May be of limited interest but just as i was thinking about finally canning my HSBC UK account, I learnt (from the MSE forum) about the new Global Money account, which is a simple add-on if you already have a current account with them.
As I understand it, you get a big-choice multiple currency account, and you can shift your money between currencies, both free of fees and at nearly mid-market rate. This would apparently allow you to keep currencies as an investment/hedge. Then you can also get a debit card which would allow you to pay in the local currency of the country you are in.
I don't think I've missed any catch, but please correct me if I have. Assuming not, then among other things its a tribute to the OpenBanking project started in 2017 which I was only dimly aware of until I read in an FT article the other day. Basically that has encouraged the wave of new banks, and currency exchanges such as Wise who want to offer bank services, all of whom have been eating HSBC's lunch. Now HSBC have had enough, and the winners are us punters. As a regular critic of the banking sector and what they've been allowed to get away with over the years, I feel duty bound to give a round of applause to this.
Gatehouse Bank moved my easy access from 2.8% to 2.9% this morning. Now whether that’s a late change from Decembers rate increase, or is in anticipation of this weeks BOE meeting, not sure. However, still doesn’t beat my Kent Reliance 3% ( only available to existing customers). Great to finally see some return from cash, although as we know still losing money due to inflation.
Hi all, I have a question about the (bond heavy) Vanguard LS20 fund - I know it's a passionate one for @PragueAddick . Most of my Vanguard ISA is in the LS100 (100% equity) - I'm in my early 30s so am in for the long haul. I moved a small portion over to LS20 in Sept 2021 thinking it would be a steadier option in case I wanted to use it for anything in the mid term - I now know that wasn't particularly well thought through, esp. given I already have a separate emergency cash fund in a savings account.
Hindsight is 20/20 and obviously LS20 tanked almost instantly after I bought in - that chunk of my ISA is now down about 20%. My question is this: given my plan is long term passive investing, should I take the loss on LS20 and go all in on equities? I know bonds are expected to creep back up to where they were over the next few years, but in the long term my assumption would be that the equity funds will outpace the bonds. If I was starting with the LS20 investment as a lump sum now I'd put it all into equities - just trying to work out if there's a solid counterargument for leaving the LS20 investment where it is.
Hi all, I have a question about the (bond heavy) Vanguard LS20 fund - I know it's a passionate one for @PragueAddick . Most of my Vanguard ISA is in the LS100 (100% equity) - I'm in my early 30s so am in for the long haul. I moved a small portion over to LS20 in Sept 2021 thinking it would be a steadier option in case I wanted to use it for anything in the mid term - I now know that wasn't particularly well thought through, esp. given I already have a separate emergency cash fund in a savings account.
Hindsight is 20/20 and obviously LS20 tanked almost instantly after I bought in - that chunk of my ISA is now down about 20%. My question is this: given my plan is long term passive investing, should I take the loss on LS20 and go all in on equities? I know bonds are expected to creep back up to where they were over the next few years, but in the long term my assumption would be that the equity funds will outpace the bonds. If I was starting with the LS20 investment as a lump sum now I'd put it all into equities - just trying to work out if there's a solid counterargument for leaving the LS20 investment where it is.
Any thoughts very welcome - thanks in advance.
@PragueAddick knows my views on this & I've attached Vanguard's Q4 newsletter for reference.
The main issue you have to remember is that the LS funds are index trackers and therefore will follow the market in good times & bad. Because of inflation, rising interest rates & Truss/Kwarteng 2022 was a very bad year for fixed interest. An active fund manager, especially one that manages a Strategic Bond fund can move out of UK Gilts & Bonds (to a certain extent) and into assets that might do better. Vanguard funds can't do this.
I've often get told that Vanguard are superb because their charges are low. Last year showed why paying an extra 0.4% for active management might save your portfolio.
And listening to Vaguards Webinar last week their Fixed Income bod said that Bonds might not recover until 2030 !!!
