Will recent "events" cause a rethink of DC pensions?

QrizB

Cobbler_tone said:

That is what I was alluding to yesterday afternoon. My prediction is that we will see gains next week and we will back to where we were before the tariff announcement.

Just so we're all clear in what you're predicting, you think the S&P 500 will be back above 5600 by the end of trading on the 18th?

If not, could you make a clear statement of what your prediction is?

Cobbler_tone

QrizB said:

Cobbler_tone said:

That is what I was alluding to yesterday afternoon. My prediction is that we will see gains next week and we will back to where we were before the tariff announcement.

Just so we're all clear in what you're predicting, you think the S&P 500 will be back above 5600 by the end of trading on the 18th?

If not, could you make a clear statement of what your prediction is?

I didn’t know it was a prediction competition. 

Just so we are crystal clear. I not in the world of trading and wouldn’t dream of stating anything that had any baring on someone’s decision making. Ultimately no-one knows what the market is going to do at the moment.

But yes, it is possible that the market could recover to around the level of less than two weeks ago in a short space of time…2nd April it was 5670…then drop/go up again. It’s not much different to placing your bets on red or black at the moment. Who knows what he’ll say and do next?

It sounds the majority are oblivious and/or doing nothing at the moment, which is the pragmatic approach.

Cus

QrizB said:

PropertyGuru_Wannabe said:

We are no where near normality.  

...

 I have been buying during this downturn, and will continue doing so if markets continue to fall.

If we can have a bit of a dip in the markets again at the end of the month, just before my employer pension contributions are made, that would be nice.

does that assume that if the fund price currently at 100 goes down before you buy to say 90 then the chances of it gaining say 10% from 90 in 1 year is higher than it gaining 10% from a starting price of 100?  If so, does that outweigh the impact of the drop to 90 of ones existing investment?  Where's the tipping point?

QrizB

Cus said:

QrizB said:

PropertyGuru_Wannabe said:

We are no where near normality.  

...

 I have been buying during this downturn, and will continue doing so if markets continue to fall.

If we can have a bit of a dip in the markets again at the end of the month, just before my employer pension contributions are made, that would be nice.

does that assume that if the fund price currently at 100 goes down before you buy to say 90 then the chances of it gaining say 10% from 90 in 1 year is higher than it gaining 10% from a starting price of 100?  If so, does that outweigh the impact of the drop to 90 of ones existing investment?  Where's the tipping point?

The value of my current units only becomes relevant when I sell them.
Adding new units at 90 means the average cost of my total holding will be lower than it would beif I added new units at 100.

k6chris

ooh predictions!  I'm guessing the markets will rally strongly for a few days and then the reality of a "radical leadership style" will sink in and we will see a retesting of the current lows.  However I also thought Rory stood no chance in the golf, so......

Cus

QrizB said:

Cus said:

QrizB said:

PropertyGuru_Wannabe said:

We are no where near normality.  

...

 I have been buying during this downturn, and will continue doing so if markets continue to fall.

If we can have a bit of a dip in the markets again at the end of the month, just before my employer pension contributions are made, that would be nice.

does that assume that if the fund price currently at 100 goes down before you buy to say 90 then the chances of it gaining say 10% from 90 in 1 year is higher than it gaining 10% from a starting price of 100?  If so, does that outweigh the impact of the drop to 90 of ones existing investment?  Where's the tipping point?

The value of my current units only becomes relevant when I sell them.
Adding new units at 90 means the average cost of my total holding will be lower than it would beif I added new units at 100.

your average cost of your holding will be lower if you buy at 90 in one scenario rather than 100 in the other scenario, but aren't you making an assumption that at the time of sale in the future the price will be the same in both scenarios? Which in effect is saying that the future price will rise more later if it falls more now?

Cobbler_tone

Cus said:

QrizB said:

PropertyGuru_Wannabe said:

We are no where near normality.  

...

 I have been buying during this downturn, and will continue doing so if markets continue to fall.

