What is your trigger point to start spending from cash buffer?? + QE, Does it change the game?

Notepad_Phil

Sea_Shell said:

Notepad_Phil said:

Sea_Shell said:

...
However, with the rises in interest rates of late, do we put this is a 1 year fixed to guarantee ~2.5%, or put in our ISA in a fund with a similar risk profile from whence it came and hope it makes at least that back over the same period.
...

Well personally I'm moving any cash that comes in during a month into funds as I've got more than enough cash for the next umpteen years, which I think you may have too, so that would be my personal opinion on what's best to do - though if there was a specific need for the cash in a year's time then that might persuade me otherwise.

Is that "new" cash?  Wages?   Or drawdown?

Our "new" cash is literally a few £s of interest here and there.

It predominantly comes from a couple of small DB pensions and the drawdown of the natural yield from my DC pensions, so we're talking about a four figure sum a bit bigger than your's. Personally I'm putting them into VLS60 and HSBC Global Strategy Balanced as I consider them my lower risk cash alternative to the other 100% equity funds that I hold.

Sea_Shell

Notepad_Phil said:

Sea_Shell said:

Notepad_Phil said:

Sea_Shell said:

...
However, with the rises in interest rates of late, do we put this is a 1 year fixed to guarantee ~2.5%, or put in our ISA in a fund with a similar risk profile from whence it came and hope it makes at least that back over the same period.
...

Well personally I'm moving any cash that comes in during a month into funds as I've got more than enough cash for the next umpteen years, which I think you may have too, so that would be my personal opinion on what's best to do - though if there was a specific need for the cash in a year's time then that might persuade me otherwise.

Is that "new" cash?  Wages?   Or drawdown?

Our "new" cash is literally a few £s of interest here and there.

It predominantly comes from a couple of small DB pensions and the drawdown of the natural yield from my DC pensions, so we're talking about a four figure sum a bit bigger than your's. Personally I'm putting them into VLS60 and HSBC Global Strategy Balanced as I consider them my low risk cash alternative to the other 100% equity funds that I hold.

That HSBC fund looks similar to our 7IM AAP balanced C, with slightly better performance, which would probably be the fund we'd add to.

It would be brave (or stupid?) to put more in our Rathbones Global Opp fund!! 😉.   But then it could be the shrewdest move ever!!! 

Notepad_Phil

Sea_Shell said:

Notepad_Phil said:

Sea_Shell said:

Notepad_Phil said:

Sea_Shell said:

...
However, with the rises in interest rates of late, do we put this is a 1 year fixed to guarantee ~2.5%, or put in our ISA in a fund with a similar risk profile from whence it came and hope it makes at least that back over the same period.
...

Well personally I'm moving any cash that comes in during a month into funds as I've got more than enough cash for the next umpteen years, which I think you may have too, so that would be my personal opinion on what's best to do - though if there was a specific need for the cash in a year's time then that might persuade me otherwise.

Is that "new" cash?  Wages?   Or drawdown?

Our "new" cash is literally a few £s of interest here and there.

It predominantly comes from a couple of small DB pensions and the drawdown of the natural yield from my DC pensions, so we're talking about a four figure sum a bit bigger than your's. Personally I'm putting them into VLS60 and HSBC Global Strategy Balanced as I consider them my low risk cash alternative to the other 100% equity funds that I hold.

That HSBC fund looks similar to our 7IM AAP balanced C, with slightly better performance, which would probably be the fund we'd add to.

It would be brave (or stupid?) to put more in our Rathbones Global Opp fund!! 😉.   But then it could be the shrewdest move ever!!! 

Nothing wrong in doing a bit of both as long as you're happy to do so and will still be able to sleep at night during any properly major downturns.

Bravepants

Notepad_Phil said:

Sea_Shell said:

Notepad_Phil said:

Sea_Shell said:

...
However, with the rises in interest rates of late, do we put this is a 1 year fixed to guarantee ~2.5%, or put in our ISA in a fund with a similar risk profile from whence it came and hope it makes at least that back over the same period.
...