He said what??? Cue mass sale of Vanguard LS 20 and 40 and one unemployed bod 🤣
@hermann Golfie is generally correct. But fact is, LS20 has recovered about 6 points from its Kamikwaze low - which is a reminder not to over-react, especially at your age.
Nobody can yet be sure when and how bonds recover and whether the old 60:40 mix is finished - still less what should replace it. My tactic in your shoes would be:
- before selling anything have a plan for what you want to buy with the proceeds
- sell in smaller chunks, on a rising market. Set a target price for each sell.
- for the next few months read a lot about how people see fixed interest developing. At the moment I still think fixed interest will have a place as ballast in most portfolios. But especially on this, there are several people on here who understand bonds far better than I do.
@hermann First of all let me say I'm not an IFA so can't give advice, just an educated amateur. Early 30's and in for the long haul certainly means equities are the place to be and not gilts. Over any decent length of period in history (say 7 years) equities have always outperformed. Important that you have international spread not just UK. personally have always been overweight in USA and this has regularly outperformed. Agree Prague's advice on tactics. As to professional advice I would partly say it depends on amount involved although I personally have always been sceptical of the added value. How many funds/professional advisers were saying gilts and bonds were bound to fall at the start of 2022?
@hermann First of all let me say I'm not an IFA so can't give advice, just an educated amateur. Early 30's and in for the long haul certainly means equities are the place to be and not gilts. Over any decent length of period in history (say 7 years) equities have always outperformed. Important that you have international spread not just UK. personally have always been overweight in USA and this has regularly outperformed. Agree Prague's advice on tactics. As to professional advice I would partly say it depends on amount involved although I personally have always been sceptical of the added value. How many funds/professional advisers were saying gilts and bonds were bound to fall at the start of 2022?
I moved clients out of Bonds & into Absolute/Diversified Return strategies in Q1 last year. My SIPP was the same value on Dec 31st as it was in May as I didnt suffer much from the Truss /Kwarteng shambles in late September/early October. Still not holding any direct Fixed Interest funds.
He said what??? Cue mass sale of Vanguard LS 20 and 40 and one unemployed bod 🤣
@hermann Golfie is generally correct. But fact is, LS20 has recovered about 6 points from its Kamikwaze low - which is a reminder not to over-react, especially at your age.
Nobody can yet be sure when and how bonds recover and whether the old 60:40 mix is finished - still less what should replace it. My tactic in your shoes would be:
- before selling anything have a plan for what you want to buy with the proceeds
- sell in smaller chunks, on a rising market. Set a target price for each sell.
- for the next few months read a lot about how people see fixed interest developing. At the moment I still think fixed interest will have a place as ballast in most portfolios. But especially on this, there are several people on here who understand bonds far better than I do.
But what are other funds up by in that time, many much more than 6 points. My Pension was yesterday back at an all time high.
@hermann First of all let me say I'm not an IFA so can't give advice, just an educated amateur. Early 30's and in for the long haul certainly means equities are the place to be and not gilts. Over any decent length of period in history (say 7 years) equities have always outperformed. Important that you have international spread not just UK. personally have always been overweight in USA and this has regularly outperformed. Agree Prague's advice on tactics. As to professional advice I would partly say it depends on amount involved although I personally have always been sceptical of the added value. How many funds/professional advisers were saying gilts and bonds were bound to fall at the start of 2022?
I moved clients out of Bonds & into Absolute/Diversified Return strategies in Q1 last year. My SIPP was the same value on Dec 31st as it was in May as I didnt suffer much from the Truss /Kwarteng shambles in late September/early October. Still not holding any direct Fixed Interest funds.
Well done. Not many fund managers or IFA's were recomending that or even recomending it now! And let people not think it was just Truss/Kwarteng. Bonds were already vastly overvalued form all the QE and inflation was building so interest rates were going to rise anyway
He said what??? Cue mass sale of Vanguard LS 20 and 40 and one unemployed bod 🤣
@hermann Golfie is generally correct. But fact is, LS20 has recovered about 6 points from its Kamikwaze low - which is a reminder not to over-react, especially at your age.
