Move funds to something less volatile?

TBC15

What’s the purpose of the cash cushion if you don’t need it?

Worried about the rental sector?

bostonerimus

TBC15 wrote: »

What’s the purpose of the cash cushion if you don’t need it?

Worried about the rental sector?

Cash flow. It's an emergency fund to cover large expenses. eg this summer I had to replace two outside doors and fix some rot around them and that cost $6k......which came out of the cash buffer. I like having cash on hand and I keep most of it in a saving account that is currently returning 2.25%.

atush

vulcanrtb wrote: »

Hi all,
I'm in a DC scheme and I've seen some of the volatility lots of us have experienced in the last few months. Has anyone moved their pots to a less risky option (assuming the pension provider allows it)? I had considered moving it all to cash if possible, yes I know that means negative growth in effect, but I think I prefer that to the possibility of large losses in the current political climate (I'm 24 months away from retirement).

I can provide more detail on how my pot is invested if it helps.
Thanks.

What you are proposing to do is to take a paper loss and make it a real loss.

You cant time the market. So selling after a fall and going to cash means you solidfy your loss and you are out of the market so may miss the upturn.

If you are worried, have you considered instead to make ongoing/future contributions into less volatile investments?

bostonerimus

atush wrote: »

What you are proposing to do is to take a paper loss and make it a real loss.

You cant time the market. So selling after a fall and going to cash means you solidfy your loss and you are out of the market so may miss the upturn.

If you are worried, have you considered instead to make ongoing/future contributions into less volatile investments?

This is a good way to adjust the allocation. The OP needs to find out how they are currently invested and how that fits in with their long term plans rather than focusing on short term paper losses. Many people make the mistake of worrying about tomorrow when they should really be planning for the next decade.

If the OP can give some asset allocation details we'll be able to give some more informed comments.