Anyone exiting funds for guaranteed cash?

cloud_dog

TBH honest and without doing all the back checking research (finger in the air time), If I could guarantee 7% I would be very happy with that.

masonic

Sea_Shell said:

So, asking the question in another way...

At what interest rate would you be tempted away from a fund that is just "ticking" along ?   (ISA status and tax aside)

Seems like a false dichotomy to me, the answer is most likely to be a better investment rather than parking the capital in a savings account. The rate of inflation is also very relevant to this thinking.

InvesterJones

Sea_Shell said:

So, asking the question in another way...

At what interest rate would you be tempted away from a fund that is just "ticking" along ?   (ISA status and tax aside)

Assuming circumstances haven't changed, then the reason for picking equites vs cash would still be the same, so it's hard to think of any interest that would cause you to change strategy - at best if you were thinking to time the market then you might consider a cash rate of inflation +some to be worthwhile if you believe equities were going to fall in the future, but since interest rates are much lower than inflation than they have been that'd make the argument for less cash holdings than previously.

GeoffTF

Sea_Shell said:

So, asking the question in another way...

At what interest rate would you be tempted away from a fund that is just "ticking" along ?   (ISA status and tax aside)

It depends on your risk tolerance and your ability to absorb risk. Mr Market has about 60% bonds and 40% equities. He clearly believes that bonds are more tempting than equities. People who post on boards like this tend to have a higher equity percentage. Some of us are rich men who can afford to take a big hit. Others are less risk averse than the market, do not understand the risks, or do not want to understand them.

Sea_Shell

Looking at our current asset allocation, moving ~£8k from HSBC fund to Cash, would re-balance our holdings to 10% cash, which is where we want to be.  (60% equities, 30% 'other')

This will also then be available to bolster our DD, which we are limiting to DHs PA at the moment.   It will then form another step on our savings bond ladder, alongside our easy access emergency cash.

So in the current market of higher interest rates it does (seem) to be a good a time as any to pull this out.

Will probably do it in 4 tranches of £2k, so we can review each month.


It's funny when you think "when will you need this money?", as we may not need to touch our ISAs at all, if you look at the bigger picture in £££ terms (rather than just 'where' the money is), but we may need bits of it in the near future IYSWIM.    

eskbanker

Sea_Shell said:

Looking at our current asset allocation, moving ~£8k from HSBC fund to Cash, would re-balance our holdings to 10% cash, which is where we want to be.  (60% equities, 30% 'other')  

Rebalancing to achieve a target allocation seems a more valid reason to sell assets than doing so simply because savings rates have increased.

Sea_Shell

eskbanker said:

Sea_Shell said:

Looking at our current asset allocation, moving ~£8k from HSBC fund to Cash, would re-balance our holdings to 10% cash, which is where we want to be.  (60% equities, 30% 'other')  

Rebalancing to achieve a target allocation seems a more valid reason to sell assets than doing so simply because savings rates have increased.

But the increase in savings rates may have 'focused the mind' somewhat!! 

Without which, we may have just 'let it ride'. 

enthusiasticsaver

I wouldn’t be tempted to move into cash and certainly not at 5% when inflation is 10% but I hear you on the sluggish fund prices. We haven’t lost money on ours but they are down from 2 years ago. we are drawing on it anyway but to live off rather than move to cash. 

jaypers

A balance/spread across both is still the best approach IMHO. Equities and Funds in general will pick up again but it’s anyone’s guess how long it will take before there is sustained confidence in the markets again. 

hewhohuntselves

What about money market funds - are these what people are thinking about when they sometimes refer to transferring to cash (for example in a SIPP where cash can't be taken out before a certain age).