Could my pension be working harder?

SpeedSouth

Most of those replies highlight my lack of understanding.

I picked VLS 100 simply as that is pretty much as far as my knowledge goes.  When I plumped for ISA a few years ago, most folk seem to suggest VLS were fire and forget.  At the time it wasnt huge amounts, still isn't.   The pension has taken priority so has climbed in value a lot over the last 3-4 years which had made me think, I should look to be making the amount work harder.

The Pens Portfolio One doesn't seem a great fund either based on historical data ( I realise that's not going to repeat).  I'm unsure what funds I can move to and whether the 0.75% charge remains/increases/decreases.

If I go with an IFA, then I imagine I'll get at best a 0.5% management charge, so already pretty close to the 0.75% I pay without fund charges.

Linton

Deleted_User said:

OldMusicGuy said:

GSP said:

Reading some of the posts, how’s a newbie going to have any confidence when you boys are arguing over sectors, funds etc. Not quite backing the horses, but can someone end up with a bloody nose here if they have little knowledge in what they are doing?

Here you go - FOBP. Fear of a better portfolio. A newbie can easily end up with a perfectly adequate, low cost portfolio. But newbies get obsessed with the idea that there is always a "better" fund and the so called "experts" must know what the "best" funds are. So newbies get paralysed because they feel they are somehow missing out. They tend to chop and change funds chasing returns when the best strategy is to make choices based on your objectives and risk profile and then leave well alone.

It's a hard lesson to learn. It took me a few years to learn it. You can spend too much time reading these threads which will just add to your confusion. You need to decide what you want to do:

1 Decide it's all too complicated and stick with an IFA.
2 Decide you want to go for a simple, low cost approach a la Edwards and Kroijer. Make some simple choices and stick with them.
3 Build up your knowledge of different funds, sectors and companies. Get very focused on the composition and performance of funds/investment vehicles and build a more complex portfolio. Post a lot on MSE to say how well your portfolio is performing 

No right or wrong approach. Just what suits you and how much time you are prepared to invest in learning (or how much money you are prepared to invest with an IFA if you don't want to learn).

Right. Which is why the simple answer to OP’s question is that VLS100 is a good solution. 

Yes it is a reasonable solution if they investor is happy with the100% equity level of risk.  The discussion arises with any implication that it is the only solution or the best solution.  But for most people who just want to get on with their lives confident that they have not doing something stupid and are not chasing the maximum possible return, it is fine,  As are many other similar funds.

SpeedSouth

OldMusicGuy said:

GSP said:

Reading some of the posts, how’s a newbie going to have any confidence when you boys are arguing over sectors, funds etc. Not quite backing the horses, but can someone end up with a bloody nose here if they have little knowledge in what they are doing?

Here you go - FOBP. Fear of a better portfolio. A newbie can easily end up with a perfectly adequate, low cost portfolio. But newbies get obsessed with the idea that there is always a "better" fund and the so called "experts" must know what the "best" funds are. So newbies get paralysed because they feel they are somehow missing out. They tend to chop and change funds chasing returns when the best strategy is to make choices based on your objectives and risk profile and then leave well alone.

It's a hard lesson to learn. It took me a few years to learn it. You can spend too much time reading these threads which will just add to your confusion. You need to decide what you want to do:

1 Decide it's all too complicated and stick with an IFA.
2 Decide you want to go for a simple, low cost approach a la Edwards and Kroijer. Make some simple choices and stick with them.
3 Build up your knowledge of different funds, sectors and companies. Get very focused on the composition and performance of funds/investment vehicles and build a more complex portfolio. Post a lot on MSE to say how well your portfolio is performing 

No right or wrong approach. Just what suits you and how much time you are prepared to invest in learning (or how much money you are prepared to invest with an IFA if you don't want to learn).

Thanks.. probably my situation in a nutshell!

Thrugelmir

GSP said:

Reading some of the posts, how’s a newbie going to have any confidence when you boys are arguing over sectors, funds etc. Not quite backing the horses, but can someone end up with a bloody nose here if they have little knowledge in what they are doing?

