works pension, where to invest in the short-term

wellsie82

hi all

im 26 and have been with my current employer for 3 years, i have built up a company pension fund with them to date of approx £5k, im on £15k ish and contribute £80 before tax each month into another pension

i check my investment on a regular basis and the value seems to be erroding by the week

obviously with my company pension being a company one the choice of funds are limited to say the least, currently im 25% in overseas equity and 75% in uk equity

would it be a good idea (if only to preserve my capital in the short-term if nothing else) to consider moving everything out of these funds and going into cash?

appreciate that with cash it's got little chance of growing but at least it'll preserve what ive already built up, and when in say 12-24 months time the markets have improved i can pick up where ive left off and invest the lump sum at cheaper costs (unit prices)

daft idea or am i asking a stupid question?

Retired_I.F.A.

That's the whole point of having the ability to switch.

setmefree2

Hi

I'm not advising you what to do at all but I just thought I'd let you know that I have put my pension into cash and guilts. I know some of my collegues have done this too.
The question is which do you think will reduce the value of your pension more - inflation or potential falls in the stock market in the US and UK? Are there any other funds you could invest in? What emerging markets does your pension offer?

All The Best

SMF2

wellsie82

SMF2,

Fair point about the risk of inflation, i just think the markets in general have much further to fall and ive already seen enough of the value erode so far this year already

The choice of funds available is poor to say the least, off the top of my head the options are european, uk, us, far east and a few others, there's nothing in terms of emerging markets which is where id like to be able to put at least some cash into

im also running my own sipp alongside it which offers greater freedom

thanks for your comments and thoughts

setmefree2

wellsie82 wrote: »

i just think the markets in general have much further to fall and ive already seen enough of the value erode so far this year already

Yup me too. Go with your instincts and choose cash if you think that is right..after all presumably you are still investing in the stock market with your SIPP....

wellsie82

setmefree2 wrote: »

Yup me too. Go with your instincts and choose cash if you think that is right..after all presumably you are still investing in the stock market with your SIPP....

i decided to move it all into cash in the end, as you said go with your instincts, i'll surely face a tougher decision when it comes to taking it out of cash, the question then will be "is this the right time?"

yes still in the markets with my sipp, in october i'll be able to transfer over the other two thirds of my pension from L&G (currently in protected rights) so i'll be able to sort the whole thing out then, in the meantime im partly in agriculture, high income & japan (all 3 in unit trusts), silver in an etf and a few equities im bullish on

once the protected rights can come over later in the year i'll come out of equities altogether i should imagine and end up in half a dozen unit trusts till the whole recession blows over and the dust settles before reassessing

EdInvestor

It's so typical of the mug punter to buy high, sell low. :rolleyes:


I wonder if it will take a year before the OP realises the market has bottomed out, so he loses all the gains he would have made if he's stayed in and ends up buying high again.

EdInvestor

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/10/cmbolton110.xml


Some advice from Anthony Bolton, Britain's top fund manager for many years may be useful.

wellsie82

EdInvestor wrote: »

It's so typical of the mug punter to buy high, sell low. :rolleyes:


I wonder if it will take a year before the OP realises the market has bottomed out, so he loses all the gains he would have made if he's stayed in and ends up buying high again.

i dont feel as though ive brought high, the cash has all been taken out of my pay on a monthly basis for the last 3 years so its not as if i made a lump sum investment 12 months ago and im now pulling the plug, still though, i see where you're coming from but then no-ones perfect

at the end of the day, if the opinion amongst most is that the markets will fall further before they get better then surely hopping off now and getting back in when fund prices are a) cheaper, and b) heading north is better?

The good news is that I believe we are well over half way through the current bear market

thats confident stuff, i for one thought this would drag on for 3-5 years and not 2 years which is what he's saying

TH1878

EdInvestor wrote: »

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/10/cmbolton110.xml


Some advice from Anthony Bolton, Britain's top fund manager for many years may be useful.

Top post and excellent advice!

bigbloke45

Wellsie82, there's an old adage in the stock market "buy into a falling market, sell into a rising market". You are doing the exact opposite! There will several "bear" markets before you take you pension, shouldn't you be buying equities as they fall in value? When the market picks up again, they will be much more than cash or gilts.

No-one can time markets, by trying you are more likely to buy high and sell low.

Get back in there and enjoy the ride. There's no such thing as a loss until you sell!