How much to live on

Albermarle

Organgrinder said:

Update. 

My stocks and shares investments are 5% lower than last year after once being up 9%.

My pension pot has fallen by 7% from it's peak.

The future's not bright. The future's not orange! ;-)

(It's going to be a longer game than I'd hoped!)

It was always predicted that most likely this decade would be a harder slog for investments/pension pots, after a boom 2010's with good returns and low inflation.
Predictions were around that 1o 2 % above inflation might be the best to hope for.
Personally so far this decade I am ahead, but well behind inflation, so a drop in value in real terms, and worse than the predictions. It does depend on what you are invested in though.
The more aggressive investors with 100% equity have done better.

Organgrinder

Albermarle said:

Organgrinder said:

Update. 

My stocks and shares investments are 5% lower than last year after once being up 9%.

My pension pot has fallen by 7% from it's peak.

The future's not bright. The future's not orange! ;-)

(It's going to be a longer game than I'd hoped!)

It was always predicted that most likely this decade would be a harder slog for investments/pension pots, after a boom 2010's with good returns and low inflation.
Predictions were around that 1o 2 % above inflation might be the best to hope for.
Personally so far this decade I am ahead, but well behind inflation, so a drop in value in real terms, and worse than the predictions. It does depend on what you are invested in though.
The more aggressive investors with 100% equity have done better.

The current market conditions are quite extraordinary though - I don't think anyone was expecting what has happened recently.

Roger175

Organgrinder said:

Albermarle said:

Organgrinder said:

Update. 

My stocks and shares investments are 5% lower than last year after once being up 9%.

My pension pot has fallen by 7% from it's peak.

The future's not bright. The future's not orange! ;-)

(It's going to be a longer game than I'd hoped!)

It was always predicted that most likely this decade would be a harder slog for investments/pension pots, after a boom 2010's with good returns and low inflation.
Predictions were around that 1o 2 % above inflation might be the best to hope for.
Personally so far this decade I am ahead, but well behind inflation, so a drop in value in real terms, and worse than the predictions. It does depend on what you are invested in though.
The more aggressive investors with 100% equity have done better.

The current market conditions are quite extraordinary though - I don't think anyone was expecting what has happened recently.

I think a lot of people were expecting a correction, it's what markets do. It was just a question of when and by how much. Having recently retired I didn't want the sequence risk, so sold out a S&P500 fund and about half of my global equity fund at the end of last year. Given the performance of US equities over the last decade it was inevitable there was going to be a correction at some point and Trump was always going to be the catalyst in my view, it's just a shame he's taken the rest of the world down with it.

Bravepants

Roger175 said:

Organgrinder said:

Albermarle said:

Organgrinder said:

Update. 

My stocks and shares investments are 5% lower than last year after once being up 9%.

My pension pot has fallen by 7% from it's peak.

The future's not bright. The future's not orange! ;-)

(It's going to be a longer game than I'd hoped!)

It was always predicted that most likely this decade would be a harder slog for investments/pension pots, after a boom 2010's with good returns and low inflation.
Predictions were around that 1o 2 % above inflation might be the best to hope for.
Personally so far this decade I am ahead, but well behind inflation, so a drop in value in real terms, and worse than the predictions. It does depend on what you are invested in though.
The more aggressive investors with 100% equity have done better.

The current market conditions are quite extraordinary though - I don't think anyone was expecting what has happened recently.

I think a lot of people were expecting a correction, it's what markets do. It was just a question of when and by how much. Having recently retired I didn't want the sequence risk, so sold out a S&P500 fund and about half of my global equity fund at the end of last year. Given the performance of US equities over the last decade it was inevitable there was going to be a correction at some point and Trump was always going to be the catalyst in my view, it's just a shame he's taken the rest of the world down with it.

It's not really a "correction" though. It's a "reaction" to a major power's foreign economic policy. In my view a "correction" is something that happens on a more cyclic nature, say the business cycle; the ebb and flow of the swings in the economy.

Roger175

Bravepants said:

It's not really a "correction" though. It's a "reaction" to a major power's foreign economic policy. In my view a "correction" is something that happens on a more cyclic nature, say the business cycle; the ebb and flow of the swings in the economy.

Call it what you want, but in my view US equities couldn't keep rising for ever. Obviously we don't want to start getting political for fear of the Mods pulling the thread, but I started getting worried once the US election results were known and given my point in my retirement journey, I took measures to reduce some of the risk. This is obviously a very personal thing and I probably wouldn't have done this if I was at a different point on my journey.

Pat38493

Bravepants said:

Roger175 said:

Organgrinder said:

Albermarle said:

Organgrinder said:

Update. 