No one is arguing it's a grown up discussion. We all start somewhere and never stop learning.  Markets are ultimately driven by opinion. The Financial Services industry is more than happy to pick peoples pockets through ill informed and uneducated investing. As being human self interest comes first. 

Rich1976

adam81 said:

OldMusicGuy said:

GSP said:

Reading some of the posts, how’s a newbie going to have any confidence when you boys are arguing over sectors, funds etc. Not quite backing the horses, but can someone end up with a bloody nose here if they have little knowledge in what they are doing?

Here you go - FOBP. Fear of a better portfolio. A newbie can easily end up with a perfectly adequate, low cost portfolio. But newbies get obsessed with the idea that there is always a "better" fund and the so called "experts" must know what the "best" funds are. So newbies get paralysed because they feel they are somehow missing out. They tend to chop and change funds chasing returns when the best strategy is to make choices based on your objectives and risk profile and then leave well alone.

It's a hard lesson to learn. It took me a few years to learn it. You can spend too much time reading these threads which will just add to your confusion. You need to decide what you want to do:

1 Decide it's all too complicated and stick with an IFA.
2 Decide you want to go for a simple, low cost approach a la Edwards and Kroijer. Make some simple choices and stick with them.
3 Build up your knowledge of different funds, sectors and companies. Get very focused on the composition and performance of funds/investment vehicles and build a more complex portfolio. Post a lot on MSE to say how well your portfolio is performing 

No right or wrong approach. Just what suits you and how much time you are prepared to invest in learning (or how much money you are prepared to invest with an IFA if you don't want to learn).

Thanks.. probably my situation in a nutshell!

You're not alone. There is far too much information, too many funds which adds to the confusion and everyone has a different opinion. This is why people give up or dont even bother starting and who can blame them.
For most people a portfolio of tracker funds investing in different regions of the world or one global tracker and maybe one or two other funds in say emerging markets, smaller companies etc will be good enough.
Apart from its high UK bias which may or may not be a bad thing depending on your opinion there is nothing wrong with the LS100 fund.

dunstonh

Apart from its high UK bias which may or may not be a bad thing depending on your opinion there is nothing wrong with the LS100 fund.

Except a global tracker fund may be available cheaper and without the home bias.

Thrugelmir

Rich1976 said:

adam81 said:

OldMusicGuy said:

GSP said:

Reading some of the posts, how’s a newbie going to have any confidence when you boys are arguing over sectors, funds etc. Not quite backing the horses, but can someone end up with a bloody nose here if they have little knowledge in what they are doing?

Here you go - FOBP. Fear of a better portfolio. A newbie can easily end up with a perfectly adequate, low cost portfolio. But newbies get obsessed with the idea that there is always a "better" fund and the so called "experts" must know what the "best" funds are. So newbies get paralysed because they feel they are somehow missing out. They tend to chop and change funds chasing returns when the best strategy is to make choices based on your objectives and risk profile and then leave well alone.

It's a hard lesson to learn. It took me a few years to learn it. You can spend too much time reading these threads which will just add to your confusion. You need to decide what you want to do:

1 Decide it's all too complicated and stick with an IFA.
2 Decide you want to go for a simple, low cost approach a la Edwards and Kroijer. Make some simple choices and stick with them.
3 Build up your knowledge of different funds, sectors and companies. Get very focused on the composition and performance of funds/investment vehicles and build a more complex portfolio. Post a lot on MSE to say how well your portfolio is performing 

No right or wrong approach. Just what suits you and how much time you are prepared to invest in learning (or how much money you are prepared to invest with an IFA if you don't want to learn).

Thanks.. probably my situation in a nutshell!

You're not alone. There is far too much information, too many funds which adds to the confusion and everyone has a different opinion. This is why people give up or dont even bother starting and who can blame them.
For most people a portfolio of tracker funds investing in different regions of the world or one global tracker and maybe one or two other funds in say emerging markets, smaller companies etc will be good enough.
Apart from its high UK bias which may or may not be a bad thing depending on your opinion there is nothing wrong with the LS100 fund.

As long as you appreciate that the VLS range is an actively managed passive fund, not a pure tracker in the sense envisaged by John Bogle. . 

