20% drop in 6 months.

[Deleted User]

Bad news: The fall in real terms is quite a bit deeper.  Also, GBP fell 10% vs USD this year, which makes investments counted in sterlings look better than the value they hold.  

Good news: this is normal. Some of the lessons learnt over the years:

1. understand your risk tolerance and set asset allocation appropriately;
2. asset values don't always rise and it is possible to lose money over some time periods. This is normal and should be expected to happen. Don't act surprised when it happens. 
3. When selecting investments, try to maintain an appropriate margin of safety. I long ago pawned my crystal ball and accept I will make mistakes with some of our investment choices.
4. History has shown that in the long-term, i.e. 20+ year charts, corrections and bear markets generally are small blips that can be hard to identify, so spending time trying to identify them in advance and market time them is generally an exercise in futility.
5. It is best to play the long game, i.e. stay the course, rather than the short game, i.e. market timing

westv

Deleted_User said:

Bad news: The fall in real terms is quite a bit deeper.  Also, GBP fell 10% vs USD this year, which makes investments counted in sterlings look better than the value they hold.  

Good news: this is normal. Some of the lessons learnt over the years:

1. understand your risk tolerance and set asset allocation appropriately;
2. asset values don't always rise and it is possible to lose money over some time periods. This is normal and should be expected to happen. Don't act surprised when it happens. 
3. When selecting investments, try to maintain an appropriate margin of safety. I long ago pawned my crystal ball and accept I will make mistakes with some of our investment choices.
4. History has shown that in the long-term, i.e. 20+ year charts, corrections and bear markets generally are small blips that can be hard to identify, so spending time trying to identify them in advance and market time them is generally an exercise in futility.
5. It is best to play the long game, i.e. stay the course, rather than the short game, i.e. market timing

Wise words. The only guarantees are that corrections and crashes WILL happen.

ericferret

Fairdeal said:

Scottish Widows pension fund from previous employment with no ongoing payments in (or out) has fallen from 72k to 58k since December. The money is in their Pension Protector Fund and Pension Portfolio 4. I am 62 and not playing the long game. Any suggestions? Let it ride? Move it? 

Part of the problem here and I am in exactly the same boat is Scottish Widows calling this a Pension Protector.
People expect it to do just that.
General stock market loses are probably around  10%,  SW Pension Protector is 25% 

I intended to retire in the next few months and now feel that I have to continue at work.

Albermarle

ericferret said:

Fairdeal said:

Scottish Widows pension fund from previous employment with no ongoing payments in (or out) has fallen from 72k to 58k since December. The money is in their Pension Protector Fund and Pension Portfolio 4. I am 62 and not playing the long game. Any suggestions? Let it ride? Move it? 

Part of the problem here and I am in exactly the same boat is Scottish Widows calling this a Pension Protector.
People expect it to do just that.
General stock market loses are probably around  10%,  SW Pension Protector is 25% 

I intended to retire in the next few months and now feel that I have to continue at work.

I have linked the other related thread here for completeness.

Scottish Widows Pension Dramatic Fall in value — MoneySavingExpert Forum

pensionpawn

tigerspill said:

pensionpawn said:

tigerspill said:

The question for me is rather than selling a locking in losses, is whether to buy in more.  We have just inherited some money and trying to work out what to do with it (other than blowing it).
I have been considering a half/half split between CGT and PNL.

Have you heard the phrase "never try to catch a falling knife"? I would never buy on the way down however once growth has re-established I may jump in. So I'll never achieve the minimum price with this strategy however it should minimise further negative cost price averaging. However nothing in life is guaranteed they say, besides death and income tax (unless you live in the middle east).

If you are investing for the long term, this isnt really true?  In the "V" of down and up, a price bought at on the way down, will be repeated on the way up.  But you will be invested longer and achieve dividends in that period.  So surely investing on the way down on the whole is better?

You're assuming there's a way up.... You can convince yourself that cost price averaging is a 'silver lining' however there are always better places to 'store' store excess money than a fund in free fall.

MK62

pensionpawn said:

tigerspill said:

pensionpawn said:

tigerspill said:

The question for me is rather than selling a locking in losses, is whether to buy in more.  We have just inherited some money and trying to work out what to do with it (other than blowing it).
I have been considering a half/half split between CGT and PNL.

