Best allocation across Cash, Bonds & Equities?

Prism

Deleted_User said:

Which gilt fund lost 8% over the last 2 months? I have not followed gilts but treasures did not do anything like this. 

That aside, bonds typically have higher risk than shares for someone with a long time horizon.  For retirees they are important though. I prefer short term government bonds bought directly rather than via a fund. We only really need bonds to be liquid at the time of a major crisis and thats the exact time when funds might experience problems.

Over the last two months I can't see any reason why a gilt fund would have dropped. For the first two months of this year ilts dropped 8% and long gilts 12% but in the last two months they have risen.

Albermarle

Deleted_User said:

By the way, when the posters here are saying “cash”, do you mean the actual cash sitting within a tax free pension wrapper and earning no interest? 

It can mean that , or it can mean cash outside a wrapper, sitting in a normal saving account(s) earning 1% maybe .
It varies depending on the poster.

[Deleted User]

dunstonh said:

Which gilt fund lost 8% over the last 2 months? I have not followed gilts but treasures did not do anything like this.

A number of them are running in that ballpark.  Vanguard UK Govt bond is 7% down over 12 months.  Although a gilts crash did occur in that period.

Some global govt bond funds and long dated gilts have just crept into double digit losses.

However, it is worth noting that 2020 saw significant gains way above the typical norm and 2021 saw some of that unwind to bring it back in line with the long term average.

The claim was “2 months”.  I’ve seen a rise. Thats quite different from 12 months. 

[Deleted User]

Albermarle said:

Deleted_User said:

By the way, when the posters here are saying “cash”, do you mean the actual cash sitting within a tax free pension wrapper and earning no interest? 

It can mean that , or it can mean cash outside a wrapper, sitting in a normal saving account(s) earning 1% maybe .
It varies depending on the poster.

Cash in a savings account earning interest which you can access in an instant? Absolutely. Cash in a SIPP losing value and subsidizing the brokerage? Why would one ever do that? 

sheslookinhot

Deleted_User said:

Albermarle said:

Deleted_User said:

By the way, when the posters here are saying “cash”, do you mean the actual cash sitting within a tax free pension wrapper and earning no interest? 

It can mean that , or it can mean cash outside a wrapper, sitting in a normal saving account(s) earning 1% maybe .
It varies depending on the poster.

Cash in a savings account earning interest which you can access in an instant? Absolutely. Cash in a SIPP losing value and subsidizing the brokerage? Why would one ever do that? 

Does cash in a SIPP receive  the 25% contribution from HMRC ?

Thrugelmir

sheslookinhot said:

Deleted_User said:

Albermarle said:

Deleted_User said:

By the way, when the posters here are saying “cash”, do you mean the actual cash sitting within a tax free pension wrapper and earning no interest? 

It can mean that , or it can mean cash outside a wrapper, sitting in a normal saving account(s) earning 1% maybe .
It varies depending on the poster.

Cash in a savings account earning interest which you can access in an instant? Absolutely. Cash in a SIPP losing value and subsidizing the brokerage? Why would one ever do that? 

Does cash in a SIPP receive  the 25% contribution from HMRC ?

The contributions receive the tax relief. The deployment of the cash into an investment has no bearing. 

Linton

Deleted_User said:

Albermarle said:

Deleted_User said:

By the way, when the posters here are saying “cash”, do you mean the actual cash sitting within a tax free pension wrapper and earning no interest? 

It can mean that , or it can mean cash outside a wrapper, sitting in a normal saving account(s) earning 1% maybe .
It varies depending on the poster.

Cash in a savings account earning interest which you can access in an instant? Absolutely. Cash in a SIPP losing value and subsidizing the brokerage? Why would one ever do that? 

How does cash  sitting in a SIPP subsidise the brokerage?

Thrugelmir

Linton said:

Deleted_User said:

Albermarle said:

Deleted_User said:

By the way, when the posters here are saying “cash”, do you mean the actual cash sitting within a tax free pension wrapper and earning no interest? 

It can mean that , or it can mean cash outside a wrapper, sitting in a normal saving account(s) earning 1% maybe .
It varies depending on the poster.

Cash in a savings account earning interest which you can access in an instant? Absolutely. Cash in a SIPP losing value and subsidizing the brokerage? Why would one ever do that? 

How does cash  sitting in a SIPP subsidise the brokerage?

Platforms place client funds on overnight deposit and receive the benefit. HL / AJ Bell didn't get rich from fees alone. 

fineclaret

Deleted_User said:

By the way, when the posters here are saying “cash”, do you mean the actual cash sitting within a tax free pension wrapper and earning no interest? 

Speaking for myself, most of my 'cash' is in cash ISAs and other fixed term investments, plus (effectively) a 1-day-notice account paying 0.5%. Not a huge amount, but equates to 6+ months' income. I keep a couple of months' drawdown payments in SIPP cash, if I remember, just so I can choose what gets liquidised without being hostage to the daily vagaries of the market on payment day. It's not earning interest, but is 'earning' a notional 0.35% in saved charges (I think).

fineclaret

Deleted_User said:

dunstonh said:

Which gilt fund lost 8% over the last 2 months? I have not followed gilts but treasures did not do anything like this.

A number of them are running in that ballpark.  Vanguard UK Govt bond is 7% down over 12 months.  Although a gilts crash did occur in that period.

Some global govt bond funds and long dated gilts have just crept into double digit losses.

However, it is worth noting that 2020 saw significant gains way above the typical norm and 2021 saw some of that unwind to bring it back in line with the long term average.

The claim was “2 months”.  I’ve seen a rise. Thats quite different from 12 months. 

Sorry, I misspoke. 12 months it is!