Squeaky bum time!

Thrugelmir

Prism said:

michaels said:

I might need to retire soon. Had I retired a week ago my swr would be 10% higher than it would be today. This is why I remain uncomfortable with the whole swr concept. The same assets that I could have started drawing 30k pa for ever from last week now only support 27k for ever and yet had I started last week and drawn 2.5k already allegedly the 30k would still be safe....

If you had retired a week ago then it would be very unlikely that you would have been invested in stuff that fell 10% this week. VLS60 has fallen about 3.5% this week which is more in line with an early retirement risk level. Also the SWR concept for what its worth assumes that you will reduce your capital over time as you draw down. If you want to preserve it you need to draw even less. 

Bond market has risen. As institutional investors seek the safety of gilts. May improve current market prices. But has no impact on long term returns. Though rebalancing will see bonds sold and investors switched in equities. Not a scenario I'm personally comfortable with. 

bostonerimus

How often have numerous posters said there is bound to be a 10% correction sometime. Well here it is and it won't be the last one either. Your asset allocation must be designed according to your circumstances to weather such down turns. This was to be expected as the market has bee overvalues for a long time and it just too the contravirus to burst the bubble. The only people who should be a little concerned are those who just retired and cashed out a DB pension and bought in at the peak of the market, but they should have planned for a bad sequence of returns and so have enough cash, dividends or fixed income to wait the dip out without having to sell too much at a loss.

bostonerimus

fronty said:

Portfolio has lost nearly all the gains it's made since December, now sitting at just +0.8% which will probably get wiped out at the next valuation point.

But I don't plan to retire for another 10-15 years, so I sense a buying opportunity will soon be presenting itself! :-)

It's not "squeaky bum time", it's just normal variation in the markets. As HHGTTG or LC Jones would say "Don't Panic"

https://www.youtube.com/watch?v=rjxseHuUSYI

https://www.youtube.com/watch?v=M2AkAoussnc

JoeCrystal

Looking at my pension funds and updating my big spreadsheet that tracks my budgets and savings/pensions, I am down by 2.27% since the start of the month, but with three decades left before I may retire, I am not that bothered. I might contribute more into my pension funds if it keeps going south.

Since 2010 when I start adding into my pension funds. I only have seven months which got a result worse than 2.27% although the positive monthly contributions have reduced the negative loss. The worst monthly return is 5.29% loss back over December 2018 with second-worst back in August 2015 at 3.50% loss.

Mick70

JoeCrystal said:

Looking at my pension funds and updating my big spreadsheet that tracks my budgets and savings/pensions, I am down by 2.27% since the start of the month, but with three decades left before I may retire, I am not that bothered. I might contribute more into my pension funds if it keeps going south.

Since 2010 when I start adding into my pension funds. I only have seven months which got a result worse than 2.27% although the positive monthly contributions have reduced the negative loss. The worst monthly return is 5.29% loss back over December 2018 with second-worst back in August 2015 at 3.50% loss.

But if since 2010 your best increases have only been 2.27% your fund is only keeping up with inflation ?  Unless I’m missing something anyway .
mick 

Mick70

Ignore my reply Joe , on train to work and completely misread your post 😀, I thought you meant your increases were only ever 2.27%. 

Apologies ... thick mick 

westv

I know expect the markets to get into -25% territory or lower.

ffacoffipawb

westv said:

I know expect the markets to get into -25% territory or lower.

I am half way there now with -12% this week. If the drop is the same again there is no point doing anything now. Most of the damage has been done. Market value is now less than book value but I still have my reinvested dividends.

Prism

ffacoffipawb said:

westv said:

I know expect the markets to get into -25% territory or lower.

I am half way there now with -12% this week. If the drop is the same again there is no point doing anything now. Most of the damage has been done. Market value is now less than book value but I still have my reinvested dividends.

The problem with dividend investing in the UK (I assume that's roughly where you are at) is that you are typically quite exposed to oil, finance and travel which have all been hit quite badly this last week. 

ratechaser

Thrugelmir said:

Prism said:

michaels said:

I might need to retire soon. Had I retired a week ago my swr would be 10% higher than it would be today. This is why I remain uncomfortable with the whole swr concept. The same assets that I could have started drawing 30k pa for ever from last week now only support 27k for ever and yet had I started last week and drawn 2.5k already allegedly the 30k would still be safe....

If you had retired a week ago then it would be very unlikely that you would have been invested in stuff that fell 10% this week. VLS60 has fallen about 3.5% this week which is more in line with an early retirement risk level. Also the SWR concept for what its worth assumes that you will reduce your capital over time as you draw down. If you want to preserve it you need to draw even less. 

Bond market has risen. As institutional investors seek the safety of gilts. May improve current market prices. But has no impact on long term returns. Though rebalancing will see bonds sold and investors switched in equities. Not a scenario I'm personally comfortable with. 

Although it's a scenario I'm currently facing. I've been largely in gilts for the past few months, which is great for the duration of the current correction, but at some point I'm going to need to rebalance into equities as gilts for the next 10 or so years (and that's just till I can access my pension) isn't a great long term bet.

Crystal ball time. But it won't be today...