement it is probably sensible to keep your equity and bonds separate for years 3-5 (years 1-2 would be cash/premium bonds etc) - for year 6+ you can blend equity/bond in self-balancing lifestyle fund split on risk profile - year 10+ you can also blend with more adventurous split. I’m in the global tracker camp but Vanguard fees not as competitive as others
@alastairford7145
10 ай бұрын
This is exactly my thought@@rockycottage5188. My feeling is that for simplicity just having 2-3 funds in the appropriate proportions for the different rungs of the cashflow ladder would be better than having multi-asset funds.
@alastairford7145
10 ай бұрын
Agreed @@simony2801, but if you're in drawdown with a LifeStrategy 60 and equities take a dive, you can't just sell the bonds, you are forced to sell some equities, which seems less than ideal. Unless I'm missing something.
@chrisbourne-retirementplanner
10 ай бұрын
Good discussion above - I will try to figure this into my video 👍🏼
@petearmstrong2778
11 ай бұрын
Two issues with unknown outcomes that are picking up traction. 1) BOE selling gilts/bonds under QT before maturity which will incure huge losses to be picked up by the taxpayer 2) the amount of debt especially the US that has to be rolled over in next 2 years - will there be buyers? will the rates be higher to attract buyers? Once the Reserve Banks start returning to the norm then a more positive outcome should be present. Experts are unclear and certainly no consensus though.
@chrisbourne-retirementplanner
11 ай бұрын
Hi Pete. It’s the US debt that I think is the biggest issue. Mainly from the point of view that they won’t have any capacity to come to the rescue should there be any other economic event that blindsides us.
@elephantandcastle838
11 ай бұрын
So then there is the usual uncertainty over the future direction of travel. More important is your age and personal circumstances. If like me you have stopped working and are 6 years from a UK state pension you might be looking at bonds and money market for 6 years income, and then some equities into the mix thereafter
@MikePhillips-pl6ov
11 ай бұрын
Thanks for this, am in exactly the same position as you. Six years to state pension age, not working, some money to invest rather than having cash in the bank. Would you do all you suggest and nothing else, or also some in a fixed rate income bond, say for one year?
@chrisbourne-retirementplanner
11 ай бұрын
Hi Mike. The main issue you’ll encounter with a 1 Yr Fixed Rate Bond is reinvestment risk - that is the risk that interest rates won’t be as favourable when the bond matures. It is certainly sensible to spread risk though.
@elephantandcastle838
10 ай бұрын
Just to add that if you were looking for 6 years reliable income, creating a bond ladder (in gilts maturing within 6 years and aligned to when the income is required) is probably the way to go, though this offers no protection against inflation unless you go for linkers. Bond funds are a useful hedge against equity volatility but usually contain all maturity dates - the longer dated ones in the fund can be as volatile as equities
@elephantandcastle838
10 ай бұрын
@@MikePhillips-pl6ov see my comment
@daveharruk
11 ай бұрын
The only mistake that people might make would be to keep holding short term money market funds too long. Currently it makes a lot of sense to hold these. Also,the main thing I see from the graph you showed is that there is a high chance that stocks will rebound by 20-30% in the year after terminal rate.
@chrisbourne-retirementplanner
11 ай бұрын
Hi Dave. There is certainly a chance they could, but there is an equal chance they could fall by 10% too. Like I said, a bit of a mixed bag for equities in the year after terminal rate. I fear we may be sleep walking into disaster with money market funds and it could cause the most significant financial disaster in decades… Details to follow soon!
@beanykey
11 ай бұрын
What would be the cause of that disaster? Apart from earning a lower return than you might have in bonds.
@chrisbourne-retirementplanner
10 ай бұрын
@@beanykey Tune into my next vid as I will explain it all there.
@russellrobinson8179
11 ай бұрын
Hi Chris I’ve just retired at 52 I have been mostly investing in Global Equities/ Gilts / 1 Year Fixed savings . Should I now think of putting a reasonable amount in a Bond Fund like VAGS. I appreciate your help . Thanks Russell
@chrisbourne-retirementplanner
10 ай бұрын
Hi Russell, while I can’t pass comment on individual funds, the risk adjusted return prospects for high quality bonds are good versus equities, and it does make sense to diversify this geographically.
@01302
11 ай бұрын
I'm writing this before watching, I feel negative due to the dominance and valuations of the companies at the top of the s&p. Hopefully I'm wrong!
@chrisbourne-retirementplanner
11 ай бұрын
Thank you. There’s no doubt some of those valuations are toppy to say the least! At least on a historical basis.