Well personally I'm moving any cash that comes in during a month into funds as I've got more than enough cash for the next umpteen years, which I think you may have too, so that would be my personal opinion on what's best to do - though if there was a specific need for the cash in a year's time then that might persuade me otherwise.

Is that "new" cash?  Wages?   Or drawdown?

Our "new" cash is literally a few £s of interest here and there.

It predominantly comes from a couple of small DB pensions and the drawdown of the natural yield from my DC pensions, so we're talking about a four figure sum a bit bigger than your's. Personally I'm putting them into VLS60 and HSBC Global Strategy Balanced as I consider them my lower risk cash alternative to the other 100% equity funds that I hold.

If you please don't mind me asking, and I don't wish to divert the thread, but on what platform do you hold your HSBC Global Strategy fund? I use Vanguard for both my funds in my ISA, but I would probably want to "diversify" to HSBC in future. I was thinking Hargreaves Lansdown, but they are about 0.2% more expensive than what I'm used to.

Notepad_Phil

Bravepants said:

Notepad_Phil said:

Sea_Shell said:

Notepad_Phil said:

Sea_Shell said:

...
However, with the rises in interest rates of late, do we put this is a 1 year fixed to guarantee ~2.5%, or put in our ISA in a fund with a similar risk profile from whence it came and hope it makes at least that back over the same period.
...

Well personally I'm moving any cash that comes in during a month into funds as I've got more than enough cash for the next umpteen years, which I think you may have too, so that would be my personal opinion on what's best to do - though if there was a specific need for the cash in a year's time then that might persuade me otherwise.

Is that "new" cash?  Wages?   Or drawdown?

Our "new" cash is literally a few £s of interest here and there.

It predominantly comes from a couple of small DB pensions and the drawdown of the natural yield from my DC pensions, so we're talking about a four figure sum a bit bigger than your's. Personally I'm putting them into VLS60 and HSBC Global Strategy Balanced as I consider them my lower risk cash alternative to the other 100% equity funds that I hold.

If you please don't mind me asking, and I don't wish to divert the thread, but on what platform do you hold your HSBC Global Strategy fund? I use Vanguard for both my funds in my ISA, but I would probably want to "diversify" to HSBC in future. I was thinking Hargreaves Lansdown, but they are about 0.2% more expensive than what I'm used to.

I use HL (0.45% platform fee) whilst Mrs Notepad uses Fidelity (0.35% platform fee) - but once a year we move them across to our S&S ISAs held on iweb, where after paying the £5 purchase fees there is then no further platform fee (though you do have a one off iweb £100 opening fee the very first time you open an account with them, note it's not per yearly ISA opening that is free ).

Audaxer

Sea_Shell said:

Notepad_Phil said:

Sea_Shell said:

Notepad_Phil said:

Sea_Shell said:

...
However, with the rises in interest rates of late, do we put this is a 1 year fixed to guarantee ~2.5%, or put in our ISA in a fund with a similar risk profile from whence it came and hope it makes at least that back over the same period.
...

Well personally I'm moving any cash that comes in during a month into funds as I've got more than enough cash for the next umpteen years, which I think you may have too, so that would be my personal opinion on what's best to do - though if there was a specific need for the cash in a year's time then that might persuade me otherwise.

Is that "new" cash?  Wages?   Or drawdown?

Our "new" cash is literally a few £s of interest here and there.

It predominantly comes from a couple of small DB pensions and the drawdown of the natural yield from my DC pensions, so we're talking about a four figure sum a bit bigger than your's. Personally I'm putting them into VLS60 and HSBC Global Strategy Balanced as I consider them my low risk cash alternative to the other 100% equity funds that I hold.

That HSBC fund looks similar to our 7IM AAP balanced C, with slightly better performance, which would probably be the fund we'd add to.

It would be brave (or stupid?) to put more in our Rathbones Global Opp fund!! 😉.   But then it could be the shrewdest move ever!!! 

