Value of pension is freaking me out

BritishInvestor

GSP said:

BritishInvestor said:

GSP said:

Interesting reading comments on how investments have dropped over the past month or so.
Ballpark but wondered how much roughly what % people think the low, medium and high risk have fallen, just to see how each is out on their own.

Under 2%

Of course, there are some that juggle chainsaws for breakfast and are down more, but if you look at the falls that even a 60/40 portfolio has historically suffered, you have to wonder if they fully appreciate the risks.

Thanks BI. I was thinking something like:
Overall Total - ?%.
Of which:
Low Risk - ?%.
Medium Risk - ?%.
High Risk - ?%.

As eskbanker points out, bonds and equities (big generalisation) have fallen broadly in line so not huge differences between various equity % portfolio levels. 

BritishInvestor

DoublePolaroid said:

I guess that depends on how you quantify risk. My 100% equity portfolio, which could reasonably be considered "high risk" is down 2.6% YTD. All 100% equity portfolios are not equal though and mine isn't over-weighted with unprofitable tech companies.

Good video, at least for noobs like me, here...

The Great Stock Rotation - YouTube

Yep, worth watching

BritishInvestor

daveharruk said:

BritishInvestor said:

daveharruk said:

BritishInvestor said:

daveharruk said:

If you're invested in good quality, profitable, ideally growing companies that are not in a bubble, then you have nothing to worry about. 

Do you have any examples, as most of the "quality" shares tend to be on lumpy valuations at present?

Right now, I think Facebook is relatively cheap; Microsoft and Apple don't appear to be in a bubble.

What PE ratios are you seeing for them?

This is a good article on Facebook:
https://seekingalpha.com/article/4478693-meta-platforms-fb-undervalued-multiple-growth-drivers-buy-now
Both Microsoft and Apple have solid future earnings growth which justifies their current PE ratios of around 30-35 (so not in a bubble).

Some would consider 30-35 to be pretty punchy, 20 year average PE is 18.5 for large-cap growth (according to the the JPM guide)

I'm not sure how anyone can be certain what future earnings growth might be....

dunstonh

Cus said:

dunstonh said:

Cus said:

GSP said:

OldMusicGuy said:

My SIPP portfolio (which is designed to be low volatility) was down 1.6% from its peak in late December. So doing as it should. It also grew more than I had planned for in 2021.

The PensionCraft video mentioned above is a really helpful watch.

Thanks OMG.
So say a rounded 2% for low risk. Need to find how the medium risk and high risk gave done over the last month or so.

My aggressive portfolio is down 3.2% this year.

Aggressive is in the eyes of the beholder.  One persons aggressive is another persons medium risk     

Aggressive portfolios generically would be 100% equities with a high ratio of emerging markets, smaller companies, maybe some niche areas etc.   And those are seeing 10% drop levels from peak to trough (which doesn't tie in by calendar month or YTD). 

So, maybe yours is not as aggressive as you think. Or you have done very well with your selection for this short term period.  

I meant aggressive as in AFI aggressive, 80/20 split with growth assets a big part.

A good example where a word can mean something different amongst people.  80/20 would not generally be considered aggressive (assuming the 80 is not niche/heavy in EM or small cap).

DoublePolaroid

GSP said:

DoublePolaroid said:

I guess that depends on how you quantify risk. My 100% equity portfolio, which could reasonably be considered "high risk" is down 2.6% YTD. All 100% equity portfolios are not equal though and mine isn't over-weighted with unprofitable tech companies.

Good video, at least for noobs like me, here...

The Great Stock Rotation - YouTube

Thanks DP.
How has it done over the past month?

FWIW -1.1% since 17/12/21, with circa 70% in a global tracker and the rest split 50/50 between the UK and global small cap.

OldMusicGuy

Mine's not low risk, it's low volatility. It's designed reduce the impact of falls at the cost of growth in upturns. I would say it's medium to low risk (it's about 50/50 equities and bonds) but I also hold more cash in my SIPP than many would to mitigate sequence of returns risk (as I am newly retired). 

daveharruk

BritishInvestor said:

daveharruk said:

BritishInvestor said:

daveharruk said:

BritishInvestor said:

daveharruk said:

If you're invested in good quality, profitable, ideally growing companies that are not in a bubble, then you have nothing to worry about. 

Do you have any examples, as most of the "quality" shares tend to be on lumpy valuations at present?

Right now, I think Facebook is relatively cheap; Microsoft and Apple don't appear to be in a bubble.

What PE ratios are you seeing for them?

This is a good article on Facebook:
https://seekingalpha.com/article/4478693-meta-platforms-fb-undervalued-multiple-growth-drivers-buy-now
Both Microsoft and Apple have solid future earnings growth which justifies their current PE ratios of around 30-35 (so not in a bubble).

Some would consider 30-35 to be pretty punchy, 20 year average PE is 18.5 for large-cap growth (according to the the JPM guide)

I'm not sure how anyone can be certain what future earnings growth might be....

OK, however if you only bought Microsoft when its PE was less than 20 (which was nearly 5 years ago) then you would have missed out on a 5x increase in share price during that time. FB's PE ratio is about 20% less than its 5 year average, yet in the last 5 years its gone up 2x. If you don't buy because the PE is "historically high", you would have missed out on some great trades - so ignoring high growth companies based just on PE doesn't seem to be a winning strategy.

redpete

Sunnylifeover50plan said:

...but then LS funds (LS40 & LS60) I have aren't really weighted to UK 

That depends on what you are comparing them with.  Obviously they are less UK weighted than a fund of UK equities, but they are over-weighted compared with a straightforward global tracker that matches the relative weights of different markets.

BritishInvestor

daveharruk said:

BritishInvestor said:

daveharruk said:

BritishInvestor said:

daveharruk said:

BritishInvestor said:

daveharruk said:

If you're invested in good quality, profitable, ideally growing companies that are not in a bubble, then you have nothing to worry about. 

Do you have any examples, as most of the "quality" shares tend to be on lumpy valuations at present?

Right now, I think Facebook is relatively cheap; Microsoft and Apple don't appear to be in a bubble.

What PE ratios are you seeing for them?

This is a good article on Facebook:
https://seekingalpha.com/article/4478693-meta-platforms-fb-undervalued-multiple-growth-drivers-buy-now
Both Microsoft and Apple have solid future earnings growth which justifies their current PE ratios of around 30-35 (so not in a bubble).

Some would consider 30-35 to be pretty punchy, 20 year average PE is 18.5 for large-cap growth (according to the the JPM guide)

I'm not sure how anyone can be certain what future earnings growth might be....

OK, however if you only bought Microsoft when its PE was less than 20 (which was nearly 5 years ago) then you would have missed out on a 5x increase in share price during that time. FB's PE ratio is about 20% less than its 5 year average, yet in the last 5 years its gone up 2x. If you don't buy because the PE is "historically high", you would have missed out on some great trades - so ignoring high growth companies based just on PE doesn't seem to be a winning strategy.

If you are not bound by accepted market challenges that make consistently picking winners near impossible, it's definitely a valid option.

However, for mere mortals, buying lower PE stocks has historically tended to work out more favourably

https://en.wikipedia.org/wiki/Value_investing

MarkCarnage

 so ignoring high growth companies based just on PE doesn't seem to be a winning strategy.

Agreed...with the very significant caveat that it's their future E that matters not the historic one. If the valuation of a company on 35x is based on consensus earnings growth of 20% compound, then you will get very different share price outcomes if the actual is either 30% or 10%........