advice for falling market

Eyeful

John Bogle who started the Vanguard, is on record that he told an airline pilot who began a pension with them something along the lines of:-
" Don't bother to look at the statements until the day you retire. Then sit down before you open that last statement.
You will get a happy surprise at how wealthy you have become",

Albermarle

dunstonh said:

boingy said:

I do sometimes reflect on how knowledge is not always power. Being able to track our long term investments minute by minutes is not always healthy.

Back in the day you'd put money into your works or personal pension without any real visibility on how it was invested or even how much you were paying in costs, because the companies you dealt with were experts at obfuscating the details. You'd get a statement every year and that was about it. You didn't worry about day to day fluctuations because you couldn't!  I'm not suggesting those days were better but long-term investments are best ignored except for a review every 6 or 12 months. Of course, I can't resist looking every day too. 

I had someone who had invested for decades approach me after the 2018 crash saying that his value had gone down and it never had before and what was going wrong.      He had invested through dot.com, 911, American accountancy scandal, credit crunch and the 2015/16 falls but he had never seen them.    This time, it was a combination of the EU directive that required quarterly statements instead of annual statements.(2015/16 drop and recovery happened between statement dates) and that he never looked at the earlier ones as it was just a paper statement that he never took any interest in.   

Nowadays, you get people looking at these things far too frequently and as a result many are actually investing lower than their risk profile of the past because they cannot handle the day to day volatility  that they can now see but used to have when they were not looking at it.  As a result, their returns are lower over the long term.

In addition to this is the temptation to fiddle about with your investments/pension pots, which can bring positive or negative outcomes.

I had a contracted out of SERPS DC pot which was for maybe 25 years invested in 100% equities and I got one statement a year. As I started to take more interest, maybe about 15 years ago,  I reduced the equity content, mainly US, as I thought the US markets were too high.
Not a good decision....

I think since then my knowledge has got better, and I made some better decisions about my last employer pension, which was lifestyled and used SL Absolute Return fund which is a real Turkey.
So I got out of that, and got out of the bond fund before that crashed.

So swings and roundabouts when getting more involved I guess. 

eskbanker

Eyeful said:

John Bogle who started the Vanguard, is on record that he told an airline pilot who began a pension with them something along the lines of:-
" Don't bother to look at the statements until the day you retire. Then sit down before you open that last statement.
You will get a happy surprise at how wealthy you have become",

It might be worth locating the actual quote, with its full context, as it's undoubtedly sensible not to tinker regularly (presumably the point being made) but conversely it's typically prudent to consider at least some derisking prior to requiring access to the funds....

Hoenir

eskbanker said:

Eyeful said:

John Bogle who started the Vanguard, is on record that he told an airline pilot who began a pension with them something along the lines of:-
" Don't bother to look at the statements until the day you retire. Then sit down before you open that last statement.
You will get a happy surprise at how wealthy you have become",

It might be worth locating the actual quote, with its full context, as it's undoubtedly sensible not to tinker regularly (presumably the point being made) but conversely it's typically prudent to consider at least some derisking prior to requiring access to the funds....

If you were invested in say Vanguard's (USA)  60/40  then the quote makes sense. If you decided to self manage your own portfolio. Then a very different matter. Everybody needs a plan. 

Sg28

Hoenir said:

eskbanker said:

Eyeful said:

John Bogle who started the Vanguard, is on record that he told an airline pilot who began a pension with them something along the lines of:-
" Don't bother to look at the statements until the day you retire. Then sit down before you open that last statement.
You will get a happy surprise at how wealthy you have become",

It might be worth locating the actual quote, with its full context, as it's undoubtedly sensible not to tinker regularly (presumably the point being made) but conversely it's typically prudent to consider at least some derisking prior to requiring access to the funds....

If you were invested in say Vanguard's (USA)  60/40  then the quote makes sense. If you decided to self manage your own portfolio. Then a very different matter. Everybody needs a plan. 

As the pilot had just started investing its more likey he would be in one of the higher risk funds.

The whole idea of the VLS range is that its easy to take steps down the risk ladder the closer you get to retirement.

Hoenir

Sg28 said:

Hoenir said:

eskbanker said:

Eyeful said:

John Bogle who started the Vanguard, is on record that he told an airline pilot who began a pension with them something along the lines of:-
" Don't bother to look at the statements until the day you retire. Then sit down before you open that last statement.
You will get a happy surprise at how wealthy you have become",

It might be worth locating the actual quote, with its full context, as it's undoubtedly sensible not to tinker regularly (presumably the point being made) but conversely it's typically prudent to consider at least some derisking prior to requiring access to the funds....

If you were invested in say Vanguard's (USA)  60/40  then the quote makes sense. If you decided to self manage your own portfolio. Then a very different matter. Everybody needs a plan. 

As the pilot had just started investing its more likey he would be in one of the higher risk funds.

This is how myths and legends are born on social media....... 

eskbanker

Hoenir said:

eskbanker said:

Eyeful said:

John Bogle who started the Vanguard, is on record that he told an airline pilot who began a pension with them something along the lines of:-
" Don't bother to look at the statements until the day you retire. Then sit down before you open that last statement.
You will get a happy surprise at how wealthy you have become",

It might be worth locating the actual quote, with its full context, as it's undoubtedly sensible not to tinker regularly (presumably the point being made) but conversely it's typically prudent to consider at least some derisking prior to requiring access to the funds....

If you were invested in say Vanguard's (USA)  60/40  then the quote makes sense. If you decided to self manage your own portfolio. Then a very different matter. Everybody needs a plan. 

Even with 60/40 there's still potentially significant sequence of returns risk at play, but to me it's important to recognise the concept of the accumulation phase being different from the decumulation one, and it's unlikely to be advisable to literally start planning the latter on the day of retirement, so (like those who cling to the pronouncements of Warren Buffett) it can be dangerous to simply cite (approximations of) quotations that can be misleading if taken at face value when separated from their context.