Pension loss

tgon

My annual statement for one of my non-contributory stakeholder plans with a fund value of £25k made an investment loss of £1200 in the past year (calculated by using the last years transfer value).

Typical of today's investments (Av UK Equity S2 & Av European Equity S2) or perhaps my 1% fund charge would be better placed in another policy elsewhere?

dunstonh

My annual statement for one of my non-contributory stakeholder plans with a fund value of £25k made an investment loss of £1200 in the past year (calculated by using the last years transfer value).

Not unexpected as 2011 was a negative year on the markets.

Typical of today's investments (Av UK Equity S2 & Av European Equity S2) or perhaps my 1% fund charge would be better placed in another policy elsewhere?

Its badly invested if you have it only split between those two funds but it isnt the funds themselves that are responsible for the loss. It was the the fact the two markets you were in suffered a bad year. It does happen. When they say investments will go down as well as up that means they will go down as well as up. You cant have them going up all the time. They have to zig zag their way there. However, you ought to do something with your dire diversification. You may also need to look at your risk profile if you cant handle a small 4% loss in a 12 month period.

CannySaver_2

Hi

Again I'd agree with Dunstonh.

Investments rise and fall and this represents only a small loss, look at the fluctuations in 2007 and 2008 for a much steeper fall!

The way your pension is invested should be looked at though, very little diversification between non correlated assets. Generally markets move in a similar direction you should therefore look to invest in asset classes which perform differently, for example have some exposure to fixed interest (corporate bonds and gilts), property, even cash.

Have you taken advice or decided on the fund choice yourself?

The Canny Saver

tgon

Thanks for your comments. I'm certaintly not adverse to market fluctations but a narrowed investment group is a different matter and one which I can change. I'm searching for an IFA on this and retirement planning in general at the moment.

atush

I agree, 2011 was a bad year for markets. so you should expect some loss (and I had losses on pensions invested in the markets but a huge rise from one that is invested almost solely in bonds and gilts).

You have a poor spread, IMHO. Too much in europe, maybe too much in UK, nothing in USA, asia and emerging markets. Not to mention, bonds, gilts, comodities, property etc.

I think you just need to review your spread of investments.

dunstonh

If you are making regular contributions, then falls in the market in the short term are very good news. Falls only really become an issue in the years leading up to commencement of the pension. By that time, you would hopefully reduced the risk and no longer be subject to those falls.

atush

Gotta love Pound cost averaging