Good time to set up new pension?

ManicMum

Hello

just wondered if anyone thought it a good idea to set up a private pension now. I am thinking of cautious funds. Or would i be better to stash my cash in a fixed bond or something for couple of years until all this financial turmoil has passed (hopefully). Then set up private pension.

what are advantages of starting now rather than couple of years time if funds doing so badly. Please realise I am no expert!

Thanks:money:

Paul_Herring

what are advantages of starting now rather than couple of years time if funds doing so badly

If you buy them now, then if the prices do go up, you'll have bought them cheaply.

If you wait, and the prices do go back up, you won't be able to buy them so cheaply.

thor

Paul_Herring wrote: »

If you buy them now, then if the prices do go up, you'll have bought them cheaply.

If you wait, and the prices do go back up, you won't be able to buy them so cheaply.

or the prices might not go back up and you would have lost your money.

dunstonh

thor wrote: »

or the prices might not go back up and you would have lost your money.

Which is why you never invest in a single sector. Some sectors may go sterile for a while whilst others will not. Remember investing isnt just about following one index. You have dividend/income distributions, multiple stockmarkets, property and fixed interest funds.

It is highly unlikely that a stockmarket that is not in a bubble position and actually valuing companies less than their net asset value is not going to go up in the future. Where a bubble occurs then it can take a very very very long time for that to recover if that bubble was to burst.

MoneyTown

dunstonh wrote: »

It is highly unlikely that a stockmarket that is not in a bubble position and actually valuing companies less than their net asset value is going to go up in the future.

I hope that is a typo and not prophetic !

dunstonh

LOL - Its funny how a typo can change the whole meaning

I will correct it. thank you.

DavidLaGuardia

Ditto to what Dunstonh has said above, but pensions can invest in many types of asset including cash, so if you remained adamant about avoiding thie markets this doen't have to mean stopping your pension - just swich the fund.

jamesd

Now is an excellent time to be starting a pension. There's currently a sale on for investments of most types, excluding the most cautious types. There may be even lower sale prices later for a while but eventually prices will go back to normal and you'll get a higher profit from buying during the sales.

The general prescription for making money is to buy more at depressed prices and buy less during boom times. And switch from low volatility to high gradually during bad times and from high to low during boom times. This way you buy as cheaply as possible, lock away some of the gains and use them to buy cheaply again during the next downturn.

Pensions are long term investing. Just look to gain from the routine fluctuations that happen on a five to ten year timeline.

Locking money up in cash is a bad thing to be doing right now. It locks you money up so you can't buy at the low prices. The time to be doing it is during the next boom, taking some profit and locking up the cash until the next downturn, when you use it to buy at depressed prices.