Just retired advice

Making_trax

Just retired at 68 and my pension is fine. I have a tracker savings stock ISA at £52,000 that I've been saving since 1999 - it's done well. I don't need it yet as I've a got a decent lump sum in ISA savings and got no debts. But worried the Stock Market might crash soon with Brexit and or a correction is probably overdue. I don't want to lose it.

Should I take it out and put it in the bank/ bonds or take the risk and leave it.

Albermarle

he Stock Market might crash soon with Brexit and or a correction is probably overdue. I don't want to lose it.

Should I take it out and put it in the bank/ bonds or take the risk and leave it

.

Although Brexit is a big issue for UK, and to a lesser extent Europe , it is thought unlikely to seen as a major issue in the global financial markets, or even for the FTSE 100, which is mainly populated by global companies . A general correction though is always possible after a long bull run .
When you say 'Tracker savings stock ISA' I presume you mean it is tracking a stock market index . Is it just for UK or more diversified globally ( this is better) . These types of investments ( if I have understood correctly what it is ) are risky as they are 100% based on equities/shares, so at your age maybe a good idea to dial down the risk level . Trying to time the market by pulling out 100% may mean you lose out on growth . However a more strategic move long term, into less risky investments, with a lower equity % would probably be a good idea . A low cost multi asset fund with a % equity content between 60 and 40% is usually what is recommended.

Making_trax

It's FTSE 100. The market was below 6000 when I started and is now 7300 so not bad. If equity is 50% or so of a low cost multi asset fund, what is the rest?

DrSyn

Unfortunately I cannot see into the future to tell you which would be the best option from those you have given in your post.

However one option not listed, is to tailor your portfolio towards "Capital Protection" in your retirement.

Look at:-

A low cost Global Multi Asset Fund, invest at the risk level or share/bond split you are comfortable with. They have wide diversification while minimising risk, at low cost. You pay them the money & they do the rest.

Two you might consider are:-

https://www.vanguardinvestor.co.uk/investing-explained/what-are-lifestrategy-funds?intcmpgn=lifestrategyfunds_learnmore_link

https://www.hsbc.co.uk/investments/isas/hsbc-global-strategy-portfolios/

My opinion is that at 68 with the aim for capital protect, you should aim at something like Shares 40%/Bonds 60%. I do not think you should go above Share 60%/Bond 40%.


Or you could have a look at an investment trust that aims at capital protection, for example Capital Gearing (CGT).

SonOf

A FTSE100 tracker has been a dire investment option for well over 20 years. Consistently poor. Indeed, single sector investing is bad full stop. Even if you happened to have chosen a better area to invest in.

But worried the Stock Market might crash soon with Brexit and or a correction is probably overdue. I don't want to lose it.

The UK accounts for 4% of global GDP. Under 0.8% is related to transactions involving the single market. If you take a worst case scenario as a drop of 15% on that 0.8% then its 0.12% of global GDP. In other words, peanuts. There are far far bigger issues out there.

A crash is always coming. That is the nature of investing. What did you do in the last crash of 2015/16? or the lesser fall in 2018 (the first negative year for a decade)? What is it that is worrying you now but didnt seem to worry you back then?

You should certainly change it as it's poorly invested. However, you need to be giving greater thought to the reasons and your future objectives.

DrSyn

Making_trax wrote: »

If equity is 50% or so of a low cost multi asset fund, what is the rest?

It all depends on the multi asset fund or IT and when you look at it.
Examples:-

HSBC Global Strategy Balanced Portfolio
31/08/2019

Asset Allocation %
Stocks=64.81
Bonds=28.73
Cash=5.84
Other=0.63


Vanguard LifeStrategy 40% Equity Fund
31/07/2019

Asset Allocation %
Stocks=39.48
Bonds=59.77
Cash=4
Other=0.71

HSBC Global Strategy Cautious Portfolio Income
31/08/2019

Asset Allocation %
Stocks=26.24
Bonds=66.17
Cash=6.94
Other=0.66

Capital Gearing (CGT) (Investment Trust)
30/06/2019

Asset Allocation %
Stock=21.0
Bond =50.9
Other=19.0
Cash=8.4
Preferred=0.7

Making_trax

SonOf wrote: »

A FTSE100 tracker has been a dire investment option for well over 20 years. Consistently poor. Indeed, single sector investing is bad full stop. Even if you happened to have chosen a better area to invest in.