Nobody can yet be sure when and how bonds recover and whether the old 60:40 mix is finished - still less what should replace it. My tactic in your shoes would be:
- before selling anything have a plan for what you want to buy with the proceeds
- sell in smaller chunks, on a rising market. Set a target price for each sell.
- for the next few months read a lot about how people see fixed interest developing. At the moment I still think fixed interest will have a place as ballast in most portfolios. But especially on this, there are several people on here who understand bonds far better than I do.
But what are other funds up by in that time, many much more than 6 points. My Pension was yesterday back at an all time high.
BTW - you are correct re HSBC, no catch.
Fine, but if @hermann held LS20 because he wanted "cautious", what would you have had him do? Bail out when it was -21%, and if so, the old question, into what, that meets the "cautious" criterion?. My point was simply, not to panic and end up selling at the bottom. Fortunately he hasn't, and is about 7% less poor as a result.
It's also useful that you've posted up the Lifers predictions as this illustrates the dilemma. Let's say @hermann and I sell LS20 today. What shall we buy with it today. ? Currently FTSE 100 is at 7778. What do Lifers expect it to do for the rest of the year? Most of the 38 respondents forecast it to go negative from here. Three whom I consider to have a better feel for markets than i do, forecast a decline of between 9% - 14%. You yourself forecast virtually zero growth. The most optimistic forecast calls for 2.9%.growth
Meanwhile we can pop along to Charter Savings Bank and take out a one year fixed interest bond, backed by the govt. guarantee system, and receive 4.1%.
I'm sure plenty of equities in one form or another are the answer for @hermann in the long term. But for the next 12-18 months? Not necessarily. Certainly, no rush...
A lot of what I read is painting a gloomy picture of the near term prospects for the market. I'm keeping a close eye on my assets which are currently split as property 40% (we will downsize next year and the cash released will be invested), cash 20%, equities 10% and private pensions 30% (effectively equities). My intention is to feed the released cash into equities via ISAs as far as possible but I'm in no rush for that at the moment. The 20k per person limit is a useful brake on the temptation to plunge in. I am more likely to be a seller than a buyer until there's more confidence about anyway. This might take six months, but who knows? Interest rate decisions today and tomorrow will likely serve to push up instant access rates a little bit, but longer term fixes are unlikely to move much as the rises are largely built in, I think. With inflation falling only very slowly, it's really difficult to identify a sound short term action that will preserve the value of your cash. My best return over the past 12 months has been my bet365 account, and that might be true for the next 12 too. Sorry bob!
A lot of what I read is painting a gloomy picture of the near term prospects for the market. I'm keeping a close eye on my assets which are currently split as property 40% (we will downsize next year and the cash released will be invested), cash 20%, equities 10% and private pensions 30% (effectively equities). My intention is to feed the released cash into equities via ISAs as far as possible but I'm in no rush for that at the moment. The 20k per person limit is a useful brake on the temptation to plunge in. I am more likely to be a seller than a buyer until there's more confidence about anyway. This might take six months, but who knows? Interest rate decisions today and tomorrow will likely serve to push up instant access rates a little bit, but longer term fixes are unlikely to move much as the rises are largely built in, I think. With inflation falling only very slowly, it's really difficult to identify a sound short term action that will preserve the value of your cash. My best return over the past 12 months has been my bet365 account, and that might be true for the next 12 too. Sorry bob!
Thanks for letting me know - I'll be having words with the Traders tomorrow.
He said what??? Cue mass sale of Vanguard LS 20 and 40 and one unemployed bod 🤣
@hermann Golfie is generally correct. But fact is, LS20 has recovered about 6 points from its Kamikwaze low - which is a reminder not to over-react, especially at your age.
