Advice for pension funds with looming stock market crash

lamont77

Im in my mid 40's and am investing in the following funds for my pension. They are all mid to high risk but have a good track record of performance. 

SL Blackrock ACS US Equity Tracker Pension Fund	20%
SL BlackRock ACS World ex UK Equity Tracker Pn Fd	20%
SL BlackRock Overseas Equity Pension Fund	20%
SL BNY Mellon Global Balanced Pension Fund	20%
SL Jupiter Merlin Balanced Portfolio Pension Fund	10%
Standard Life Index Linked Bond Pension Fund	10%

My dad thinks that there is a crash around the corner that could well blow 2007/2008 out of the water, so I was wondering if I should move my pensions investments into a single low risk broad fund to stem any potential loss? 

I dont need access to my pension for 20 years. Would it be better to leave them where they are assuming that there will be a recovery in that time period? 

Any insight or advice here would be brilliant thanks.  

[Deleted User]

Nobody knows what is around the corner.  Ignore predictions.  Eventually there will be a “crash” but we don’t know when. 

Thrugelmir

lamont77 said:

They are all mid to high risk but have a good track record of performance. 

.  

Historic track records mean nothing. The higher the risk the greater the volatility. Bubbles pop for good reasons. 

Phantom151

There is always a crash round the corner. Sometimes the corner is very, very far away.

zagfles

Is your Dad a billionaire with his own private yacht? If not, why does he think he knows better than the collective market opinion which sets current stockmarket prices? If it was obvious or very likely that prices will crash soon, then they'd have already crashed because there'd be no buyers and lots of sellers. The current prices reflects the value at which there are about equal numbers of buyers and sellers, ie where opinion is split as to whether prices will rise or fall.

Some people think they know better than the collective market opinion, but the reality is hardly any do, if they did they'd be a billionaire if they could predict the next market move. So unless they are, I'd ignore them!

NannaH

With that kind of timeframe it shouldn’t even be a concern to you,  if prices drop by half and don’t recover for years you’ll have a golden opportunity to buy twice the amount you would have without a crash. 

It’s only a problem if you need to sell funds whilst in the middle of a prolonged fall,  think yourself lucky that you have many years before you have to do that.  

On the off chance that there is a major crash from which the world never recovers,  we’d have far more to worry about than share prices! 

Bravepants

Also don't forget that if the market tanks 50% many people who have DC based work pensions, which is the norm these days, will also see a drop. Of course the magnitude of each individual's drop would depend on the asset mix in their respective portfolios. If you are 20 years away from needing your money for retirement then you have plenty of time to weather storms. You could see two crashes in that time. I would argue that someone 20 years away from retirement would "welcome" a drop, because their monthly contributions would buy more units.

westv

Seem to be roughly every 7 years so put 2027 in your diary. 

Albermarle

My dad thinks that there is a crash around the corner that could well blow 2007/2008 out of the water, so I was wondering if I should move my pensions investments into a single low risk broad fund to stem any potential loss? 

Over the next 20 years , you will probably see at least three crashes and one of them might be a big'un . Nobody knows when they will happen , not even your Dad.

On the other hand it would seem very unlikely that your approx 75% equity portfolio will not at least have beaten inflation over the next 20 years and hopefully significantly better.

There could be some sense in derisking a little in 10/15 years time as your retirement from a regular income looms on the horizon. 

Marcon

lamont77 said:

Im in my mid 40's and am investing in the following funds for my pension. They are all mid to high risk but have a good track record of performance. 

SL Blackrock ACS US Equity Tracker Pension Fund	20%
SL BlackRock ACS World ex UK Equity Tracker Pn Fd	20%
SL BlackRock Overseas Equity Pension Fund	20%
SL BNY Mellon Global Balanced Pension Fund	20%
SL Jupiter Merlin Balanced Portfolio Pension Fund	10%
Standard Life Index Linked Bond Pension Fund	10%

My dad thinks that there is a crash around the corner that could well blow 2007/2008 out of the water, so I was wondering if I should move my pensions investments into a single low risk broad fund to stem any potential loss? 

I dont need access to my pension for 20 years. Would it be better to leave them where they are assuming that there will be a recovery in that time period? 

Any insight or advice here would be brilliant thanks.  

Is your dad a finance expert, presumably with vast wealth to demonstrate his ability to call the market? If not, then not sure why you think you should act on his advice. If you move into low risk funds to stem any potential loss, you'll also stem any potential gain if dad's armchair ponderings prove inaccurate - and if he's not a regulated adviser you've appointed to act for you, you won't have a complaints procedure open to you!

dunstonh

My dad thinks that there is a crash around the corner that could well blow 2007/2008 out of the water

What knowledge and information does your dad have that suggests his opinion is reliable?

Crashes are always coming.   Some industries have already crashed in the last few months.

I dont need access to my pension for 20 years. Would it be better to leave them where they are assuming that there will be a recovery in that time period? 

So, in that 20 year period you will probably see five or six crashes.  And they will be great news for you as you will be buying units cheaper each time one takes place.

SL Blackrock ACS US Equity Tracker Pension Fund	20%
SL BlackRock ACS World ex UK Equity Tracker Pn Fd	20%
SL BlackRock Overseas Equity Pension Fund	20%
SL BNY Mellon Global Balanced Pension Fund	20%
SL Jupiter Merlin Balanced Portfolio Pension Fund	10%
Standard Life Index Linked Bond Pension Fund	10%

Three of the funds are high risk.  two of the funds are more around medium and one is low.     You are light in UK equity, which is currently one of the best performing areas in this short term period.   That in itself is irrelevant but it does seem strange to have an allocation that is light in the UK.   Your higher weightings in the US could be more damaging as historically, the US does tend to cycle through periods of out performance followed by underperformance and so on.  Nothing says it will continue but this cycle has seen the US outperform other areas.   Your active decision making on the weightings means you expect that to continue.  Anything is possible but it is unlikely as the US potentially enters a period of global decline against the other large nations.