Any Pension Fund Experts - advise pleae!

RammytheRam

I've got a pension with HSBC and have split money in funds as follows with the hit I have taken in the last couple of weeks. I made a return of about 13% in the first year (nice!) but this years been a disater (obviously not just for me!) The % down figures are on what I originally put in 20 months ago so I've lost about a quater in value from my original investment at the moment

50% in Global Equity Fund - Down 24%
25% in FTSE All Share Index Traker Fund - Down 27%
25% in European Equity Index Traker Fund - Down 23%

I've still got 25 years to grow the money but heres my two questions

1. Do I swap things around ie out of FTSE into Global? I can do this at any time without charge

2. I've got a £2k lump sum to go in shortly - where should I put that? Which do you think will recover best/quickest

Thanks and regards

dunstonh

Your investment spread is medium/high risk. So a drop was always going to be on the cards at some point. Typically once every 5 years you should expect a drop like this and your fund choice didnt have any downside protection.

The spread isnt very diversified and using the HSBC pension for tracker funds is expensive. Does the medium/high risk profile (potential for minus 50-60% in a year) match your risk profile?

RammytheRam

Hi Dunstonh

Sorry for the late reply. Been away for a few days.
TBH I'm relative happy with the risk side of things. I started a pension late 30's so need to build up a fund quickly if possible over the next 10-15 years then go for 'safer' bets the nearer I get to retirement.

I've stopped the contibutions for the moment (don't really want to throw good money after bad) and will restart when I think the market has bottomed out - whenever that will be.

dunstonh

I've stopped the contibutions for the moment (don't really want to throw good money after bad) and will restart when I think the market has bottomed out - whenever that will be.

I have to disagree with that action. You will miss out on these cheap purchases. Remember that the stockmarket drop has been less than we saw 8 years ago. So, did you stop it then as well?

Joe mug punter typically goes in when its high and pulls out when its low. Its a roller coaster ride like this but just ride the wave. Alternatively, keep paying but change the fund spread to something lower risk. Dont just stop your retirement provision because it will be very easy to get used to having that extra money.

RammytheRam

Cheers,:beer:
Thanks for the advice
I nnever looked at it that way
Regards

geoffH

Speaking of which....I'm thinking of cashing-in my pension now for a lump sum and small monthly pension. Should I do it now or wait a while? The quote I've received is valid for 30 days is it like to change significantly after that. It's with Prudential and is a mix of protected funds and other. The quote does seem less than one I had in May. I'd use the limp sum to pay off some credit cards.

ayresrock2

I have a similar spread to rammy above and have seen my investment drop by 1/3 since the beginning of the year
strangely i also have equitable life also ftse tracker which has already bounced back while hsbc ftse still shows major loss. - have been VERY dissatisfied with HSBC overall and their advice is really rubbish - even 6 weeks ago there was no advice to move into cash - now it must be too late?

as im 65 and was going to defer until 70 though the actual arithmetic of taking now and investing the annuity (bird in the hand tactic) versus leaving until then is tricky to work out - seems the former probably gives you a better overall return in the end. what do people think?

dunstonh

have been VERY dissatisfied with HSBC overall and their advice is really rubbish

HSBC advice is not rubbish. It is compliant within the remit of their advisers. I think you are expecting a service you are not going to get with them.

even 6 weeks ago there was no advice to move into cash - now it must be too late?

No-one has a crystal ball. 6 weeks ago it was really too late to move into cash. There comes a point when you just ride the wave of volatility and come out the other side. Moving your money round to try and time the market usually results in losing more money in the long run then sitting tight where you are.

as im 65 and was going to defer until 70 though

You should have been in cash and gilts years ago.