Nobody can yet be sure when and how bonds recover and whether the old 60:40 mix is finished - still less what should replace it. My tactic in your shoes would be:
- before selling anything have a plan for what you want to buy with the proceeds
- sell in smaller chunks, on a rising market. Set a target price for each sell.
- for the next few months read a lot about how people see fixed interest developing. At the moment I still think fixed interest will have a place as ballast in most portfolios. But especially on this, there are several people on here who understand bonds far better than I do.
But what are other funds up by in that time, many much more than 6 points. My Pension was yesterday back at an all time high.
BTW - you are correct re HSBC, no catch.
Fine, but if @hermann held LS20 because he wanted "cautious", what would you have had him do? Bail out when it was -21%, and if so, the old question, into what, that meets the "cautious" criterion?. My point was simply, not to panic and end up selling at the bottom. Fortunately he hasn't, and is about 7% less poor as a result.
It's also useful that you've posted up the Lifers predictions as this illustrates the dilemma. Let's say @hermann and I sell LS20 today. What shall we buy with it today. ? Currently FTSE 100 is at 7778. What do Lifers expect it to do for the rest of the year? Most of the 38 respondents forecast it to go negative from here. Three whom I consider to have a better feel for markets than i do, forecast a decline of between 9% - 14%. You yourself forecast virtually zero growth. The most optimistic forecast calls for 2.9%.growth
Meanwhile we can pop along to Charter Savings Bank and take out a one year fixed interest bond, backed by the govt. guarantee system, and receive 4.1%.
I'm sure plenty of equities in one form or another are the answer for @hermann in the long term. But for the next 12-18 months? Not necessarily. Certainly, no rush...
Fair point re risk levels (if you were in the LS20), the lower risk end is much more difficult I guess (I still tend to go to the higher end of risk levels at the moment but will look to reduce in 3 years time).
I personally don't see the FTSE100 gaining much more momentum, but you still have dividends to consider. I jumped more back into the S&P500 as feel that has potential to regain further, and one of my best performers has been FTSE Developed Europe UCITS ETF, up 13% since June.
I'll probably salary sacrifice most of my bonus in March as tax efficient and the company tops it up by 10% if you do, will go as high a risk as possible with that, purely on the basis in my twisted mind I'm up nearly 70% before I've even invested it so can go risk heavy.
Comments
More good news on the Premium Bond front.
Prizes going up again from February
Value of prizes in January 2023
Number of prizes in January 2023
Value of prizes in February 2023 (estimated)
Number of prizes in February 2023 (estimated)
£1,000,000
2
£1,000,000
2
£100,000
56
£100,000
59
£50,000
111
£50,000
117
£25,000
224
£25,000
236
£10,000
559
£10,000
590
£5,000
1,116
£5,000
1,177
£1,000
11,968
£1,000
12,573
£500
35,904
£500
37,719
£100
1,159,432
£100
1,280,509
£50
1,159,432
£50
1,280,509
£25
2,617,902
£25
2,376,161
Total
£299,202,350
Total
4,986,706
Total
£314,347,875
Total
4,989,652
Same chance of winning , in terms of the number of prizes, but if you are lucky enough to do so, potentially the prize could be bigger.
I think you're asking too much @pragueaddick for a miserly dividend.
Sometimes you get what you pay for....... and don't always believe your actuaries and modellers.
As I understand it, you get a big-choice multiple currency account, and you can shift your money between currencies, both free of fees and at nearly mid-market rate. This would apparently allow you to keep currencies as an investment/hedge. Then you can also get a debit card which would allow you to pay in the local currency of the country you are in.
I don't think I've missed any catch, but please correct me if I have. Assuming not, then among other things its a tribute to the OpenBanking project started in 2017 which I was only dimly aware of until I read in an FT article the other day. Basically that has encouraged the wave of new banks, and currency exchanges such as Wise who want to offer bank services, all of whom have been eating HSBC's lunch. Now HSBC have had enough, and the winners are us punters. As a regular critic of the banking sector and what they've been allowed to get away with over the years, I feel duty bound to give a round of applause to this.
