Pension Investments

poseidon1

MIZZ12 said:

poseidon1 said:

MIZZ12 said:

Hi, I have a pension pot that is heavily invested in equities , a chunk of which is US (c30% US- centric, 40% Global, 12% Diversified Asset, 17% Global Bonds) and this has taken a real hit in the last month or so thanks to Mr T's shenanigans!  My question is, (and yes, I am panicking!) do I leave it invested as it is and ride things out, or do I switch more of my current holding into Bonds - but then this means I am in effect crystallising losses I guess?  Not sure what to do or how I can find out.  I know that no-one can say what the markets will do, but I just wanted to get a sense from some financially savvy people what would make most financial sense in this situation.  Thank you !

OP the people trying to give you helpful or reassuring comment, need context and  background here.

In a previous post back in October 2023 you indicated your bank employer sponsored  DC pension pot was worth £480,000.

What is it worth now? Has it actually diminished compared to the October 2023 baseline value, ie would you actually be realising losses or merely diminishing the quantum of overall  gains that hopefully  accrued  since 2023?

You were 53 in 2023. What is your target retirement date, and do you plan to fully or partly retire at that point? 

Back in 2023 there was a suggestion that your pension pot may have lifestyling aspects which (unless you intervened) would be gradually moving you across to less volatile investments. Is this still the case, or did you turn off lifestyling?

Fill in the above gaps in your narrative and perhaps the various respondents can provide more targeted comments.

Thanks poseidon1, you are absolutely right, some context would help but I just wanted an initial reaction before I added more context and thanks for referencing my previous posts.  So my pension pot had grown to c600k although this is shrinking by the day - this growth has also come from myself maxing out on contributions plus generous employer contributions.  I haven't decided on a retirement date but in any case I would choose to stay invested for as long as possible.  I did move my investments from the lifestyling into a Freechoice option which means they will not automatically move to less volatile investments; it's up to me to decide which funds to invest in and hence I have gone with those listed in my original comment (although I have chopped and changed a bit in the interim).  I hope this helps give some additional context and thanks for your comments.

Helpful response which hopeful will assist others with their opinions. 

I am not in your situation, being around 10 or more years older, and retired in 2015 but left my Sipp to accumulate as a 'fall back' income source and as yet to be accessed  ( I have other investment sources)

 I had a specific  dollar denominated S & P 500 etf which was a very short term purchase to reap the small boost to the index which a Trump election win was likely to deliver.  It gain 13% in the period September to February at which point I sold, and do  not anticipate returning to that index this year unless there is a savage correction in excess of 25%.

However, there remains peripheral exposure to US stocks via long term  UK global Investment Trusts  I have held and will continue to hold despite inherent volatility. That said there is a heavy weighting towards bonds both domestically and internationally way in excess of your own weighting and about 25% in interest bearing cash of which 15% will eventually  be redeployed as I watch the 'lay of the land'  in the months to come. 

 You have far more time and have indicated you want to remain invested for as long as possible.

 However given your fund split but my advanced age and lower appetite for risk, I would be inclined to dump the entire 30%  US centric fund in favour of your remaining funds. This could mean increasing your global allocation although with  potential recession in the US that  would likely infect the world economies ( trade wars etc ) and drag that fund down, especially since that fund is likely to have a US component.

 Accordingly, depending on the nature of your bond fund ( high yield corporates,  international government, strategic, short duration etc  - they come in a variety of flavours!) I might be inclined to boost the bond fund and perhaps leave the rest in cash or near cash , as long as interest is being earned in the interim.

Regrettably that then leaves you with the problem of timing when and how much of your lower risk exposure should be redeployed  back to more volatile growth markets in future especially since your continued annual contributions will also need to find a 'home'. I personally would be loathed to make new contributions and witness immediate losses thereon - most disheartening.

However, having decided to switch off the lifestyling functionality in favour of your own judgement call, this was always a quandary you were likely to face, so much might depend on how far on the horizon retirement may transpire to be, and to what extent your eventual  drawdown from your pension pot  ( and how you structure that ) is crucial in enjoying that retirement.

We are all different, and as others will attest there is no one size to fit all, we can only relay our perspectives to the extent we see a degree of commonality with yours. 

Bostonerimus1

MIZZ12 said:

poseidon1 said:

MIZZ12 said:

Hi, I have a pension pot that is heavily invested in equities , a chunk of which is US (c30% US- centric, 40% Global, 12% Diversified Asset, 17% Global Bonds) and this has taken a real hit in the last month or so thanks to Mr T's shenanigans!  My question is, (and yes, I am panicking!) do I leave it invested as it is and ride things out, or do I switch more of my current holding into Bonds - but then this means I am in effect crystallising losses I guess?  Not sure what to do or how I can find out.  I know that no-one can say what the markets will do, but I just wanted to get a sense from some financially savvy people what would make most financial sense in this situation.  Thank you !

OP the people trying to give you helpful or reassuring comment, need context and  background here.

In a previous post back in October 2023 you indicated your bank employer sponsored  DC pension pot was worth £480,000.

What is it worth now? Has it actually diminished compared to the October 2023 baseline value, ie would you actually be realising losses or merely diminishing the quantum of overall  gains that hopefully  accrued  since 2023?

You were 53 in 2023. What is your target retirement date, and do you plan to fully or partly retire at that point? 

Back in 2023 there was a suggestion that your pension pot may have lifestyling aspects which (unless you intervened) would be gradually moving you across to less volatile investments. Is this still the case, or did you turn off lifestyling?

Fill in the above gaps in your narrative and perhaps the various respondents can provide more targeted comments.

Thanks poseidon1, you are absolutely right, some context would help but I just wanted an initial reaction before I added more context and thanks for referencing my previous posts.  So my pension pot had grown to c600k although this is shrinking by the day - this growth has also come from myself maxing out on contributions plus generous employer contributions.  I haven't decided on a retirement date but in any case I would choose to stay invested for as long as possible.  I did move my investments from the lifestyling into a Freechoice option which means they will not automatically move to less volatile investments; it's up to me to decide which funds to invest in and hence I have gone with those listed in my original comment (although I have chopped and changed a bit in the interim).  I hope this helps give some additional context and thanks for your comments.

When do you plan to retire and how much more than your estimated drawdown is your 600k?