What did the smart pension money do when values dropped in March/April?

longwalks1

Partly a theoretical question, and also genuinely interested...
When it was a given that markets everywhere were going to plunge due to Covid in March/April of this year, what were people doing with their SIPP's and pension pots?  Allowing them to ride it out, or transfer it somewhere a little 'safer', if there was anywhere?  

NOTE: For those of you who read the rest of my pension posts on here, I am considering a DB transfer out so want to know what options there are regarding safer investment choices if a period of uncertainty if forecast (I'm talking months, not daily fluctuations)

foofi22

How would someone successfully forecast a period of investment "uncertainty"?  The answer is they can't.

I think what you're asking is how to know in advance the markets (or your investments) are going to drop.  The answer is the same as above.

Albermarle

By their nature the majority of the big drops happen quickly and unexpectedly and by the time you can do much about it , it's all over bar the shouting anyway. A much better strategy if you are the type to worry about big drops is to have a defensive portfolio that will  moderate the drop in the markets by being invested more cautiously . The quid pro quo of this is that conservative investments will grow more slowly when markets are on the up .
If you are considering transferring a DB pension to risk based investments , you should get out of your head the notion that you can somehow second guess the markets . Fix an investment strategy and stick to it ( 90% anyway ) 

dunstonh

What did the smart pension money do when values dropped in March/April?

Hopefully nothing.

When it was a given that markets everywhere were going to plunge due to Covid in March/April of this year, what were people doing with their SIPP's and pension pots?

Markets fell between around 24th Feb and 24th March.  April was a recovery period.

Allowing them to ride it out, or transfer it somewhere a little 'safer', if there was anywhere?  

You leave it as it is.  Maybe rebalance it or add to it but certainly not move away from it.    That is the worst thing to do as you crystallise a loss and miss out on the recovery.  Chasing losses is never desirable.   You close your eyes to it and let it play out and come through the other end.  

NOTE: For those of you who read the rest of my pension posts on here, I am considering a DB transfer out so want to know what options there are regarding safer investment choices if a period of uncertainty if forecast (I'm talking months, not daily fluctuations)

How about years of fluctuations on a downward trend?

The CV falls were only the third-largest from peak to trough in the last 20 years.  The credit crunch and dot.com period were larger.  The dot.com crash was played out over years. Not days or months.  Mainly as it was a sequence of events that happened (not all to do with dot.coms but within that period).   

If you cannot handle the negative periods of your portfolio then you are investing above your risk tolerance and should lower your risk.    Ultimately, that may well mean that transferring out of a DB scheme would be unsuitable for you.

TBC15

I immediately and without delay did nothing.

coyrls

britishboy said:

NOTE: For those of you who read the rest of my pension posts on here, I am considering a DB transfer out so want to know what options there are regarding safer investment choices if a period of uncertainty if forecast (I'm talking months, not daily fluctuations)

Please let us know when a period of certainty is forecast, will you?

AlanP_2

coyrls said:

britishboy said:

NOTE: For those of you who read the rest of my pension posts on here, I am considering a DB transfer out so want to know what options there are regarding safer investment choices if a period of uncertainty if forecast (I'm talking months, not daily fluctuations)

Please let us know when a period of certainty is forecast, will you?

I forecast that tomorrow will be a period market uncertainty, as will the next day and the one after that ......... until the end of time.

cloud_dog

I was fortunate, I had cash on the side, so jumped in.  I (we) still have cash on the side and I have sold some of the March invested investments but, that is due to the strategy/timeline (re-balancing back to cash percentage) being applied to this (these specific) pot(s) of investments.

Thrugelmir

News coming out of China in mid February pointed to a difficult period ahead. Given the global dependence on Chinese manufacturing output.  Not sure anyone expected events to unfold as they subsequently did nor the lasting impact.  

By early March I was already 65% cash.  As had liquidated oil and and gas, miners, travel and discretionary spend etc from my portfolio. As prices fell back, started to reinvest back initially into energy and utilities, infrastructure , food and beverage companies, healthcare and other core defensive companies. Subsequently sectors such as as miners, and other individual company shares when prices offered fair value and enticing dividend yields.

Early this month realigned part of my portfolio again. Never seen such volatility in all my years of investing. Can only be down to a new generation of App users playing at being investors while there's a huge amount of cash washing around looking for a return. I'm old school, brought up on company fundamentals.  Means my "tech" exposure is relatively low. However I sleep easy knowing that the core of my portfolio churns out decent reliable returns. Nor am I overpaying for future growth prospects. 

I 'm fortunate to be able to spend a considerable of time to investing now. I've no intention of liquidating my DB pensions either. As this constitutes the fixed interest element of my portfolio.  Not expecting the easy pickings to continue indefinately with my overall portfolio up a sizable % since the 1st January 2020.  When markets return finally to normality will happily return to being primarily passively invested. 

[Deleted User]

Whatever smart person’s investment policy said. Most likely it required rebalancing to move money from fixed income to equities, unless your multiasset fund did that for you. 

In January smart person’s IPS would have called for movement from equities to FI as the equities went up a lot in 2019.  

randompenitent

I don't know about smart money, but for my own pension (and ISAs): nothing, though it was a little tempting to sell everything, buy gold and hide in a shelter somewhere.

I also had some cash sitting on the side and invested that. I'm not clever enough to have bought at the bottom, but I did buy some way below the top and made a little profit.