Its not worth haveing have a pension

taking_stock

Baggiebird1nil wrote: »

I have been watching my pension fund over the past 7 weeks and to my horror it has lost over £1500! Since 8th June until today it has lost £473.90! I pay in £150 per month and my employer matches it. That's £300 per month going down the swanny! I might just as well put my hand out of the window on payday and chuck it out. So as I was 55 on Sunday I have decided that I will take my pension now, put the money in an ISA and worry about old age when it arrives. Can't see the point in putting money into something that is losing month after month.

impossible to tell if 1500 is wirth worrying about unless we know what percentage of your fund it is.
when you say put it into an isa instead, it's clear you have no idea about investments or what a pension is supposed to be.

margaretclare

Baggiebird1nil wrote: »

I have been watching my pension fund over the past 7 weeks and to my horror it has lost over £1500! Since 8th June until today it has lost £473.90! I pay in £150 per month and my employer matches it. That's £300 per month going down the swanny! I might just as well put my hand out of the window on payday and chuck it out. So as I was 55 on Sunday I have decided that I will take my pension now, put the money in an ISA and worry about old age when it arrives. Can't see the point in putting money into something that is losing month after month.

Incredible. Haven't you seen any news headlines, heard any news reports, seen any TV over the past few weeks? Heard of something called the Arab Spring? What do you think has been going on in Greece which affects the rest of the Eurozone and even affects us although we are not in the euro?

The whole point about investments is that they're long-term. 7 weeks is a mere drop in the ocean.

'Worry about old age when it arrives'? It's gonna be too late then to worry about anything, if you've chucked away any prospect of getting a better return on your investments. You're going to be one more poverty statistic.

I can't believe some people.

dtsazza

Baggiebird1nil wrote: »

I have been watching my pension fund over the past 7 weeks and to my horror it has lost over £1500! Since 8th June until today it has lost £473.90! I pay in £150 per month and my employer matches it. That's £300 per month going down the swanny! I might just as well put my hand out of the window on payday and chuck it out. So as I was 55 on Sunday I have decided that I will take my pension now, put the money in an ISA and worry about old age when it arrives. Can't see the point in putting money into something that is losing month after month.

What investments are you going to hold in the ISA, and why do you think that somehow these investments within an ISA wrapper will outperform the same investments within a pension wrapper?

Now that you're 55, you are no longer subject to what is the only major downside of pensions (the mandated lack of access until you reach a certain age). So to switch your investments to an inferior wrapper - the ISA - just because you're scared by the volatility of the investments that you chose, would be incredibly foolish.

Pension = wrapper, and the performance of the pension is guaranteed (rebate of all income tax, plus no CGT on assets held within it). The performance of the investments you may choose to hold can vary, but (unless you're doing something very unusual) you can hold the same investments inside a pension as you can outside of one.

Rob_192

dtsazza wrote: »

What investments are you going to hold in the ISA, and why do you think that somehow these investments within an ISA wrapper will outperform the same investments within a pension wrapper?

I have a horrible feeling she meant cash Isa, which makes it even worse!

hugheskevi

dunstonh wrote: »

Why is that a horror? my portfolio is down over £30,000 and it doesnt bother me at all.

I was just wondering if it has always been the case that losses don't bother you at all?

Although I am familiar with investing - and well aware that losses are inevitable - the losses still bother me more than profits please me. Even although my investments have performed very well, something as benign as a 5% correction irks me.

By this, I don't mean I would change investments as a consequence, but that in general losses annoy me and I am uncomfortably aware of them, so I definately can't say they don't bother me at all. This is even though I am quite early in the accrual phase so a falling market is by no means a bad thing.

I am also quite a bit younger than most of the regulars on this board, so was just wondering if others might have been more bothered by losses when they were younger? Or whether it is just a personal trait

dunstonh

I was just wondering if it has always been the case that losses don't bother you at all?

No. In my first crash I was newbie wreck. In my second crash (dot.com) it was uncomfortable but not as bad although it was drawn out over a longer period. In the credit crunch it was more "here we go again". This current blip hasn't even caused me to bat an eyelid. The events are very similar to this time last year. That doesnt mean you remain blind to events. Wider concerns like the banks starting to hold back funding to each other again is re-occurring at the moment which could lead to a repeat of 2008/9 still play on your mind. However, there is always something bad going on at all times.

I have got to the point that you know these times happen. You know what the investment volatility range is like and if you either accept it or you move down the risk scale.

I also use sector allocations for the investments based on risk profiles which have a maximum volatility factor that shouldnt be exceeded 95% of the time. That said, a period in the at 5% did occur at the height of the crash. However, its not 100% and nothing ever is.

My belief is that the more crashes/corrections you go through and the more you understand how these things work and that you dont have clue when declines are going to happen then the more you accept them when they do happen.

Thrugelmir

hugheskevi wrote: »

I am also quite a bit younger than most of the regulars on this board, so was just wondering if others might have been more bothered by losses when they were younger? Or whether it is just a personal trait

When my collective investment funds fall in value. Then its a buy signal.

The FTSE 100 closed today at 5775. The 52 week low is 4805.

So any investment made around the low point is showing a 20% gain.

Why worry about a 5% fall from peak?

Even more so if you invest for dividend income and reinvest same.

Lokolo

hugheskevi wrote: »

I am also quite a bit younger than most of the regulars on this board, so was just wondering if others might have been more bothered by losses when they were younger? Or whether it is just a personal trait

I have stopped looking at my funds on a daily/bi-daily basis and only look at them once a week, just because, like you, I get worried whenever I see a loss over a 1 month period of whatever, even though I am 40% up overall!