De-risking

saucer

artyboy said:

GazzaBloom said:

cfw1994 said:

Sarahspangles said:

AJ Bell now pay 2.5% on less than £10k in cash rising to 3.25% on over £100k (after the latest interest rate change).

Over a year the Royal London STMM has returned 5.2% though presumably that will eventually slow.

I think you're right....not too many years ago (3?), most cash/MMF were languishing around 0-0.5% !

Prior to the era of QE post 2008, an interest rate of 5-6% was typical, higher in some decades prior.

I can't see rates going back to the 0.somethings anytime soon, if ever again.

Current geopolitics could have us back into double digits before you know it...

We’re in a similar situation to lots on here. I’m 58 and we’re both planning on retiring next year. We in the very fortunate position of having good DB pensions and are due full state pensions. We also sold a BTL flat a couple of years so have been drip feeding cash into SIPPs and ISAs. 

I think what has unsettled me and made me run to safety is the scary administration across the pond. Who knows what troubles they are going to bring. So much so that we’re almost completely now in cash/STMM funds. 

We could afford to get back into investment funds and I’m considering a global tracker e.g. HSBC MSCI with the bit of our private funds we could afford to take risks with. The downside is it focuses us even more on the geopolitical issues that we are all facing. Maybe leaving everything in funds that are so far outpacing inflation is the smarter (if less adventurous) move. Who knows.

SVaz

I wonder if there are any funds focusing on Defence stocks?   🤔

pterri

SVaz said:

I wonder if there are any funds focusing on Defence stocks?   🤔

Trump proof your portfolio! (I know we shouldn’t react to every headline but does make me nervous, my DB kicks in in three years so not as nervous as some may be) 

artyboy

...and this is why ethical funds typically underperform 

Hoenir

Sarahspangles said:

AJ Bell now pay 2.5% on less than £10k in cash rising to 3.25% on over £100k (after the latest interest rate change).

Over a year the Royal London STMM has returned 5.2% though presumably that will eventually slow.

Yields are always based on historic data , i.e. actual payouts, not forecast. If interest rates have been falling, as is the case, then future payout's will be lower and correspondingly the real yield as at the date of purchase. 

Sarahspangles

Hoenir said:

Sarahspangles said:

AJ Bell now pay 2.5% on less than £10k in cash rising to 3.25% on over £100k (after the latest interest rate change).

Over a year the Royal London STMM has returned 5.2% though presumably that will eventually slow.

Yields are always based on historic data , i.e. actual payouts, not forecast. If interest rates have been falling, as is the case, then future payout's will be lower and correspondingly the real yield as at the date of purchase. 

Yes, though I’ve been surprised that the initial impact of interest rate changes is not yet showing in the graphs.

Roger175

SVaz said:

I wonder if there are any funds focusing on Defence stocks?   🤔

Well, my BAE shares are now up 394% which helps!

saucer

Roger175 said:

SVaz said:

I wonder if there are any funds focusing on Defence stocks?   🤔

Well, my BAE shares are now up 394% which helps!

For very depressing reasons though

Roger175

saucer said:

Roger175 said:

SVaz said:

I wonder if there are any funds focusing on Defence stocks?   🤔

Well, my BAE shares are now up 394% which helps!

For very depressing reasons though

Indeed, and fully accepted. I hold a large basket of shares and do sometimes struggle with the ethical side of things, then again, anyone holding a UK equity fund will also be holding them, they just don't see the name so prominently.

OldScientist

Sarahspangles said:

Hoenir said:

Sarahspangles said:

AJ Bell now pay 2.5% on less than £10k in cash rising to 3.25% on over £100k (after the latest interest rate change).

Over a year the Royal London STMM has returned 5.2% though presumably that will eventually slow.

Yields are always based on historic data , i.e. actual payouts, not forecast. If interest rates have been falling, as is the case, then future payout's will be lower and correspondingly the real yield as at the date of purchase. 

Yes, though I’ve been surprised that the initial impact of interest rate changes is not yet showing in the graphs.

I suspect that the relatively small changes in gradient are not discernible on a graph (and there is a lag because some of the securities held in the Rl fund have maturities of quite a few months).

The returns over the last year might have been 5.2%, but over six months this is 2.42% (implying a compounded annual return of 4.9%), over 3 months it is 1.17% implying an annual return of 4.8%, while the 0.35% return over the last month implies an annual return of 4.3%. So, sadly, the gradient is definitely decreasing.