Transferring pension pots

SolarSimon

Potentially stupid question. 

My pension pot is currently up about 10%.

does it make sense to transfer that pot into another one, effectively cashing in on that upturn before it dips again?

as it’s really simple to move pots about, you could effectively move when you feel it’s at a peak and stick when it’s dropping.  

Kind of banking the wind as you go.  

I’m pretty sure I’m missing something obvious with this idea. 

tacpot12

Yes, you are missing the obvious that when you transfer a 'pot' into another one, you have to buy something with the money. If you just leave it as cash, you will quickly find that inflation eats it away until there is nothing left. Whatever you buy with the money will be more expensive because the market is up by 10% or whatever level you decide is enough to cash in at. 

Marcon

SolarSimon said:

Potentially stupid question. 

My pension pot is currently up about 10%.

does it make sense to transfer that pot into another one, effectively cashing in on that upturn before it dips again?

as it’s really simple to move pots about, you could effectively move when you feel it’s at a peak and stick when it’s dropping.  

Kind of banking the wind as you go.  

I’m pretty sure I’m missing something obvious with this idea. 

You could 'bank' the win by transferring into less volatile fund choices in your current pension - but then:

tacpot12 said:

If you just leave it as cash, you will quickly find that inflation eats it away until there is nothing left. 

DullGreyGuy

SolarSimon said:

Potentially stupid question. 

My pension pot is currently up about 10%.

does it make sense to transfer that pot into another one, effectively cashing in on that upturn before it dips again?

as it’s really simple to move pots about, you could effectively move when you feel it’s at a peak and stick when it’s dropping.  

Kind of banking the wind as you go.  

I’m pretty sure I’m missing something obvious with this idea. 

Up 10% in what timeframe? In principle you've potentially just kept up with inflation. 

You can put it in a lower risk pot so mitigate the risk of big swings but increase the risk it returns below inflation and so in principle is depreciating in relative terms. 

MallyGirl

You also would probably not be transferring the pot, you would just be changing the investment (s) used for the pot

El_Torro

Time in the market is more important than timing the market. Most of the people who try to time the market get it wrong, including so called experts.

handful

SolarSimon said:

Potentially stupid question. 

My pension pot is currently up about 10%.

does it make sense to transfer that pot into another one, effectively cashing in on that upturn before it dips again?

as it’s really simple to move pots about, you could effectively move when you feel it’s at a peak and stick when it’s dropping.  

Kind of banking the wind as you go.  

I’m pretty sure I’m missing something obvious with this idea. 

Up 10% over what period? It's a big mistake just choosing the period that there has been growth. Since October last year most people should have seen a significant growth but if you extend that to 2 years it would probably show considerably less although that would obviously depend greatly on the investments!