@StewartyBoy1987
11 ай бұрын
Great video, very interesting, what options would be viable within Vanguard outwith life strategy? Quite a few bond funds there - confusing to know what would be best for increasing exposure. Currently 100% equities in my pensions across FTSE global all cap (50%) S&P 500 (40%)dev world all cap (10%) - would rather sell proportions of these and buy one bond fund. Great videos also - subscribed & liked 👍🏻
@dudleyjoseph9485
11 ай бұрын
I'm looking for similar, basically what's a good bet bond fund on the Vanguard platform. Ramin over at Pensioncraft I think has a decent video on this.
@Sabhail_ar_Alba
11 ай бұрын
Vanguard don't currency hedge their funds. Worth remembering if investing larger amounts in international funds.
@StewartyBoy1987
11 ай бұрын
@@Sabhail_ar_Alba do you mean their equity funds I’m invested in? I was looking at moving things around to about 70:30 between the above 3 equity funds and the 30% in VAGS Which is GBP hedged?
@chrisbourne-retirementplanner
10 ай бұрын
Hi there. You’re doubling down a lot on the US with current exposure. Note to the comment above - Vanguard hedge out currency risk on the fixed income element of many of their multi asset strategies, including LifeStrategy funds.
@StewartyBoy1987
10 ай бұрын
Thanks for the reply Chris! Love the videos. I’m quite comfortable with high % of US exposure as I feel they will do well over the long term - I’m 25.+ years away from retirement. Do you know of any allocation tools I can play around with, something I can plug vanguard funds into to check exposures etc - unsure if I can do this on the vanguard site before selling ?
@marketsqueezer
10 ай бұрын
Hi, what is the difference between the US corporations are printing money out of blue air using bonds and EU banks printing money out of blue air?
@chrisbourne-retirementplanner
10 ай бұрын
The amount of time it takes for borrowing costs to impact profits.
@Clampers
11 ай бұрын
I am neutral Chris. Great video as ever.
@chrisbourne-retirementplanner
11 ай бұрын
Thank you! There are headwinds, as well as some promising green shoots. Nothing would surprise me over the next 12 months.
@adambritain5774
10 ай бұрын
This video is proof (if it were ever needed) why it literally pays to pay someone who know what they’re talking about when it comes to things like this. In terms of knowing where the market is, I haven’t got a clue. I find yours (and James’) videos fascinating but i am happy to admit i know absolutely nothing about investments so i just put £100 a month in to a Vanguard Life Strategy that (hopefully) in three decades time will come in useful.
@chrisbourne-retirementplanner
10 ай бұрын
Well to be honest Adam, you probably know more than a lot of people who make out they know more… nobody can say which way the market is going. They can make educated guesses, but that’s about it. Admitting that, and being passive about investing, will probably save you from a lot of mistakes.
@adambritain5774
10 ай бұрын
@@chrisbourne-retirementplanner Thanks for the response. I put the same amount in a cash ISA for the kids every month as well and once we have more than zero spare money i'll up our contributions.
@ianjohnson2866
11 ай бұрын
I really enjoy your videos Chris but this is so confusing about bonds. I have a DB scheme when I retire in a couple of years that will cover basic living. I’ve a DC scheme invested in a SIPP with LS100 (~£130k) that I’m not planning to touch for at least 5yrs after retirement but I’m also still contributing to that fund. I don’t know if I should be adding some bonds in there now while interest rates are up or just stick to the LS100 plan 🤷🏻♂️
@chrisbourne-retirementplanner
11 ай бұрын
It’s impossible to predict what will happen Ian, but the advantage of bonds is that if you do decide you need to access money earlier than intended, holding some bonds should dampen volatility in your portfolio, which should provide some peace of mind. The fact that the return expectation from both asset classes is similar actually makes this risk v reward trade off easier than it usually is.
@ianjohnson2866
11 ай бұрын
@@chrisbourne-retirementplannerThanks Chris, you make a compelling case for bonds. I’m bought into Vanguard as you can see, I don’t want to get into a mixed LS fund as well as my LS100. I notice they do have a good number of pure bond funds but you make reference in the video to “global aggregate” bond funds. Do any of the Vanguard bond funds fall into this category? Would I be right in thinking that once bank interest rates do start falling again, that would be the time to consider moving bonds back to equities? Thank you.
@clivedyer17
11 ай бұрын
My glass is half empty having seen a 3% return on the pension fund over the last 6 years, so considering short fixed term income products
@chrisbourne-retirementplanner
11 ай бұрын
Better times will return, just remain consistent 👍🏼
@joncarter6363
11 ай бұрын
Hi Chris, would you consider Bond ETFs as opposed to Bond Funds, or do they have any different characteristics? Thanks
@dudleyjoseph9485
11 ай бұрын
Bond ETF is a bond fund.