Have you heard the phrase "never try to catch a falling knife"? I would never buy on the way down however once growth has re-established I may jump in. So I'll never achieve the minimum price with this strategy however it should minimise further negative cost price averaging. However nothing in life is guaranteed they say, besides death and income tax (unless you live in the middle east).

If you are investing for the long term, this isnt really true?  In the "V" of down and up, a price bought at on the way down, will be repeated on the way up.  But you will be invested longer and achieve dividends in that period.  So surely investing on the way down on the whole is better?

You're assuming there's a way up.... You can convince yourself that cost price averaging is a 'silver lining' however there are always better places to 'store' store excess money than a fund in free fall.

If you don't assume "there's a way up", then surely you should sell out now........

tigerspill

pensionpawn said:

tigerspill said:

pensionpawn said:

tigerspill said:

The question for me is rather than selling a locking in losses, is whether to buy in more.  We have just inherited some money and trying to work out what to do with it (other than blowing it).
I have been considering a half/half split between CGT and PNL.

Have you heard the phrase "never try to catch a falling knife"? I would never buy on the way down however once growth has re-established I may jump in. So I'll never achieve the minimum price with this strategy however it should minimise further negative cost price averaging. However nothing in life is guaranteed they say, besides death and income tax (unless you live in the middle east).

If you are investing for the long term, this isnt really true?  In the "V" of down and up, a price bought at on the way down, will be repeated on the way up.  But you will be invested longer and achieve dividends in that period.  So surely investing on the way down on the whole is better?

You're assuming there's a way up.... You can convince yourself that cost price averaging is a 'silver lining' however there are always better places to 'store' store excess money than a fund in free fall.

Well, in 100% of previous dips (assuming even a moderately a diversified portfolio), there has been a recovery.  So that is a pretty good indicator I would have thought.

I assume you have sold up?

Albermarle

tigerspill said:

pensionpawn said:

tigerspill said:

pensionpawn said:

tigerspill said:

The question for me is rather than selling a locking in losses, is whether to buy in more.  We have just inherited some money and trying to work out what to do with it (other than blowing it).
I have been considering a half/half split between CGT and PNL.

Have you heard the phrase "never try to catch a falling knife"? I would never buy on the way down however once growth has re-established I may jump in. So I'll never achieve the minimum price with this strategy however it should minimise further negative cost price averaging. However nothing in life is guaranteed they say, besides death and income tax (unless you live in the middle east).

If you are investing for the long term, this isnt really true?  In the "V" of down and up, a price bought at on the way down, will be repeated on the way up.  But you will be invested longer and achieve dividends in that period.  So surely investing on the way down on the whole is better?

You're assuming there's a way up.... You can convince yourself that cost price averaging is a 'silver lining' however there are always better places to 'store' store excess money than a fund in free fall.

Well, in 100% of previous dips (assuming even a moderately a diversified portfolio), there has been a recovery.  So that is a pretty good indicator I would have thought.

I assume you have sold up?

It looks like the OP's fund has been particularly affected by the rather unusually large drop in bond/gilts (that these SW Pension Protector funds are rather full of) as opposed to a general drop in equity markets.
In this case, a full recovery could take a long time, even if stock markets do pick up again soon.

Grumpy_chap

A short while ago, my pension fund was showing a 20% drop in 6 months, though the drop had only started from January.
There are now 6 months post January and the fund is showing about 14% drop in 6 months (because of recent recovery).
If, by the end of the year, the fund is recovered to the start of year point, that will show a massive increase in the 6 month graph.

I certainly hope that the fund recovers well as I was ploughing in to use up contribution allowance and carry forward ahead of March (before past contribution allowance became lost to time at the end of the tax year) and have contributed heavily since to use the carry forward that will be lost by the end of the current tax year.  That was not for any reason than it happened to be when the contributions were made - I certainly was not looking at trends to pick the right time.

With any luck, these contributions now will prove to have been well (luckily) timed to buy cheap.

dunstonh

its worth noting that equity drops do tend to recover quickly after most negative periods.  However bond drops tend to take much longer.