Was impact of 2008/9 financial crisis as bad as current events on Pensions?

Workerdrone

anonmoose said:

Workerdrone said:

anonmoose said:

Worker drone a joint salary of £80k is good especially in an area that house prices are so low! 

I am also 46 and we are on jointly slightly less than you with 2 kids. Our mortgage was over £210k until recently when an inheritance has allowed us to pay it down closer to £140k. 

We are now paying in £1500 a month between us into pensions but before reducing our mortgage with the  inheritance  that wouldn't have been possible. 

I think you are doing a great job I am not criticising, but you have to accept what a fortunate position you are in. You are on a good salary in a cheap part of the country.

Oh I do count my blessings. Chiefly amongst them is when I got together with my wife (i.e second marriage), she still had a house. I suppose I could say had it not been for my earlier experiences we would be in an even better position, but hey ho. I don't take offence but NannahH's comment was "I’m sorry but someone able to put £1500 a month into a pension at age 46, (presumably with a mortgage and a youngish family ?)  isn’t ‘scraping it together". She then goes on to say her 33 year old daughter is on 50k but doesn't mention if there's a partner etc. I was simply seeking to illustrate how we structure our finances and how I've built that amount up over the years through a change in attitude to handling money. Ive been with my current employer 15 years and started on 23k, wife was on band 5 salary of around 18k back then. Of course I don't take it as criticism but fortunate is a word with connotations of blessed, lucky, charmed etc. I've certainly had more than my share of financial and life misfortune. My current circumstances are as a result of specific planning and preferences on my part largely as a result of being burned. I did choose not to go to university as I felt is was very much being overdone at the time and foresaw a glut of graduates with debts, hence I never acquired student debt. I am not attracted to the cosmopolitan nature of cities and am quite a home bird so I stayed in the county I was born. Im not sure if being born in one of the poorer parts of the country could be considered fortunate or unfortunate, certainly fortunate in terms of affordable property but likely cancelled out by up until now generally lower earnings potential. Whilst as I say I don't take offence at her comment and comparison with her daughter situation, her comment is denigrating to those of us who plan finances carefully. It rather smacks of "I couldn't do it, therefore you somehow had it easy". My rather long reply was to illustrate that a.) Ive not had it easy and b.) How I got to where I am by "scraping it together". I have friends on very good money who bitterly complain they'll never get to take their kids to Disney, but they eat out several times and week keep buying 60k cars on pcp and are always clothes shopping. It's about choices.

Totally understand what you are saying with this.  

With regards to university though I am your age and I went and came out with just £3k student loan which I had used to buy a £3k car.

Back then this was possible as I was the last year I think to get no student fees and a grant. I even ran a car throughout my time at uni.

And no I didn't get a single penny financially from my parents but I worked full time every holiday in an office. So uni could be done back then with no debts if you cut your cloth and worked full time in your time off. 

Ah the good old days. For me (being a home bird) it didn't appeal. I think I was frightened of the notion but I do recall seeing many of my compatriots going in for what would now be called soft subjects and I did wonder what they would ultimately do with them. 

Kim1965

Altior said:

I keep reading on these types of threads that markets will bounce back, don't worry about it, we've seen it all before et al.

But the kind of global debasement of fiat currency that lockdown hysteria created, I don't think we have seen before. We can look to Japan, who historically have done mass QE in isolation, and there it took three decades to recover.

I don't think anyone knows what damage and scarring this has done, or at least, if they do they don't want to talk about it. The market valuations at the end of 2019 are my benchmark, as with two years of covid neuroticism and now war disrupting commodities, I don't feel anyone can say we are in a stronger position now, than at 2019. 