@chrisbourne-retirementplanner
11 ай бұрын
Hi Jon. Essentially they do the same thing. The only major difference between them is how frequently they’re priced throughout the trading day.
@joncarter6363
11 ай бұрын
Thanks Chris. I think you mentioned longer term bonds as a better option as you would lock in the higher rates for a longer period. Is that correct?
@chrisbourne-retirementplanner
11 ай бұрын
@@joncarter6363 Hi John. Longer term bonds would lock in the rate for longer and are also more sensitive to interest rate movements. Any downward movement would therefore be more positive.
@joncarter6363
10 ай бұрын
Ok, thanks. I have some irredeemable prefs, so I am assuming they work the same way as longer term bonds, or are there differences?
@timlodge8267
11 ай бұрын
If you were holding bonds for the last 2 years you would have lost 30%.
@chrisbourne-retirementplanner
11 ай бұрын
Exactly Tim, hence why it’s important to seriously consider their current valuation point.
@timlodge8267
11 ай бұрын
@@chrisbourne-retirementplanner A lot of my work colleagues with a low risk tolerance were advised to put their redundancy into bonds as it was risk free some 2.5 years ago now they are looking at a 30% loss.
@analogueman5364
11 ай бұрын
Depends on tge bonds. There are many types - the longer the duration the worse with gilts especially bad. But then equally they should fair the best when rates fall.
@jstoner9029
11 ай бұрын
Always drive down the road with your eye focused solely on the rear view mirror. Don’t worry about what is ahead of you. 😉
@tomd5678
11 ай бұрын
Timing is ..........................everything
@stephen1189
11 ай бұрын
Hi Chris, where can I access this data from Vanguard?
@chrisbourne-retirementplanner
11 ай бұрын
Unfortunately Stephen the document itself is for professional distribution only, but I’ll do my best to keep sharing insights in my videos.
@bob98765
10 ай бұрын
I'm curious about the terminal rate graph for the Bank of England rate rises since 1970. I'm pretty sure that until 1997 when Gordon Brown created the Bank of England Monetary Policy Commitee (MPC) to set the base rate, thereby freeing the Bank of England's base rate setting from political control by the Chancellor of the Exchequer the rate was often set for political purposes. For example being lowered shortly before the government of the time called a general election, having hyped the economy, only for them to then have to apply the brakes pretty swiftly once the election was over. Or is my memory fooling me?
@chrisbourne-retirementplanner
10 ай бұрын
Hi there. There would have been some elements of that, but those changes would have been transient and not part of rate rising cycles.
@giuliovuolo1
8 ай бұрын
Long term it does not look great, because of demographic changes, the cost of adapting to climate changes, they will be a drag on resources, via direct costs and taxation, that will reduce investments, so reduce productivity gains, so longer term reduced real returns, and this will reflect on share prices. I don't feel we will see in the next decades the same real growth we had in previous ones. Hopefully I am wrong.
@vinay4886
11 ай бұрын
I’m positive over equities but negative for govt bonds. Who wants to lend money to inefficient and corrupt western govts! Unfortunately I hold a lot of gilts that have gone down in value in the last 12 months. Finance KZitemrs have been promoting bonds as moving in an opposite direction to equities in a high interest environment - very disingenuous and clearly untrue. I have come to realise that the best buffer for equities is time, not bonds! Hold the shares for long enough and use DCA and they will return true value in time.
@chrisbourne-retirementplanner
11 ай бұрын
Hi there. I think if finance KZitemrs have said that bonds move in the opposite direction to equities in a high interest environment then they either don’t understand what they’re saying or you’ve misunderstood the message - a rising interest, high inflation environment is the absolute nemesis of fixed income. What they may have said is that fixed income should offer negative correlation with equities in a typical stock market crash, which historically speaking is quite true. During these times, high quality fixed income tends to benefit from a ‘flight to safety’. Gilts will have been hit badly by the environment we’ve experienced over the last two years, but it’s important to understand the specific reasons for that performance, and then assess the current value and whether those specific circumstances are likely to repeat themselves given our current position. We have moved from a position of high risk two years ago (bonds had overperformed for many years), to a position of opportunity (values have corrected and monetary policy will start to become more accommodative).
@daveandjanwoolf8078
11 ай бұрын
Not optimistic on the UK (particularly FTSE250). Economy has been held up by Consumer spending. I believe we are now witnessing the real impact of rising interest rates and inflation. Retail spending is falling and GDP is stagnant. The 12% fall in the Diageo share price (due to big fall in demand in South American Market) is an indication that the premium end of the market will be hit first. Unemployment will start to rise. Visit some Northern Cities and see how dire things are - a burger on a bun for £1 is not a good sign!
