I'm in a panic about retirement, pensions and investments - talked to SJP and my bank

Albermarle

Dulce-ridentem said:

@qyburn that's the effective rate we've achieved over the period - the equivalent rate had it been the same throughout and all  interest reinvested.  Actual rate has been all over the place, between -8.7% and +20% in the past 5 years. It's just our bank's "dynamic" portfolio (level of risk 4/5 - high risk balanced by the large cash holding).

I am guessing it is HSBC Global strategy Dynamic ( or similar) and 50% over 8 years is about what you would expect for a medium high risk multi asset fund.
If you had gone for a less risky fund your returns would have been less.

atush

I wouldnt touch SJP with a bargepole

Pat38493

atush said:

I wouldnt touch SJP with a bargepole

Probably they would grab the pole and try to charge you to get it back LOL

Dulce-ridentem

@Albermarle you're quite right! In fact it did 7.6% for 2015-2021 and 3.7% for 2021-present.

Unfortunately we put in a second large tranche in 2021 :-( and the question is whether they will do better going forward.

I did the calcs for the last 5 years of the funds SJP showed us and they are about 3.5% pa compounded since 2018, net of fees.

My two employee share schemes have done 14% pa (compounded) and 11% pa (compounded) respectively over periods of 17 years and 20 years respectively, allowing for the income tax. Hence I have considerable potential CGT but even with that it's a very good return - the big question is whether to stick with them...  One is tech, one is FS.

Malthusian

Dulce-ridentem said:

My two employee share schemes have done 14% pa (compounded) and 11% pa (compounded) respectively over periods of 17 years and 20 years respectively, allowing for the income tax. Hence I have considerable potential CGT but even with that it's a very good return - the big question is whether to stick with them...  One is tech, one is FS.

If you had the equivalent amount sitting in cash right now, would you invest it all in those two companies?
It is normal for individual shares to be up 14%pa or 11%pa. It is also normal for them to be at minus 100%, or any figure in between. 

Sunnylifeover50plan

I worked for a bank and the share save scheme delivered excellent results for many years. I always cashed mine in and bought a car or did something else with it. Many accumulated year after year and kept going with a view to having a great retirement nest egg. The rest is history - yes make money but don't forget to diversify.

Dulce-ridentem

@Sunnylifeover50plan @Malthusian - point taken :-) I used to have HBOS and Northern Rock shares, too...

JohnWinder

Someone could have posted a price chart of Apple to show how good it is to hold just one stock. That and the Natwest chart illustrate the huge risk of not being diversified, if you think of risk as variation of returns - the highs and the lows. Return and risk are linked, and you can’t get the Apple returns without taking the risk of holding just Apple; but it doesn’t follow that the risk will deliver the returns, as Natwest clearly shows. Sadly, more risk doesn’t ensure higher returns.
So the answer is to diversify, because if you don’t have to take risk (like holding just Apple or Natwest) no one is going to compensate you for taking risk you don’t need to take. It’s uncompensated risk whenever you can diversify it away without taking any more risk. Single shares are a bad deal unless you like gambling.

MallyGirl

and keeping single shares in the company that pays your salary is the double whammy if it all goes wrong. I have colleagues that have held on to their sharesave shares for years but I always sell mine pretty quickly. If I was going to buy a single share they are not the company I would choose so it makes no sense to me to hold on to them.

Dulce-ridentem

Everyone is right, although I have to be pleased that I have two sharesave schemes that have each grown over 100K  - 6 to10 times the initial investments. So risking those smallish initial amounts (ok, 15% of salary in those days) has delivered til now. I'm just working on the best approach to move these, given CGT... which I shall have to pay.

I'm talking to other IFAs. Thanks again, all, for (as ever) sound advice. Sometimes I need people to tell me what I already know...