advice for falling market

RandomUser004

Firstly I don't know much  about stocks, and I don't monitor the markets closely, so this is a no-brainer question please bear with me.

I have an overall savings pot of  @ 550k invested largely in the Vanguard life strategy 40% equity fund. I chose vlVanguard because it's supposed to be a relatively safe haven for inexperienced investors like myself.

I have a year or two before retirement. I also have some cash savings but the bulk of my retirement fund is in stocks and shares.

With the global mayhem at the moment my fund is falling, or at least the equity part is. 

I don't want to lose too much from my retirement fund.

So, would you:

1.  sell now and put the money into cash or bonds? 

2 grit your teeth, ride out the turbulence and stick with the vanguard funds? 

3. something else?

I realised no one has a crystal ball... Just seeking thoughts from people more experienced than myself in this area.

Thanks in advance! ☺️

redlightbulb

I am a rookie compared to most on here but no way sell as you would have crystalised the losses.  Ride it out.

RandomUser004

Sorry, I meant "advice for falling market". I can't seem to edit the post :-(

eskbanker

RandomUser004 said:

I have a year or two before retirement. I also have some cash savings but the bulk of my retirement fund is in stocks and shares.

It's generally prudent to derisk your portfolio as you approach the time it's needed, but only to the extent you'll be drawing it down, i.e. you presumably won't be needing access to much of that £550K in two years time, but only a subset of it each year?  Keeping a 'float' of a few years' money in low-risk options, including cash, is definitely sensible, but no need to sell the lot!

enthusiasticsaver

I have had the same question from my brother today panicking about his portfolio plummeting (not in Vanguard). If you sell you crystallise losses. The stock markets did this in 2020 but had recovered 6 months later. At the moment markets are spooked by the uncertainty around Trumps protectionist policies and fear of global recession and everyone knows when America sneezes the world catches a cold as their economy is so large. My policy is to hold a large cash emergency fund and not worry too much about market volatility for now. 

lisyloo

Hold.
there will be negotiations, solutions etc. and things will settle down.

you should de-risk in the run up to retirement,
I have 2 pots, once long term and higher risk, one lower risk to make sure I don’t hit this problem in the few years after retirement so if there’s short term drop I can take from the lower risk pot.
you can have as many “pots” as you like with different risk levels.

personally I would not derisk right now.

Hoenir

RandomUser004 said:

I have an overall savings pot of  @ 550k invested largely in the Vanguard life strategy 40% equity fund. I chose vlVanguard because it's supposed to be a relatively safe haven for inexperienced investors like myself.

Would appear that you already defensively positioned. I'd do nothing and ride out the storm by continuing to do as you have been. 

Ivkoto

RandomUser004 said:

Firstly I don't know much  about stocks, and I don't monitor the markets closely, so this is a no-brainer question please bear with me.

I have an overall savings pot of  @ 550k invested largely in the Vanguard life strategy 40% equity fund. I chose vlVanguard because it's supposed to be a relatively safe haven for inexperienced investors like myself.

I have a year or two before retirement. I also have some cash savings but the bulk of my retirement fund is in stocks and shares.

With the global mayhem at the moment my fund is falling, or at least the equity part is. 

I don't want to lose too much from my retirement fund.

So, would you:

1.  sell now and put the money into cash or bonds? 

2 grit your teeth, ride out the turbulence and stick with the vanguard funds? 

3. something else?

I realised no one has a crystal ball... Just seeking thoughts from people more experienced than myself in this area.

Thanks in advance! ☺️

The Vanguard Life strategy 40 is de risked enough in my opinion. If it was me, I would sell the whole portfolio and buy VLS60 ( replacing 20% bonds for 20% equities) at discount price right now. I suppose your money will be invested for many years and depending on how much you need a year, it may not last for long with so small part in equities.

Albermarle

Firstly I don't know much  about stocks, and I don't monitor the markets closely, so this is a no-brainer question please bear with me.

I have an overall savings pot of  @ 550k invested largely in the Vanguard life strategy 40% equity fund. I chose vlVanguard because it's supposed to be a relatively safe haven for inexperienced investors like myself.

I have a year or two before retirement. I also have some cash savings but the bulk of my retirement fund is in stocks and shares

As said VLS40 is probably not a bad place to be currently, but I think with over half a Million Pounds invested, I would work to improve my knowledge, or maybe employ an IFA.

Retirement/withdrawal strategies ( when you retire) take a bit more knowledge than when just building up your pot, to maximise tax efficiency and to not take too much drawdown income ( so the pot does not run out)
Or if you were thinking of buying an annuity, you should be derisking further now for example.

jaypers

Sit tight. World events have always impacted and will always impact the world’s stock markets. Think back to five years ago and the COVID-19 crisis, or to 2022 when Russia invaded Ukraine. 

Markets recovered after both events, and investors who accepted that market volatility is part of investing have been rewarded.

Eyeful

It is always scary for a newbie when they experience their first large market fall.
If you do not actually need the money, then there is no point in selling now.
You are at the moment defensively positioned as you have 60% in bonds. 

During my life, at times like this,. I see the talking heads on TV and in the news come out and say 
"but this time its different", but it never is.

You have a Global Multi-Asset Fund which is defensively positioned. 
As long as you have enough money to cover your needs, don't worry. I hope you have a happy retirement.

As you have a VLS fund, I suggest you watch this James Shack video on You Tube

Vanguard Lifestrategy Funds Explained | The only fund you will ever need? (Investing for beginners)