@chrisbourne-retirementplanner
10 ай бұрын
Yes, and interest rate rises usually take around 18 months to hit as well due to the lag on fixed term financing costs. Higher unemployment was something western governments were targeting though - it was too low coming out of the pandemic and such a tight labour market made it extremely difficult to keep wage price inflation under control.
@kite9039
11 ай бұрын
How do I buy bonds?
@chrisbourne-retirementplanner
10 ай бұрын
To buy direct bonds you’d use a stockbroker or the government’s Debt Management Office. To buy bond funds, you can do that on any direct to consumer investment platform like Vanguard, AJ Bell, Interactive Investor etc.
@tancreddehauteville764
11 ай бұрын
Nah, I stay away from bonds. The only bond I like is James Bond! 😀
@chrisbourne-retirementplanner
11 ай бұрын
Well, ‘Never Say Never Again’.
@tancreddehauteville764
11 ай бұрын
@@chrisbourne-retirementplanner LOL!!! 😆🤣
@dyslexicmammoth
10 ай бұрын
I have no feeling. Just keep doller cost averaging every month 👍🏼
@chrisbourne-retirementplanner
10 ай бұрын
Just blocking out the noise and carrying on is the best way to play long term investing.
@johnwatson3616
11 ай бұрын
Im neg currently. Until Israel calms down & Russia/Ukraine gets resolved (to a lesser extent) I see the markets just bouncing around as they have this year.
@analogueman5364
11 ай бұрын
Equity markets yes, bond markets different
@chrisbourne-retirementplanner
11 ай бұрын
Thanks John. It really seems like we’ve experienced a particularly tumultuous period over the past few years.
@FlyingFun.
11 ай бұрын
Bonds are a good idea now but make sure they are very low risk. The next few years are going to be a blood bath of zombie companies going belly up under the pressure of higher interest rates. The problem still with bonds is currency fluctuations... Im sticking to the plan of a healthy mix of bonds and world funds that match my age/journey but i have cash in the bank on 1 year fixes getting 6 to 7% because i dont know if the rate rises are actually done yet.
@chrisbourne-retirementplanner
11 ай бұрын
That is true Nigel for non sterling denominated assets. With that in mind it’s probably worth noting here that funds like LifeStrategy hedge out the currency risk.
@howardsmith8723
11 ай бұрын
Positivish.
@chrisbourne-retirementplanner
11 ай бұрын
Thanks Howard. What do you think are the biggest risks on the horizon?
@howardsmith8723
11 ай бұрын
@@chrisbourne-retirementplanner US Fed overshooting on interest rate rises impacting US growth and equities. Nevertheless I've learned not to second guess the markets and pound cost average for the long term.
@ciaoatutti11111111
11 ай бұрын
Sorry to be the party killer 60:40 may be good but still the guy taht had the 5 year fixed at 6% would beat you for both higher growth and less (null) volatility.. After 5 years there will be another prediction
@chrisbourne-retirementplanner
11 ай бұрын
That would depend on whether the return is in the upper 50th percentile or lower. If in the upper, the 5 year fixed wouldn’t win. It would also offer no flexibility to exit early and pivot to a different strategy because there would be penalties. Cash generally gets beaten more often than not.
@ciaoatutti11111111
11 ай бұрын
@@chrisbourne-retirementplanner that is true the other way round as well... Timing the market is the main tempyetion for investors. If I need to keep my investment frozen for 10 years I prefer the lower volatility and risk
@georgeyung3546
11 ай бұрын
Vanguard just pulled out of China with billions. But they didn't mention how much they have lost in China. Did they have their fingers in the Evergrande pie?
@chrisbourne-retirementplanner
11 ай бұрын
I guess we’ll find out in time. There are many obstacles to investing in China.
@Banthah
11 ай бұрын
Very few Financial Planners burst on to the scene…
@chrisbourne-retirementplanner
11 ай бұрын
😂👍🏼
@charlesoleary3066
10 ай бұрын
It’s more secure than the cash in your bank account because you don’t actually own the cash in your bank account
@adriangabba
10 ай бұрын
please explain
@chrisbourne-retirementplanner
10 ай бұрын
True. He means your cash in a bank becomes part of the bank’s own assets. You are simply a creditor of the bank, and they are able to use your money to fund their other activities. That is why there is a limit to compensation if a bank goes bust… the FSCS is just an insurance scheme that all deposit institutions pay into - your own money would effectively have been lost, or if there is anything left it would be frozen with all of the banks remaining assets and dispersed to creditors in order of their priority.
@davidcapurro2594
11 ай бұрын
Concerning your question I have no idea therefore I’m neutral.
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