switching asset allocations

eastmidsaver

hi,

so around 18 months ago someone i know who hit retirement age invested their pension into a VLS 20 as he wanted to take a lower risk and possibly start withdrawing the money in the near future.

however, since then he has sold his second house and has some of the proceeds from that sale.  this means his timeframe has now changed and doesn't expect to need to withdraw for at least a few years.  therefore it probably makes sense to now keep the money in something with more equity (such as VLS60) so allow a better chance of growth.

due to bonds suffering quite a bit this the year, the VLS 20 is currently in a loss.  so if he was to sell this and switch to VLS60 it would be at a loss.   
the question basically is,  is it worth taking the loss and switching now.  or should he wait for VLS20 to recover first, and then switch to VLS60 ?
the other alternative i was thinking to suggest is maybe drip selling the VLS20,  and then drip buying VLS60,  over a period of time.

be interesting to know your thoughts.

thanks.

InvesterJones

Ignore the past, you can't do anything about that now. Base your choice on what you think is the right thing for now and going forwards. So imagine you were making a fresh investment today, what would you do?

I found this recent medium term (3-5 years) investment video from pensioncraft very informative: https://www.youtube.com/watch?v=2dz_tgTQedQ

eastmidsaver

thanks for the info

Albermarle

The bonds have probably taken a semi permanent hit , and will probably be a long time before they recover, so he could have a long wait.