As you already have a substantial investment in Rathbone Global Opportunities, and if you still think it is worth holding, I don't think it is stupid to invest another £1,100 in that fund when prices are low. If you were suggesting putting a significant amount of your cash reserves into it, to hopefully benefit from the recovery, that might be considered stupid or risky if going above your risk level.

I'm thinking of reinvesting some accumulated dividend cash into a 100% equity fund or IT rather than one of my multi asset funds.

michaels

Audaxer said:

Sea_Shell said:

Notepad_Phil said:

Sea_Shell said:

Notepad_Phil said:

Sea_Shell said:

...
However, with the rises in interest rates of late, do we put this is a 1 year fixed to guarantee ~2.5%, or put in our ISA in a fund with a similar risk profile from whence it came and hope it makes at least that back over the same period.
...

Well personally I'm moving any cash that comes in during a month into funds as I've got more than enough cash for the next umpteen years, which I think you may have too, so that would be my personal opinion on what's best to do - though if there was a specific need for the cash in a year's time then that might persuade me otherwise.

Is that "new" cash?  Wages?   Or drawdown?

Our "new" cash is literally a few £s of interest here and there.

It predominantly comes from a couple of small DB pensions and the drawdown of the natural yield from my DC pensions, so we're talking about a four figure sum a bit bigger than your's. Personally I'm putting them into VLS60 and HSBC Global Strategy Balanced as I consider them my low risk cash alternative to the other 100% equity funds that I hold.

That HSBC fund looks similar to our 7IM AAP balanced C, with slightly better performance, which would probably be the fund we'd add to.

It would be brave (or stupid?) to put more in our Rathbones Global Opp fund!! 😉.   But then it could be the shrewdest move ever!!! 

As you already have a substantial investment in Rathbone Global Opportunities, and if you still think it is worth holding, I don't think it is stupid to invest another £1,100 in that fund when prices are low. If you were suggesting putting a significant amount of your cash reserves into it, to hopefully benefit from the recovery, that might be considered stupid or risky if going above your risk level.

I'm thinking of reinvesting some accumulated dividend cash into a 100% equity fund or IT rather than one of my multi asset funds.

If they were worth the price when they were £x then surely they are even more worth it at £x - 20%?

Unless you think the world has hanged so your strategy should too.

Sea_Shell

Audaxer said:

Sea_Shell said:

Notepad_Phil said:

Sea_Shell said:

Notepad_Phil said:

Sea_Shell said:

...
However, with the rises in interest rates of late, do we put this is a 1 year fixed to guarantee ~2.5%, or put in our ISA in a fund with a similar risk profile from whence it came and hope it makes at least that back over the same period.
...

Well personally I'm moving any cash that comes in during a month into funds as I've got more than enough cash for the next umpteen years, which I think you may have too, so that would be my personal opinion on what's best to do - though if there was a specific need for the cash in a year's time then that might persuade me otherwise.

Is that "new" cash?  Wages?   Or drawdown?

Our "new" cash is literally a few £s of interest here and there.

It predominantly comes from a couple of small DB pensions and the drawdown of the natural yield from my DC pensions, so we're talking about a four figure sum a bit bigger than your's. Personally I'm putting them into VLS60 and HSBC Global Strategy Balanced as I consider them my low risk cash alternative to the other 100% equity funds that I hold.

That HSBC fund looks similar to our 7IM AAP balanced C, with slightly better performance, which would probably be the fund we'd add to.

It would be brave (or stupid?) to put more in our Rathbones Global Opp fund!! 😉.   But then it could be the shrewdest move ever!!! 

As you already have a substantial investment in Rathbone Global Opportunities, and if you still think it is worth holding, I don't think it is stupid to invest another £1,100 in that fund when prices are low. If you were suggesting putting a significant amount of your cash reserves into it, to hopefully benefit from the recovery, that might be considered stupid or risky if going above your risk level.

I'm thinking of reinvesting some accumulated dividend cash into a 100% equity fund or IT rather than one of my multi asset funds.

I see what you mean.      We have 3 years of cash (or 4 years, depending on how tight we wanted to be!)

