AVC funds Cash or Equities?

Maria2512

Hi all,

I have money invested in AVCs. I was in the Pru S3 equities fund and transferred it all to the cash fund a few weeks ago. The rate I got was 4.06. The fund yesterday dropped to 3.74. 

I am tempted to transfer back to equities and hope that the rate increases. 

My dilemma is I only have 1 year (redundancy) or max 2 years left until retirement. Will I have enough time for a recovery? I am a risk taker by nature and not sure whether to risk the whole amount or split it….or do nothing. Current AVC balance is 83k. 

Since I moved to cash, I do sleep better but miss the thrill of the chase!!

What would you do?

thanks

Webby68

I moved my Pru AVC to the cash fund 2 years ago, 6 months before I finished work and deferred taking my pension. Personally I've not regretted it as it's still earning more than inflation and no risk of capital loss plus already made big gains with the tax saving on the way in and tax free on the way out.

Who knows if equities will recover in 2 years or recover and crash again. I'd leave it in cash with only 2 years to go if I was you and sleep easy.

Cobbler_tone

I did this with mine, albeit not being overly critical in terms of my big picture with a modest DC pot.
If you enjoy the "thrill" why don't leave your accrued balance in the cash portfolio and direct some/all of your future contributions to something more 'exciting'. I've just done this with mine. In reality it probably won't make a huge financial difference but at least you'll see how the differing selections perform.
The one thing you can't afford are regrets and sleeping at night is pretty valuable.

Maria2512

Thanks for the replies

Albermarle

There is a Large area between 100% equities and 100% cash. You can have a mix at various %.

jimjames

Maria2512 said:

What would you do?

Move 50% back to equities?

DonSmith

1. So close to retirement you should be taking zero risk.

2. we are at the end of a 40 year bull market in equities and bonds with a bottom still far off. It’s not coming back for a long time. Commodity’s is where I’d want to be with gold (which I class as real money and not a commodity regardless) being No1.

Ebeneezer9

I have 23 months to retirement and have today moved my LGPS AVC to 100% cash.  Belt and braces approach in the face of so much uncertainty and little time to recoup losses.