Safer pension fund advice

philwiththepill

Is it wrong to treat switching funds like buying and selling shares when it comes to pensions?

ReportInvestor

It's never wrong to switch to the right fund - especially this early in your pension savings plan.

But I would say that it was wrong to attempt to switch from shares to fixed interest in an attempt to "time" the market.

dunstonh wrote:

All can be utilised even in a cautious portfolio.

I assume that pwtp has worked out that this is IFA speak for "4/6 of the investment areas I mentioned earlier are higher risk than your current fund".

EdInvestor

What fund choices does the OP have?

An "Equity Income" fund will normally be less risky (drop less, recover more quickly) in a recession that a straight Equity fund.

Commercial property is "not correlated" with equities, ie, the market does not go up and down with the stockmarket.

Both provide useful diversification and lower risk while also offering good returns.

I'm not convinced of the usefulness of bonds compared with cash - the extra risk does not seem to be matched by additional returns.

Overseas, commodities and smaller company funds are all higher risk.

dunstonh

I assume that pwtp has worked out that this is IFA speak for "4/6 of the investment areas I mentioned earlier are higher risk than your current fund".

As I never mentioned what percentages would go into each of the sectors available, there is no way to make that assumption. Currently, he is 100% into one [just above] medium risk fund. A more cautious portfolio may only have 3% in Japan and 5% into N America etc. With fixed interest, global bonds and property included, that brings the risk profile right down despite the inclusion of a wider range.

I'm not convinced of the usefulness of bonds compared with cash - the extra risk does not seem to be matched by additional returns.

This of course only applies at this very moment in time as they are generally having a weak period. However, that wont always be the case. The real benefit is using them on a rebalancing portfolio.

ReportInvestor

dunstonh wrote:

As I never mentioned what percentages would go into each of the sectors available, there is no way to make that assumption.

I didn't assume, or say, you had.

philwiththepill

The funds available to me from L&G can be found on the link below:

https://www80.landg.com/DocumentLibraryWeb/Document?reference=W10577IndSHPInvestmentFund.pdf

dunstonh

The L&G stakeholder doesnt offer the greatest range of funds but that is normal for stakeholders and its better than many others. There are 8 funds I would use there in building a portfolio, possibly 9-10 depending on the value in the pension.

The funds wouldnt change (much) with the different risk profiles but the percentage allocation into each would vary.