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

cfw1994

Deleted_User said:

Cus said:

Deleted_User said:

Way to go “us”!  Still, isn’t it remarkable that everyone on this board has nerves of steel and had the foresight to sell before the crash and buy just before the recovery?  I am wowed! And truly humbled. 

Don't think many people said they sold just before, but if you panic sold during the crash then you would likely not be advertising it here..

It does seem many people did nothing, which matches the mantra that investing is long term and not to react.

If you are full DIY then crashes like in march are a real test of discipline I guess, where as some people using an IFA didn't have a choice but to sit and watch.  

There are way too many people in this thread claiming “I happened to be in cash before the crash, then I went 100% equities”.  Or “I SAW it coming, sold at the peak, then bought at the bottom”.  Or “I had lots of cash, so I bought lots of shares in March”. 

I classify such comments as financial !!!!!!. They are downright unhelpful to the OP.  “Sell high, buy low” would be a great idea, but stats show that guessing the timing accurately twice AND consistently is next to impossible. And that people trying to time actually lose money over time.  And those patting themselves on the back for sitting in cash then going 100% equity, if true, lost lots of money.  In 2019 equities returned around 20%, they would have missed all the action then and before.   Look at long term stock market returns over the long term. All the crashes are shown as tiny blips. It’s ALL about time in the market.  

Absolutely this.  

To be fair, quite a few here *have* said they did nothing (as I did, despite my morbid curiosity!).

That said, we did move some of our ISA money from existing funds across to a “recovery” fund in July, adding a few bits since (not just ISA).  The bulk of that is up 30% now, which is, I feel, pretty good.  Hopefully more growth in there - a slightly unique fund, where they cash in the individual stocks when they are happy with the growth....so far only cashed in one, so more potential ahead.

Thrugelmir

Deleted_User said:

Cus said:

Deleted_User said:

Way to go “us”!  Still, isn’t it remarkable that everyone on this board has nerves of steel and had the foresight to sell before the crash and buy just before the recovery?  I am wowed! And truly humbled. 

Don't think many people said they sold just before, but if you panic sold during the crash then you would likely not be advertising it here..

It does seem many people did nothing, which matches the mantra that investing is long term and not to react.

If you are full DIY then crashes like in march are a real test of discipline I guess, where as some people using an IFA didn't have a choice but to sit and watch.  

 Few predicted V shaped recovery following one of the fastest drops in history.  

You do understand the difference between the stock markets and the real economy.  Likewisen not all investors hold trackers. Some of us hold and manage a wide basket of individual shares in addition to broader specific funds. A lot was happening well before the markets fell.  Indices hide the full story. 

Time for reflection is in the future. When the dust has settled. Rather than getting excited over short term performance. 

[Deleted User]

cfw1994 said:

Deleted_User said:

Cus said:

Deleted_User said:

Way to go “us”!  Still, isn’t it remarkable that everyone on this board has nerves of steel and had the foresight to sell before the crash and buy just before the recovery?  I am wowed! And truly humbled. 

Don't think many people said they sold just before, but if you panic sold during the crash then you would likely not be advertising it here..

It does seem many people did nothing, which matches the mantra that investing is long term and not to react.

If you are full DIY then crashes like in march are a real test of discipline I guess, where as some people using an IFA didn't have a choice but to sit and watch.  

There are way too many people in this thread claiming “I happened to be in cash before the crash, then I went 100% equities”.  Or “I SAW it coming, sold at the peak, then bought at the bottom”.  Or “I had lots of cash, so I bought lots of shares in March”. 

I classify such comments as financial !!!!!!. They are downright unhelpful to the OP.  “Sell high, buy low” would be a great idea, but stats show that guessing the timing accurately twice AND consistently is next to impossible. And that people trying to time actually lose money over time.  And those patting themselves on the back for sitting in cash then going 100% equity, if true, lost lots of money.  In 2019 equities returned around 20%, they would have missed all the action then and before.   Look at long term stock market returns over the long term. All the crashes are shown as tiny blips. It’s ALL about time in the market.  

Absolutely this.  

To be fair, quite a few here *have* said they did nothing (as I did, despite my morbid curiosity!).

That said, we did move some of our ISA money from existing funds across to a “recovery” fund in July, adding a few bits since (not just ISA).  The bulk of that is up 30% now, which is, I feel, pretty good.  Hopefully more growth in there - a slightly unique fund, where they cash in the individual stocks when they are happy with the growth....so far only cashed in one, so more potential ahead.

