Should I withdraw my investment?

youth_leader

I have an IFA handling my 'low risk' investments. The money is for my future care, I am 65 and hopefully I won't need to access it for another ten years or so. 

I am nervous of the future with the war/recession and am wondering if I should withdraw my investments and put the cash into fixed bonds?

Albermarle

Currently any cash savings will be losing out to inflation, so a guaranteed loss of value.

If you have a ten year + timeframe then any drop in your investments should have time to recover.
In fact despite all the bad news ( and when is there ever anything else in the news ) markets have probably not dropped as much as expected . Also it follows many years of good growth , so some correction was to be expected anyway.

Also you could just convert a part of your investments to cash if you really feel that is the right way to go.

youth_leader

Thank you @Albermarle.  I am widowed and can't discuss it with my young adult children, but I do know I definitely don't want them to look after me when the time comes.  I remember a woman at work in the 87 crash crying, she lost everything.  I'll leave it and see what happens.

adindas

youth_leader said:

Thank you @Albermarle.  I am widowed and can't discuss it with my young adult children, but I do know I definitely don't want them to look after me when the time comes.  I remember a woman at work in the 87 crash crying, she lost everything.  I'll leave it and see what happens.

I fully agree with the previous poster. Risk free alternatives in saving account, Gilts, T-Bonds is a guaranteed money losing strategy. Currently the term saving is paying around 1.5% but the inflation is around 4.9%

Taking risk a little bit by put part of the money in a low risk investment is not a bad thing especially if your horizon is 10yr+. In the long run equities always beat bonds in quite significant degrees. Trust your IFA handling your 'low risk' investments.

Malthusian

I remember a woman at work in the 87 crash crying, she lost everything.

If she lost everything she didn't lose it "in the crash". She invested in some kind of highly risky individual investment and it went bust. That can happen with high risk undiversified investments whether there is a crash or not.
A diversified investment would have typically recovered from the 1987 crash by 1989.

dunstonh

I am nervous of the future with the war/recession and am wondering if I should withdraw my investments and put the cash into fixed bonds?

The market falls have only been around a third of the coronavirus falls in 2020 and less than the falls in 2018, 2015/16 and much lower than 2008/9. 

So, what did you do in those worse negative periods and why is now different?

 I remember a woman at work in the 87 crash crying, she lost everything.  I'll leave it and see what happens.

If she lost everything that would mean she must have invested 100% into a company that completely failed.   If she had invested with a diverse spread (as most people do) then she would have recovered the value within a few years.

The 87 drop was comparable to the coronavirus drop.   Both of which were lower than the dot.com period falls and the credit crunch falls.

You can see from above that the left graph is long term and the right graph is a snapshot of the 1987 fall.   It is hard to see how she lost everything as it was effectively a boom in early 1987 that unwound late 87 back towards the long term average.  By 1989 it was higher than the boom maximum.

So, the problem would not have been investing but instead investing inappropriately. 

youth_leader

Thank you @dunstonh, I received the monies upon my husband's death in 2016, I invested the funds with an IFA recommended by a friend  in 2017. He contacted me at the beginning of Covid lockdown and I did agree to continue with my investments.

Thank you for explaining the 87 situation. It was a senior member of staff, near retirement, and I didn't ask her any details. 

Thrugelmir

youth_leader said:

I have an IFA handling my 'low risk' investments. The money is for my future care, I am 65 and hopefully I won't need to access it for another ten years or so. 

I am nervous of the future with the war/recession and am wondering if I should withdraw my investments and put the cash into fixed bonds?

Then you need to be having this conversation with them. As it's the service you are paying for. 

Woolsery

There are other ways to use some of the money. For example, with the recent hikes in energy costs and being retired, it's looking more attractive to stick solar panels on the roof. Payback was 7 years, but now maybe only 5 for me, but YMMV depending on individual circumstances like aspect etc.

tebbins

youth_leader said:

I have an IFA handling my 'low risk' investments. The money is for my future care, I am 65 and hopefully I won't need to access it for another ten years or so. 

I am nervous of the future with the war/recession and am wondering if I should withdraw my investments and put the cash into fixed bonds?

Literally everyone who ever had any money in the market has either said or thought that at least once about something that turned out not to be too big of a deal. Just go on the wikipedia page for a random year, read through the main events and ask yourself how you would have reacted, then look at how various investments would have performed through that period.

youth_leader

Thanks to everyone for your replies and advice.  My husband dealt with all of our finances and I lack confidence.