We have massively pumped up asset prices, embedded inflation, climate / net zero hysteria is unrelenting, and no prospect of significant growth in the major western economies. I feel mirroring Japan is actually most likely, as in desperation politicians will always reach for the money printer. And as we have seen in the UK, culturally, young westerners with access to social media and 24 hr brainwashing 'news' feeds have absolutely no stomach to face up to the reality of the situation, and even live to current means, never mind start to pay off what has been added to the vast debt mountains. Delightfully exhibited by mass panic because mortgage interest rates have finally threatened to normalise after several years of unsustainable cheap borrowing.

So while markets could well spring back as they have done many many times through history, I feel it is quite dangerous to consider that as a certainty this time around. 
 

Im in a similar position to the op, throwing as much as I can in, and watching the pot drop. 
 There are a number of worrying threads and posters predicting a scenario much worse than the 2008 crash. 
 Out of interest how are you approaching this meltdown and what is your investment strategy /damage limitation? After a lifetime of working  im rather hoping the market will bounce back. 

RogerPensionGuy

Reference these DC pots going down or up.

I'm aware pensions and investments are generally long-term.

For the current downturn in stockmarkets I just look back at the value of my investments in the middle of December 2021 verses the value today and minus all contributions in to the investments from an employer or myself. 

My various investments are down about 10 to 14% on average and I feel lucky enough, others I know have seen 17 to 23% reductions over their various investment vehicles.

As a previous poster has mentioned, stockmarkets history shows they always recover over different tine periods but, we have just gone through 11/12 years of printing free and cheap money and now various other factors in play, so this cycle and stockmarkets recovery may be different from what some people expect, time will tell.

Workerdrone

RogerPensionGuy said:

Reference these DC pots going down or up.

I'm aware pensions and investments are generally long-term.

For the current downturn in stockmarkets I just look back at the value of my investments in the middle of December 2021 verses the value today and minus all contributions in to the investments from an employer or myself. 

My various investments are down about 10 to 14% on average and I feel lucky enough, others I know have seen 17 to 23% reductions over their various investment vehicles.

As a previous poster has mentioned, stockmarkets history shows they always recover over different tine periods but, we have just gone through 11/12 years of printing free and cheap money and now various other factors in play, so this cycle and stockmarkets recovery may be different from what some people expect, time will tell.

I was expecting the QE from the GFE to have an effect when I took out a 10 year fixed mortgage back in 2016. Recognising such things tend to come after a lag. The second batch of QE from COVID seems to have pushed things quite hard.

Malthusian

Altior said:

I keep reading on these types of threads that markets will bounce back, don't worry about it, we've seen it all before et al.

But the kind of global debasement of fiat currency that lockdown hysteria created, I don't think we have seen before. We can look to Japan, who historically have done mass QE in isolation, and there it took three decades to recover.

The four most dangerous words in finance are "this time it's different". In 2008 experts said that this crash was different because we hadn't seen the entire global credit market seize up before, and claimed that cash was king and you should sell everything. In 2020 experts said that this crash was different because we hadn't seen a deadly global pandemic since Spanish flu, and that we'd all be under lockdown for years and consequently global trade wouldn't return to normal for a decade if ever. 
If politicians keep turning on the money printers (there is no evidence that anyone can consistently beat the market by predicting what politicians will do), this is the worst possible time to dump investments. Anyone invested in real assets will better off at the expense of people hoarding cash or on fixed incomes. Those in debt will also benefit as the real value of their debt will go down.
Even if they don't, globally diversified investment portfolios will still beat cash if held for the long term. 

And as we have seen in the UK, culturally, young westerners with access to social media and 24 hr brainwashing 'news' feeds have absolutely no stomach to face up to the reality of the situation, and even live to current means, never mind start to pay off what has been added to the vast debt mountains. Delightfully exhibited by mass panic because mortgage interest rates have finally threatened to normalise after several years of unsustainable cheap borrowing.

Young westerners are getting on with it and paying their mortgages, tightening their belts if necessary. The only "mass panic" visible is in the bond markets and in newspapers, both of which are run by the late middle aged.