Hindsight is 20/20 and obviously LS20 tanked almost instantly after I bought in - that chunk of my ISA is now down about 20%. My question is this: given my plan is long term passive investing, should I take the loss on LS20 and go all in on equities? I know bonds are expected to creep back up to where they were over the next few years, but in the long term my assumption would be that the equity funds will outpace the bonds. If I was starting with the LS20 investment as a lump sum now I'd put it all into equities - just trying to work out if there's a solid counterargument for leaving the LS20 investment where it is.
Any thoughts very welcome - thanks in advance.
The main issue you have to remember is that the LS funds are index trackers and therefore will follow the market in good times & bad. Because of inflation, rising interest rates & Truss/Kwarteng 2022 was a very bad year for fixed interest. An active fund manager, especially one that manages a Strategic Bond fund can move out of UK Gilts & Bonds (to a certain extent) and into assets that might do better. Vanguard funds can't do this.
I've often get told that Vanguard are superb because their charges are low. Last year showed why paying an extra 0.4% for active management might save your portfolio.
And listening to Vaguards Webinar last week their Fixed Income bod said that Bonds might not recover until 2030 !!!
He said what??? Cue mass sale of Vanguard LS 20 and 40 and one unemployed bod 🤣
@hermann Golfie is generally correct. But fact is, LS20 has recovered about 6 points from its Kamikwaze low - which is a reminder not to over-react, especially at your age.
- before selling anything have a plan for what you want to buy with the proceeds
- sell in smaller chunks, on a rising market. Set a target price for each sell.
Early 30's and in for the long haul certainly means equities are the place to be and not gilts. Over any decent length of period in history (say 7 years) equities have always outperformed. Important that you have international spread not just UK. personally have always been overweight in USA and this has regularly outperformed.
Agree Prague's advice on tactics.
As to professional advice I would partly say it depends on amount involved although I personally have always been sceptical of the added value. How many funds/professional advisers were saying gilts and bonds were bound to fall at the start of 2022?
BTW - you are correct re HSBC, no catch.
It's also useful that you've posted up the Lifers predictions as this illustrates the dilemma. Let's say @hermann and I sell LS20 today. What shall we buy with it today. ? Currently FTSE 100 is at 7778. What do Lifers expect it to do for the rest of the year? Most of the 38 respondents forecast it to go negative from here. Three whom I consider to have a better feel for markets than i do, forecast a decline of between 9% - 14%. You yourself forecast virtually zero growth. The most optimistic forecast calls for 2.9%.growth
Meanwhile we can pop along to Charter Savings Bank and take out a one year fixed interest bond, backed by the govt. guarantee system, and receive 4.1%.
I'm sure plenty of equities in one form or another are the answer for @hermann in the long term. But for the next 12-18 months? Not necessarily. Certainly, no rush...
Either of you want to admit defeat yet? :-)
Interest rate decisions today and tomorrow will likely serve to push up instant access rates a little bit, but longer term fixes are unlikely to move much as the rises are largely built in, I think. With inflation falling only very slowly, it's really difficult to identify a sound short term action that will preserve the value of your cash.
My best return over the past 12 months has been my bet365 account, and that might be true for the next 12 too. Sorry bob!
Thanks for letting me know - I'll be having words with the Traders tomorrow.
I personally don't see the FTSE100 gaining much more momentum, but you still have dividends to consider. I jumped more back into the S&P500 as feel that has potential to regain further, and one of my best performers has been FTSE Developed Europe UCITS ETF, up 13% since June.
I'll probably salary sacrifice most of my bonus in March as tax efficient and the company tops it up by 10% if you do, will go as high a risk as possible with that, purely on the basis in my twisted mind I'm up nearly 70% before I've even invested it so can go risk heavy.