Recession Looming - so pay off mortgage instead of investing?

DoctorStrange

I've kinda mixed two different ideas on this thread so my apologies to everyone for not being clear enough between my pension savings and my non-pension savings.

To answer some specific points:

If it really is 20% down for the first 7 months of this year

Sorry, it's down 20% over the last 12 months, not YTD. Over the 5 years I've been in it's up only 0.6% or something.

it seems you are bouncing between a high risk loss making fund and low risk mortgage repayment

I was happier to take more risk in my pension as it's a longer term bet, but since moving into freelancing and reconsidering everything I'm less willing to take risks with my non-pension savings.

”That fund is heavily affected by Brexit. Its a high risk fund and one designed to be invested in with only a small percentage of your portfolio (maybe no more than a 5-10%). Not something anyone should be going into with 100%. That would be very bad investing if you did that.

Yeah, at the time I made my decision I was more bullish on the UK but I should have reevaluated more deeply before now. It's currently around 30% of my pension which I know is too much, so I'll need to rebalance shortly. I think we might be able to stop a No-Deal Brexit though and so I'm wondering if I should hold off rebalancing until we know? It seems that No-Deal is already priced in so cutting it now doesn't seem like the best option?

I might come back with a new thread outlining my current position and thought process in more detail, as I appreciate I've really been clear on what my short and long term objectives really are

Thanks everyone

kinger101

DoctorStrange wrote: »

Sorry, it's down 20% over the last 12 months, not YTD. Over the 5 years I've been in it's up only 0.6% or something.

Relative to the market, it's five-yearly performance is probably even worse than it's annual performance.

You need to find another investment(s) ASAP.

DoctorStrange

Yeah it's been an awful choice really. So much for pure active, eh?!

I can't change a 5 year old decision though so I need to focus on what to do now. Would you exit immediately, rather than wait to see if no deal can be averted?

Linton

DoctorStrange wrote: »

Yeah it's been an awful choice really. So much for pure active, eh?!

I can't change a 5 year old decision though so I need to focus on what to do now. Would you exit immediately, rather than wait to see if no deal can be averted?

Pure active requires you to be more careful about what you invest in, not less.


I would exit immediately. It is the wrong fund for a significant part of any portfolio, waiting a few months wont change that. Your portfolio should be broadly invested across the world.



In any case deal or no deal is not a major factor. If its a worse than expected no deal the £ will fall and your large company investments will go up as a short term one-off change. If it is a surprisingly good deal the £ will rise and your large company investments will fall, again as a short term one-off change. However much the same would happen if you were invested globally. For the long term Trunp and China is far more important.

AnotherJoe

DoctorStrange wrote: »

Its the ASI UK Equity Unconstrained Fund, so I knew it was gonna be a volatile ride, but the last 12 months have caused me reconsider my risk appetite

So you've invested 100% in the UK? Why? ............. oh why oh why?
Go global.


EDIT: Just seen your other posts. Sell it at market open Monday.

DoctorStrange

OK and once I've sold out where do I put it?

I've got around £215k in total in the pot so let's imagine I sell everything and start again - what would you guys suggest as a new portfolio?

I'm 40 just now and so can't access it for 18 years: would you folks stick it all in a global equity tracker, or go 70% global equities, 20% EM and 10% bonds or something?

Open to all ideas! (especially any lower risk ones that can easily achieve 4% each year after inflation )

Thanks again - really appreciate folk taking the time out to post here

Inadilemma

This is an interesting thread as I’m in a very similar situation....wrestling between paying off the mortgage (170K) or paying a large chunk off..say 100K and then investing the 70K plus extra somewhere else. Part of me just wants the mortgage done but I know its not maybe the most financially sensible. I also don’t want to pay into pension as I may want to access it earlier than 55.

AnotherJoe

DoctorStrange wrote: »

OK and once I've sold out where do I put it?

I've got around £215k in total in the pot so let's imagine I sell everything and start again - what would you guys suggest as a new portfolio?

I'm 40 just now and so can't access it for 18 years: would you folks stick it all in a global equity tracker, or go 70% global equities, 20% EM and 10% bonds or something?

Open to all ideas! (especially any lower risk ones that can easily achieve 4% each year after inflation )

Thanks again - really appreciate folk taking the time out to post here

I would pick a global tracker 100% equities. Not VLS.

Zero_Sum

AnotherJoe wrote: »

I would pick a global tracker 100% equities. Not VLS.

Why not VLS100? Out of interest

AnotherJoe

Zero_Sum wrote: »

Why not VLS100? Out of interest

Because VLS has a 25% "UK" weighting* which means its heavily bought into the top 20 FTSE companies which is very heavily weighted into oil banks & pharma. Not very diversified.

And I dont think oil companies have a great future either.


* (and the 25% is wholly "artificial, there's no rhyme or reason to it, the fact its such a round number shoudl be a clue to that. The theory is that Uk investors want a UK bias but i reckon first of all we have that anyway due to our jobs pension and house, and secondly its not really UK, these are massive multinationals)