Rattusnorvegicus

carrspaints said:

I know this is likely a crystal ball question, but how do others here feel markets and pensions will play out over the next year or two?  I am sure many who know little about pensions, and how bad times affect them, are likely thinking the same thing. Is what we are seeing today unprecedented in recent decades? How did 9/11 or the 2008/9 crisis affect pensions?

From my point of view, i'm seeing opportunities of a lifetime in certain sectors coming soon. Obviously i cant advocate for something specific here, but needless to say in general buying at the bottom or close to the bottom of bear markets usually works out well over a multi-decade timescale.

The value of investments can go down as well as down as the quotation goes.But generally this isnt likely to be as bad as 1974 where the ftse dropped 74% thanks to barber and friends, or 87% in the 1929-1933 crash.

The FTSE is down 6.34% year to date....so as down years go thats pretty nice if your looking to reduce losses, or very bad if like me your looking for a good 50%+ crash to buy lots of cheap stuff at the bottom.

I get really greedy, the more fearful others get. So i look for an increase in posts of people worrying as an indicator for capitulation and a potential market bottom. I look at the potential downside if i'm early on finding the bottom, but i also look at the percentage growth to reach the next all time high.£10 reduced by 50% is £5...but £5 is a 100% increase to get back to £10. Which is why buying lots at £5 for example tends to work out really well.

Altior

Kim1965 said:

Altior said:

I keep reading on these types of threads that markets will bounce back, don't worry about it, we've seen it all before et al.

But the kind of global debasement of fiat currency that lockdown hysteria created, I don't think we have seen before. We can look to Japan, who historically have done mass QE in isolation, and there it took three decades to recover.

I don't think anyone knows what damage and scarring this has done, or at least, if they do they don't want to talk about it. The market valuations at the end of 2019 are my benchmark, as with two years of covid neuroticism and now war disrupting commodities, I don't feel anyone can say we are in a stronger position now, than at 2019. 

We have massively pumped up asset prices, embedded inflation, climate / net zero hysteria is unrelenting, and no prospect of significant growth in the major western economies. I feel mirroring Japan is actually most likely, as in desperation politicians will always reach for the money printer. And as we have seen in the UK, culturally, young westerners with access to social media and 24 hr brainwashing 'news' feeds have absolutely no stomach to face up to the reality of the situation, and even live to current means, never mind start to pay off what has been added to the vast debt mountains. Delightfully exhibited by mass panic because mortgage interest rates have finally threatened to normalise after several years of unsustainable cheap borrowing.

So while markets could well spring back as they have done many many times through history, I feel it is quite dangerous to consider that as a certainty this time around. 
 

Im in a similar position to the op, throwing as much as I can in, and watching the pot drop. 
 There are a number of worrying threads and posters predicting a scenario much worse than the 2008 crash. 
 Out of interest how are you approaching this meltdown and what is your investment strategy /damage limitation? After a lifetime of working  im rather hoping the market will bounce back. 

Fortunately I'm still at the accumulation stage. What one might call a sweet spot as generally sorted month to month, and able to 'save' half of my regular income. Mixing this with pension contributions via SIPP and SS, S&S ISA, general investing and cash.

I haven't necessarily got a unique approach, however it's a rather contrarian view on these boards I suspect, I have a domestic bias. I favour value/quality in the existing profile, and try to have the US as a smaller allocation than it would be on the standard percentage. Everyone knows that the UK isn't in a good place but that means valuations are appealing on certain measures such as cape. Looking underneath the noise and the lid, there are plenty of businesses that make strong earnings and aren't reliant on continuing cheap debt, or valued on future growth.

The fact that I don't believe that it's certain that global markets will hit historic highs again in the near future doesn't mean that I'm not advocating for investing. What happened during the lockdown frenzy was an experiment though, and as per my post, the true long term outcomes of this are not known. I feel it's dangerous to give the impression that there is zero risk of a full recovery not happening, at least within a generation.