My stocks and shares investments are 5% lower than last year after once being up 9%.

My pension pot has fallen by 7% from it's peak.

The future's not bright. The future's not orange! ;-)

(It's going to be a longer game than I'd hoped!)

It was always predicted that most likely this decade would be a harder slog for investments/pension pots, after a boom 2010's with good returns and low inflation.
Predictions were around that 1o 2 % above inflation might be the best to hope for.
Personally so far this decade I am ahead, but well behind inflation, so a drop in value in real terms, and worse than the predictions. It does depend on what you are invested in though.
The more aggressive investors with 100% equity have done better.

The current market conditions are quite extraordinary though - I don't think anyone was expecting what has happened recently.

I think a lot of people were expecting a correction, it's what markets do. It was just a question of when and by how much. Having recently retired I didn't want the sequence risk, so sold out a S&P500 fund and about half of my global equity fund at the end of last year. Given the performance of US equities over the last decade it was inevitable there was going to be a correction at some point and Trump was always going to be the catalyst in my view, it's just a shame he's taken the rest of the world down with it.

It's not really a "correction" though. It's a "reaction" to a major power's foreign economic policy. In my view a "correction" is something that happens on a more cyclic nature, say the business cycle; the ebb and flow of the swings in the economy.

There will be different views on this, but Roger has quite a strong case that so far, this is a correction that was overdue anyway, and Trump is just the catalyst for it.  If you look at the S&P500 valuations now, it's around where it should be based on the last decade or two in terms of EPS multiple, whereas it was significantly overvalued before.

Based on that logic, we are just seeing a long overdue correction that was triggered by the recent US Govt action, and partly a correction of a completely irrational increase after last November's US election.

However - this is not good news - this actually means that the most likely scenario will be that the market continues to fall due to the recent actions by the US, as the correction was already overdue even before that.  Many of the organizations in the S&P 500 will suffer real impacts to their profits for quite a few years into the future if the current stated policies continue.  Even if they adjust and things improve again, there is likely to be a period of much lower growth or negative returns.

To put it another way, the true global impact of the tariffs has not been priced in yet, and I don't think the markets even know what that will be, but they know it will be big.  

Unfortunately there's not much I can do that I wasn't doing already as we cannot be sure that the policies won't be reversed or watered down.

Albermarle

Organgrinder said:

Albermarle said:

Organgrinder said:

Update. 

My stocks and shares investments are 5% lower than last year after once being up 9%.

My pension pot has fallen by 7% from it's peak.

The future's not bright. The future's not orange! ;-)

(It's going to be a longer game than I'd hoped!)

It was always predicted that most likely this decade would be a harder slog for investments/pension pots, after a boom 2010's with good returns and low inflation.
Predictions were around that 1o 2 % above inflation might be the best to hope for.
Personally so far this decade I am ahead, but well behind inflation, so a drop in value in real terms, and worse than the predictions. It does depend on what you are invested in though.
The more aggressive investors with 100% equity have done better.

The current market conditions are quite extraordinary though - I don't think anyone was expecting what has happened recently.

Extraordinary market conditions happen at regular intervals.

Most recently Covid.
More dramatic - the GFC of 2008 with the whole financial system possibly collapsing, big banks going bust etc.
A few people predicted this but for the vast majority it came as a surprise.
The Dot.Com crash - A bubble bursting so more predictable, but it was years before the market recovered.

Organgrinder

They do indeed. But I still think the current circumstances are quite extraordinary. The actions of one man bringing turmoil across the world.

I know there are other events that have brought market disruption. However this does seem different.

Bravepants

There's a lot of uncertainty now. Companies are not going to move to the US, which is what Trump wants, if Trump keeps changing his mind about things. I'm just going to keep investing through the volatility, with any luck I've got 20 or 30 years yet.

Organgrinder

Well despite the recent drops I'm feeling positive.

I've rejigged my finances and my forecast looks fine. I've got various topcashback incentives and/or better interest rates through opening/switching ISAs. The additional growth over the next couple of years doesn't quite match my losses but given that I don't need to access my pension pot until 67 (or indeed possibly at all), the long game should see those losses restored.

I've also been pleasantly surprised by the latest clubcard challenges offer and the tie in with easyJet. I will gain at extra £30 of vouchers to take £60 off my holiday balance. I've also booked a break for next Easter (long term planning!) which will net another £100 of vouchers which will take another £200 off the balance. With holiday costs going up considerably this past 2 years this has been very welcome.

Easter hols have started and the weather looks lovely. So the lycra is coming out! Time to get some bike miles in.