GSP

AlanP_2 said:

GSP said:

Reading some of the posts, how’s a newbie going to have any confidence when you boys are arguing over sectors, funds etc. Not quite backing the horses, but can someone end up with a bloody nose here if they have little knowledge in what they are doing?

If I recall correctly (apologies if I'm wrong) you transferred out from a defined benefit scheme and now you seem very worried about where you have ended up.

In hindsight would sticking with the DB scheme have been a better option for you?

In answer to your point, most comments on this thread are about tinkering at the margins. A sensible asset allocation, a sensible withdrawal rate and regular (1 - 2 - 4 times a year) to make sure things are broadly on track with your plan and that's it. Whether you go all passive via a multi-asset fund, all active via single sector managed funds or a hybrid will, in hindsight, make a bit of difference to your returns. But, if your chosen options allow you to live the life you want who cares?

Yes your memory is good. I did transfer out from a db pension which would have paid £15k p.a. but chose the CETV of £800k, and definitely don’t regret that.  I am not worried at all in fact my fund is almost back to where it started despite withdrawing £170k in three years.
My concern was not really knowing about investing and effectively giving all the money to an IFA to trust. Without any knowledge of other IFA’s, I have been posing certain questions and the answers have been very interesting to say the least, from both ends of the spectrum. I am still digesting everything and its very interesting, so please all carry on. Thanks

GSP

OldMusicGuy said:

GSP said:

Reading some of the posts, how’s a newbie going to have any confidence when you boys are arguing over sectors, funds etc. Not quite backing the horses, but can someone end up with a bloody nose here if they have little knowledge in what they are doing?

Here you go - FOBP. Fear of a better portfolio. A newbie can easily end up with a perfectly adequate, low cost portfolio. But newbies get obsessed with the idea that there is always a "better" fund and the so called "experts" must know what the "best" funds are. So newbies get paralysed because they feel they are somehow missing out. They tend to chop and change funds chasing returns when the best strategy is to make choices based on your objectives and risk profile and then leave well alone.

It's a hard lesson to learn. It took me a few years to learn it. You can spend too much time reading these threads which will just add to your confusion. You need to decide what you want to do:

1 Decide it's all too complicated and stick with an IFA.
2 Decide you want to go for a simple, low cost approach a la Edwards and Kroijer. Make some simple choices and stick with them.
3 Build up your knowledge of different funds, sectors and companies. Get very focused on the composition and performance of funds/investment vehicles and build a more complex portfolio. Post a lot on MSE to say how well your portfolio is performing 

No right or wrong approach. Just what suits you and how much time you are prepared to invest in learning (or how much money you are prepared to invest with an IFA if you don't want to learn).

Still reading through and learning thanks OMG. Very interesting and please all carry on.

Prism

GSP said:

AlanP_2 said:

GSP said:

Reading some of the posts, how’s a newbie going to have any confidence when you boys are arguing over sectors, funds etc. Not quite backing the horses, but can someone end up with a bloody nose here if they have little knowledge in what they are doing?

If I recall correctly (apologies if I'm wrong) you transferred out from a defined benefit scheme and now you seem very worried about where you have ended up.

In hindsight would sticking with the DB scheme have been a better option for you?

In answer to your point, most comments on this thread are about tinkering at the margins. A sensible asset allocation, a sensible withdrawal rate and regular (1 - 2 - 4 times a year) to make sure things are broadly on track with your plan and that's it. Whether you go all passive via a multi-asset fund, all active via single sector managed funds or a hybrid will, in hindsight, make a bit of difference to your returns. But, if your chosen options allow you to live the life you want who cares?

Yes your memory is good. I did transfer out from a db pension which would have paid £15k p.a. but chose the CETV of £800k, and definitely don’t regret that.  I am not worried at all in fact my fund is almost back to where it started despite withdrawing £170k in three years.
My concern was not really knowing about investing and effectively giving all the money to an IFA to trust. Without any knowledge of other IFA’s, I have been posing certain questions and the answers have been very interesting to say the least, from both ends of the spectrum. I am still digesting everything and its very interesting, so please all carry on. Thanks

That seems like quite a high withdrawal rate. Are you thinking of continuing at that rate of income or cutting back a bit? Usually you want to use the early years to increase the pot if the markets allow before a downturn hits.