And yes, if we were happy to buy more 100% equities when they were at 192p & 174p, we should be happy to buy at a "discount" of only 143p.   They topped out at 203p in November.   30% drop. 

But then isn't the idea to put ourselves the the "same" position we'd have been in if we HADN'T begun drawdown, ie keeping the money in a fund similar to the pension.  (its an Aviva fund, so can't buy the exact one through Fidelity)

If it wasn't for using the PA this tax year, we'd have simply suspended DD.

Although, I suppose there is nothing to stop us doing that, and then just upping the remaining monthly payment so we still pull the total out by year end?    -  I've only just thought of that!!!   - If the market has dropped further by then, we haven't actually lost anything, have we?

k_man

Sea_Shell said:

Audaxer said:

Sea_Shell said:

Notepad_Phil said:

Sea_Shell said:

Notepad_Phil said:

Sea_Shell said:

...
However, with the rises in interest rates of late, do we put this is a 1 year fixed to guarantee ~2.5%, or put in our ISA in a fund with a similar risk profile from whence it came and hope it makes at least that back over the same period.
...

Well personally I'm moving any cash that comes in during a month into funds as I've got more than enough cash for the next umpteen years, which I think you may have too, so that would be my personal opinion on what's best to do - though if there was a specific need for the cash in a year's time then that might persuade me otherwise.

Is that "new" cash?  Wages?   Or drawdown?

Our "new" cash is literally a few £s of interest here and there.

It predominantly comes from a couple of small DB pensions and the drawdown of the natural yield from my DC pensions, so we're talking about a four figure sum a bit bigger than your's. Personally I'm putting them into VLS60 and HSBC Global Strategy Balanced as I consider them my low risk cash alternative to the other 100% equity funds that I hold.

That HSBC fund looks similar to our 7IM AAP balanced C, with slightly better performance, which would probably be the fund we'd add to.

It would be brave (or stupid?) to put more in our Rathbones Global Opp fund!! 😉.   But then it could be the shrewdest move ever!!! 

As you already have a substantial investment in Rathbone Global Opportunities, and if you still think it is worth holding, I don't think it is stupid to invest another £1,100 in that fund when prices are low. If you were suggesting putting a significant amount of your cash reserves into it, to hopefully benefit from the recovery, that might be considered stupid or risky if going above your risk level.

I'm thinking of reinvesting some accumulated dividend cash into a 100% equity fund or IT rather than one of my multi asset funds.

I see what you mean.      We have 3 years of cash (or 4 years, depending on how tight we wanted to be!)

And yes, if we were happy to buy more 100% equities when they were at 192p & 174p, we should be happy to buy at a "discount" of only 143p.   They topped out at 203p in November.   30% drop. 

But then isn't the idea to put ourselves the the "same" position we'd have been in if we HADN'T begun drawdown, ie keeping the money in a fund similar to the pension.  (its an Aviva fund, so can't buy the exact one through Fidelity)

If it wasn't for using the PA this tax year, we'd have simply suspended DD.

Although, I suppose there is nothing to stop us doing that, and then just upping the remaining monthly payment so we still pull the total out by year end?    -  I've only just thought of that!!!   - If the market has dropped further by then, we haven't actually lost anything, have we?

You are slipping  into market timing territory there!

If the market drops, and you take the same £ amount out as you would otherwise (to use PA), then you will have taken a bigger % from the pot.
Hopefully not too much bigger, but who knows!

Sea_Shell

There's always the "do nothing" plan!!

But then what's the point of a cash buffer??   If not now, when? 

Or is a cash buffer only really effective if you are "all in" with 100% equities investments to begin with?

So we've got 5 options...

1. Do nothing, take DD, spend it.
2. Take it and put it in a 1yr fix at 2.55%, spend lower rate cash.
3. Reinvest in "similar" class, spend cash

4. Reinvest in "100%" equity class, spend cash

5. Suspend DD, for a few months, spend cash, draw more later.

The more I try and overthink it, the more I err towards 1 (or 2.)😉