The UK accounts for 4% of global GDP. Under 0.8% is related to transactions involving the single market. If you take a worst case scenario as a drop of 15% on that 0.8% then its 0.12% of global GDP. In other words, peanuts. There are far far bigger issues out there.

A crash is always coming. That is the nature of investing. What did you do in the last crash of 2015/16? or the lesser fall in 2018 (the first negative year for a decade)? What is it that is worrying you now but didnt seem to worry you back then?

You should certainly change it as it's poorly invested. However, you need to be giving greater thought to the reasons and your future objectives.

I know whether a index trackers are better than managed funds is the cause of a fair amount of controversy in the world of investment. But I always thought that the actual evidence was fairly clear cut, showing that index trackers beat the vast majority of managed funds over the long term.

Making_trax

DrSyn wrote: »

It all depends on the multi asset fund or IT and when you look at it.
Examples:-

HSBC Global Strategy Balanced Portfolio
31/08/2019

Asset Allocation %
Stocks=64.81
Bonds=28.73
Cash=5.84
Other=0.63


Vanguard LifeStrategy 40% Equity Fund
31/07/2019

Asset Allocation %
Stocks=39.48
Bonds=59.77
Cash=4
Other=0.71

HSBC Global Strategy Cautious Portfolio Income
31/08/2019

Asset Allocation %
Stocks=26.24
Bonds=66.17
Cash=6.94
Other=0.66

Capital Gearing (CGT) (Investment Trust)
30/06/2019

Asset Allocation %
Stock=21.0
Bond =50.9
Other=19.0
Cash=8.4
Preferred=0.7

Many thanks I'll look into it.

eskbanker

Making_trax wrote: »

SonOf wrote: »

A FTSE100 tracker has been a dire investment option for well over 20 years. Consistently poor. Indeed, single sector investing is bad full stop. Even if you happened to have chosen a better area to invest in.

The UK accounts for 4% of global GDP. Under 0.8% is related to transactions involving the single market. If you take a worst case scenario as a drop of 15% on that 0.8% then its 0.12% of global GDP. In other words, peanuts. There are far far bigger issues out there.

A crash is always coming. That is the nature of investing. What did you do in the last crash of 2015/16? or the lesser fall in 2018 (the first negative year for a decade)? What is it that is worrying you now but didnt seem to worry you back then?

You should certainly change it as it's poorly invested. However, you need to be giving greater thought to the reasons and your future objectives.

I know whether a index trackers are better than managed funds is the cause of a fair amount of controversy in the world of investment. But I always thought that the actual evidence was fairly clear cut, showing that index trackers beat the vast majority of managed funds over the long term.

Perhaps you misunderstood the post you were responding to?

It wasn't about active versus passive so wasn't criticising the fact that you're using a tracker as such, but was highlighting the risk of not diversifying globally across all major markets and sectors, and instead simply tracking one UK index (which is obviously more susceptible to local political/economic factors such as Brexit). There are many passive funds that track global equity indices in one form or another (with or without other asset classes), rather than putting all your eggs into the UK basket....

SonOf

Making_trax wrote: »

I know whether a index trackers are better than managed funds is the cause of a fair amount of controversy in the world of investment. But I always thought that the actual evidence was fairly clear cut, showing that index trackers beat the vast majority of managed funds over the long term.

That is not the issue. Its not managed vs passive.

The issue is that you invested in a single niche sector. That is bad investing. You put your eggs all in one basket. You invested everything in UK large-cap.

Although as it happens, you have likely underperformed most managed funds for that sector. I just put the HSBC FTSE100 tracker into FE starting 1/1/99 and it has returned just 124.09% compared to the sector average of 202.39%.

Single sector investing is bad investing. Picking only a niche within that single sector and only investing in that compounds it.

The UK makes up 4% of global GDP. The FTSE100 is only part of that 4%. It is mainly made up of oil and financials. You restricted yourself to that. Effectively betting that UK large-cap was going to the best every year for 20 years. It was near the bottom most of that period. Where was your US, European, Asia, Japanese, Emerging markets etc?

Albermarle

Depending on the provider of your S&S ISA , there maybe limited choice . Or they will have multi asset funds that are similar to Vanguard or HSBC . e.g Legal and General; Blackrock; Fidelity etc.

If you were interested in Capital Gearing Trust , you need an ISA where you can buy Investment trusts, which are a different type of investment to the multi asset funds.