Yes, I played a little bit too, in mid March. My hand was kinda forced because my policy calls for rebalancing after major moves according to certain rules. But I introduced human decision making and purchased a particular instrument which seemed both safer and particularly  underpriced  under most scenarios except an armageddon whereas banks and insurance companies start going belly up.   I bought over 100k of Preferred shares and treated them as 50% fixed income and 50% equity in the portfolio. They did recover quite well.    They also give me tax advantages vs bonds.  However, by the time I will be calculating money weighted returns, this action will likely show as meaningless, certainly over the long term.  Time in the market is one factor which dominates returns over the years; the rest is either noise or self harm. I am now stuck with these prefs because they carry significant capital gains in a taxable account.  I probably shouldn’t have bothered introducing the extra complication.  Usually I don’t mess with the equity portion and just stick to the 4 plain vanilla ETFs, but I do apply human decision making to fixed income. This was borderline. 

Best systems are on autopilot and involve zero human input. 

Prism

Deleted_User said:

Also, anyone who is human, invested and watched the stock market would have been worried in March.  Few predicted V shaped recovery following one of the fastest drops in history.  I was certainly worried.  That does not mean “you don’t have the risk tolerance for your allocation”.  That just means humans have normal human emotions.

UK investors were protected to some extent by a sharp drop in the pound. It was close to a 13% drop between the 9th and 19th March which softened the blow for international stocks. Those with a higher UK allocation felt it much more. I only saw a 20% drop for a few days. I was more worried at the end of 2018 when there were two sharp drops with the pound flat.

cloud_dog

Deleted_User said:

There are way too many people in this thread claiming “I happened to be in cash before the crash, then I went 100% equities”.  Or “I SAW it coming, sold at the peak, then bought at the bottom”.  Or “I had lots of cash, so I bought lots of shares in March”. 

I classify such comments as financial !!!!!!. 

And I classify your assessment as Trumpian in nature, spending little effort to post anything relating to the comments posted.  Please reference any poster who has said anything like your Trumpian response?

With regard to my situation, the pot(s) I refer to relate to our early retirement pot(s).  As these are likely to be required within a 5 year timescale (hopefully) I have decided that approximately 75% of the pot(s) will remain as cash and I will manage/invest around 25% so as to retain a degree of downside control or limit.  As I am a HRT payer who benefits from SS I am comfortable in keeping a large proportion as cash and being slightly eroded by inflation as I will have gained significantly from the tax and NI savings already.

I posted for the OPs benefit to show them not to fear such events but to see them as opportunities.  The correction, in my opinion  simply based on investing through a number of these was that it was an opportunity to take advantage of.  I did not buy at the bottom and did not sell at the top.  I have subsequently sold most of the investments made at that time as I made a significant profit and I wanted to stick to my overall strategy, which is to ensure a growth matching my timeline for 5 years hense.  Had these investments been for our entire retirement I would not have sold and gone back to cash, I would have simply retained the investments.

It is somewhat sad that you feel the need to grandise these posts to be hyperbole.  Not one of these posts has claimed to time or second guess the markets.  Perhaps you could spend some effort and re-read them rather than seeing what you want to see in the posts.

dunstonh

Deleted_User said:

fred246 said:

IFAs are supposed to phone you immediately with advice. That's what you pay them ongoing fees for.

I was actually in an interview with an IFA (FOR A DB transfer) when the market fell by an enormous amount in one day
I mentioned the market fall to him, he then said because of the % drop he was obliged to send out urgent emails to the rest of his clients

Under MIFIDII, portfolios run on a discretionary basis (either in-house or with a DFM) are required to notify if there has been a drop of 10%.   This need was suspended this year after the first notification over fears it would create more damage than good.
Portfolios run on an advisory basis are not required to make any notification.  Nor are transactional or non-advised portfolios.

Blackbeard_of_Perranporth

 My SIPP and ISA funds dropped around 30% at worse in March, but the portfolio in the SIPP was around 10% across all funds and the ISA around 8%. Recovery on the SIPP was achieved in September and now is back on a average of 7% growth over the last 5 years, this year being only 2%. The ISA funds all recovered by November, with only one laggard that took until last week to gain any growth this year.

All our investments have grown this year, from one fund at 44% and the laggard now at 1%. I find a balanced spread works well, and I don’t need a financial advisor to tell me to Balance, or equalise!

atush

britishboy said:

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)

I held, and bought more of favorites at lower prices

shinytop

atush said:

britishboy said:

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)

I held, and bought more of favorites at lower prices

I held but was too scared to buy in case the markets fell further.  Just being honest and I'm sure a lot of others were the same.  

[Deleted User]

I switched from risk 6 to 7 after a review in March, not saying I am some sort of expert, just followed a review with the IFA and wasn't opposed to it. Pension is doing fine now, probably better than if it had remained in 6