Advice for pension funds with looming stock market crash

Thrugelmir

Deleted_User said:

The issue of “currency risk” when holding foreign assets is a bit of a red herring.  Currencies are just measuring tapes. Its the intrinsic value of the asset that translates into how many Hondas you can buy when you sell the asset.  Currency fluctuations can have impacts in the short term but not in context of pension investment.  

Robo advisers are not competing against the likes of Vanguard.  Many use a mix of Vanguard’s funds.  Passive investors won’t use Robos. Robos compete with human advisors offering ongoing portfolio management services.  They are cheaper and remove the “human emotion” element which is considered to be harmful. 

If you don't comprehend risk you certainly shouldn't be fishing for herrings.....  Currency risk is basic maths ultimately. Not complex. Just an unknown. 

For the record. Vanguard does offer a robo service.  Why wouldn't they. It's the future of low cost investing. 

https://investor.vanguard.com/advice/digital-advisor

dunstonh

Interesting point about robo investing and while I don't use it I find it very interesting and agree that it could be a great tool for non professional investors. I wonder how prevalent and accessible it will become among the majority of UK company DC pension schemes though, who tend to flock to the large providers such as Aviva, Legal & General for their pension plans.

Robos are more expensive than most of those schemes.  Indeed, some robos are more expensive than full advice.

Robo advisers so far have failed to get as much market share as they thought.  Most of them are loss making and the money is running out.     There is also the lack of human input which puts a lot of the older generation off.   Plus, the over reliance on risk profile questions which lead to the wrong outcomes around 1/4 of the time.

bostonerimus

Strategies for a crash, or indeed any other situation.

make sure you have at least 6 months spending cash in the bank
make sure you have an appropriate asset allocation for your circumstances and a strategy for both up and down markets ie rebalancing or sitting tight.
pour yourself a drink and don't panic sell
realize that it's just the first crash of many that you will see if you are a beginner.
fasten your seatbelts......https://www.youtube.com/watch?v=3vEEh0GF_C8

[Deleted User]

Robo-advisors are not going anywhere.  Some will undoubtedly close, as will many human advisers.  Big boys like Vanguard and Schwab are offering this service and are here to stay and grow. And some of the others will survive and prosper.  

In Canada Wealthsimple went from 1000 clients in 2015 to  over 1.5 million in 2021. Not bad for a smallish country.  Quite an innovative company; offering lots of novel things. Don’t know about UK but people are the same everywhere. 

Robos deliberately focus on millennials.  Successfully. Millennials go either DIY or robo route and are quitting financial advisers.  Over time assets will be passing on to millennials so that tells us what will happen next. 

On pricing… I am sure one can find a robo more expensive than human advisers but that’s not the norm. 

westv

Thankfully the prospect of WW3 hasn't dragged markets down too much so far.

saucer

westv said:

Thankfully the prospect of WW3 hasn't dragged markets down too much so far.

My Lloyds Bank shares aren’t looking too rosey

Workerdrone

Not been a brilliant few years for new retirees SORR. I'd imagine most retirement portfolios stay clear of the tech stocks which saw a nice COVID bounce. First COVID, then inflationary pressures, now war in Ukraine. Glad I am still in the accumulation phase but watching with interest to learn how best to handle such things.

QrizB

saucer said:

westv said:

Thankfully the prospect of WW3 hasn't dragged markets down too much so far.

My Lloyds Bank shares aren’t looking too rosey

Polymetal and Evraz are looking worse!

OP, by any chance is your father called Vladimir?

Thrugelmir

QrizB said:

saucer said:

westv said:

Thankfully the prospect of WW3 hasn't dragged markets down too much so far.

My Lloyds Bank shares aren’t looking too rosey

Polymetal and Evraz are looking worse!

OP, by any chance is your father called Vladimir?

Gold price is up over 2% though. 

BritishInvestor

Workerdrone said:

Not been a brilliant few years for new retirees SORR. I'd imagine most retirement portfolios stay clear of the tech stocks which saw a nice COVID bounce. First COVID, then inflationary pressures, now war in Ukraine. Glad I am still in the accumulation phase but watching with interest to learn how best to handle such things.

What makes you say that? A typical 60/40 portfolio is up over 20% over the last 3 years, and inflation has been relatively benign until recently. 

Have a look at the 1970s to understand what genuine SORR is.