Dc pension - risk level advice wanted

deanrussell

Dear Forum
I have a defined contribution pension.
I have 20 years before I retire.
I currently have my pension invested in higher risk funds.
I can choose the amount of risk my pension is invested in.



If I believe there is a likely stock market crash in the near future (70% chance from those talking the market down), what action should I consider taking.


With my limited knowledge, I think these are my options (if there are more, I appreciate them being pointed out):


1. move my pension contributions in to low risk fund(s) before the market falls, then move them back to higher risk funds after a period of time (as it starts to climb).
2. leave the funds as they are. Its a long term investment and in the event of a crash I will still be in investing in those (expected) high yield return funds at a cheaper rate that will almost certainly recover and surpass.



I'm guessing the answer is hedge my bets and find a split that i'm comfortable with, but if there are any angles I should consider, I appreciate the advice.


I'm assuming that any charges my pension levies and their commission fees for moving funds will be significant less than the value wiped out by a stock market crash.

[Deleted User]

You should figure out what poses risk to someone with a 20 year outlook before retirement (50-60 years of investment life). I found this very helpful: https://www.amazon.com/Deep-Risk-History-Portfolio-Investing-ebook/dp/B00EV25GAM

P.S. “Low risk” funds really aren’t. They are “low volatility”. And trying to time the market is very risky.

SonOf

If I believe there is a likely stock market crash in the near future (70% chance from those talking the market down), what action should I consider taking.

None whatsoever.
1 - the is always a stockmarket crash on the way
2 - there are always people talking the market down.
3 - when is the market at its peak - you wont know
4 - when is the market at its lowest - you wont know

You could miss out on 10-15% of growth waiting or that drop of 20% and then go back in too late during the recovery. In the meantime, you have not had the dividends (which can sometimes make up half your return).

For the majority of people, you should take no more risk than you need to and you should just punch through the fall and recovery and come out the other side. Ideally paying more in whilst the decline is taking place.