If we can have a bit of a dip in the markets again at the end of the month, just before my employer pension contributions are made, that would be nice.

does that assume that if the fund price currently at 100 goes down before you buy to say 90 then the chances of it gaining say 10% from 90 in 1 year is higher than it gaining 10% from a starting price of 100?  If so, does that outweigh the impact of the drop to 90 of ones existing investment?  Where's the tipping point?

That is the definition of ‘over thinking’ 

If I sell my shares at £100 today (which I bought at £20) and they are £120 in 12 months time, have I ‘lost’ money? They could be £90 of course next year, have I ‘lost’ money then?

The cheaper you buy something and more you sell it for increases the gain. On a basic level I’d call the price of purchase vs price of sale is the ‘tipping point’ and the more you can control that timing the better. The cost of losing is to get pennies, the cost of gaining is unknown until you sell.

Cus

Cobbler_tone said:

Cus said:

QrizB said:

PropertyGuru_Wannabe said:

We are no where near normality.  

...

 I have been buying during this downturn, and will continue doing so if markets continue to fall.

If we can have a bit of a dip in the markets again at the end of the month, just before my employer pension contributions are made, that would be nice.

does that assume that if the fund price currently at 100 goes down before you buy to say 90 then the chances of it gaining say 10% from 90 in 1 year is higher than it gaining 10% from a starting price of 100?  If so, does that outweigh the impact of the drop to 90 of ones existing investment?  Where's the tipping point?

That is the definition of ‘over thinking’ 

If I sell my shares at £100 today (which I bought at £20) and they are £120 in 12 months time, have I ‘lost’ money? They could be £90 of course next year, have I ‘lost’ money then?

The cheaper you buy something and more you sell it for increases the gain. On a basic level I’d call the price of purchase vs price of sale is the ‘tipping point’ and the more you can control that timing the better. The cost of losing is to get pennies, the cost of gaining is unknown until you sell.

Yeah, I get the emotional reasoning, I can buy units cheaper/bring down my average cost as the price has dropped and it of course will get back to the higher price it was as surely that's what it's worth..  but I do wonder on a mathematics/market analysis angle if it's all a myth, that's all.

And yes, overthinking is my middle name..

Hoenir

Cus said:

Cobbler_tone said:

Cus said:

QrizB said:

PropertyGuru_Wannabe said:

We are no where near normality.  

...

 I have been buying during this downturn, and will continue doing so if markets continue to fall.

If we can have a bit of a dip in the markets again at the end of the month, just before my employer pension contributions are made, that would be nice.

does that assume that if the fund price currently at 100 goes down before you buy to say 90 then the chances of it gaining say 10% from 90 in 1 year is higher than it gaining 10% from a starting price of 100?  If so, does that outweigh the impact of the drop to 90 of ones existing investment?  Where's the tipping point?

That is the definition of ‘over thinking’ 

If I sell my shares at £100 today (which I bought at £20) and they are £120 in 12 months time, have I ‘lost’ money? They could be £90 of course next year, have I ‘lost’ money then?

The cheaper you buy something and more you sell it for increases the gain. On a basic level I’d call the price of purchase vs price of sale is the ‘tipping point’ and the more you can control that timing the better. The cost of losing is to get pennies, the cost of gaining is unknown until you sell.

Yeah, I get the emotional reasoning, I can buy units cheaper/bring down my average cost as the price has dropped and it of course will get back to the higher price it was as surely that's what it's worth..  but I do wonder on a mathematics/market analysis angle if it's all a myth, that's all.

Stocks drop in price for a reason. In times of uncertainty. Averaging fails to work so well. As there's nothing to base fair value on. Everybody is guessing wildly. Companies themselves are unwilling to provide forward guidance as they've no idea themselves how their own customers will respond to the uncertainty. While not turning the taps off completely. Sometimes it's worth pausing for a moment to reflect and adjust the plan to reflect the heightened risk level. 

BikingBud

With pension contributions is there not the gain from employers contribution and saved tax to be taken into account as well.

Even if the unit price has dropped you may still have more in your fund than you would have received as net wage.