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

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  • SouthCoastBoy
    SouthCoastBoy Posts: 1,084 Forumite
    1,000 Posts Fifth Anniversary Name Dropper
     8 of us racing headfirst across a quarry at up to 100mph.  Should be a blast!  If weather holds, we might get a day up Yr Wyddfa (Snowdon).


    That sounds interesting! What’s the event - cars, motorbikes?
    I expect it is a zip wire
    It's just my opinion and not advice.
  • Cobbler_tone
    Cobbler_tone Posts: 1,012 Forumite
    Part of the Furniture 500 Posts Name Dropper Combo Breaker
    edited 9 April at 8:41AM
     8 of us racing headfirst across a quarry at up to 100mph.  Should be a blast!  If weather holds, we might get a day up Yr Wyddfa (Snowdon).


    That sounds interesting! What’s the event - cars, motorbikes?
    I expect it is a zip wire
    I did that, highly recommended. I'm not good with heights so laying waiting to go was the worst bit....a bit like watching the markets right now.
    At this moment the FTSE is virtually at the same value as it was 2 years ago. Like an Asda rollback!
  • MetaPhysical
    MetaPhysical Posts: 449 Forumite
    100 Posts First Anniversary Photogenic Name Dropper
    Hoenir said:
    Perhaps there'll be a new fad called "Lifestyling".  Majority of people would prefer the more staid returns of a well managed portfolio. Than focus on minimising cutting costs to the bone while following the herd that bases their decision making on flawed social media commentary. 

    Investing fads are cyclical. Always have been. Every new generation of investors believes that "This Time is Different".  Human nature being what it is , never the case. 
    I was quite content taking a back seat approach and very trusting of those "financial people who know best" being life-styled into bonds until 2022 when I lost a boatload on them.  Since then I have taken control of the situation myself.  Three years of reading books, following the experts on this forum and people such as Pete Matthews, Ramin, Andrew Craig, Damian and others has led me to the same conclusion that I was told on day 1:  A well diversified all-World equity portfolio with a sprinkling of all world government and corporate bonds gives the best result overall if you stick with it.   I have gone for 55% global equities; 35% Bonds and 10% MM cash.  Your exact exposure mix is up to you but that's mine.  You have to stay with the plan and not let global events deviate you from your path.  The MM cash is what i will take my income from and when markets are up I will replenish it.
  • jimi_man
    jimi_man Posts: 1,415 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    I've just retired (end of Jan) and I'm extremely thankful that all of our retirement income is DB pensions. We do both have SIPPs but as a savings plan to reduce taxation, rather than to provide income. So we are happy to leave them be for the moment. Mine is 25% cash which I can use as a buffer if necessary. 
  • Roger175
    Roger175 Posts: 299 Forumite
    Part of the Furniture 100 Posts Name Dropper Combo Breaker
    edited 9 April at 9:40AM
    A good chunk of our SIPPs/ISAs are held as a High Yield Portfolio of individual shares. I have spent over 20 years setting up this portfolio as an alternative to an annuity (it pays roughly 5% yield, more if share values drop!). The portfolio comprises around 25 different well diversified companies, all of which were selected on the basis of the dividend history/projection, I have never had any intention of ever selling any of these share, but simply to take the dividends. I still own exactly the same number of shares following the drop and companies pay dividends on the basis of 'pence per share', therefore the dividend income is unaffected by market fluctuations. (OK, longer term dividends might well be adjusted depending on company performance, but many companies are remarkably robust in maintaining their dividend).
    I know HYP investing has fallen out of favour and I keep being tempted away from this towards growth fund investing, but it's these funds which give me a headache, my individual shares just sit there plodding away and providing a lovely annual income. Up until now this income has just been reinvested in new shares and even though I've now retired that will remain the case for a good few years, but at some point I'll start taking that income and just leave the shares intact - no stress!
  • kempiejon
    kempiejon Posts: 812 Forumite
    Part of the Furniture 500 Posts Name Dropper
    As a precursor to some planned activities and spending for the next few years I have allowed cash to accumulate from takeovers, maturities, dividends, I add to my portfolio most months but gradually my cash/FI allocation has risen to abovet 15%. That's the highest percentage bonds/cash ever.
    That cash is glinting at me and I see depressed prices waving too. It's part of the plan to stay with that amount in bonds/cash for a few years but I am resisting what look like bargains.

  • Nebulous2
    Nebulous2 Posts: 5,666 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Well my modest SIPP has been in cash for months.  I've just made a total stab in the dark, but gilts are down this morning, and I've locked in over 5.3% for the next 21 years with half of it, and bought an index linked one for a similar duration with the other half. 
  • Pat38493
    Pat38493 Posts: 3,327 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    Hoenir said:
    It might be a good time to research Japan's lost decade. We might not be just looking at market volatility, we might be looking at years of low growth and poor returns. 
    S&P 500 on a total return basis suffered a period of 12.7 years once. 

    As for Japan it's approaching three decades, not one. 
    I saw a chart that showed the 12.7 years yesterday, but I think it was on a real returns basis on the X axis so it was the time to recover and catch up with inflation if I understood correctly but could be wrong?
  • Universidad
    Universidad Posts: 414 Forumite
    100 Posts Second Anniversary Name Dropper
    It might be a good time to research Japan's lost decade. We might not be just looking at market volatility, we might be looking at years of low growth and poor returns. 
    My big fear is that when, inevitably, the separation between those who managed to hold on to a good DB pension and those with tiny DC pensions becomes too great, the government will take some popular action to harmonise things.

    This is not borne so much out of concern for future investments as the fact that so few people have decent amounts going in to their DC pensions... But a decade of terrible performance wouldn't help. 
  • dharm999
    dharm999 Posts: 692 Forumite
    Part of the Furniture 500 Posts Name Dropper
    We have a few years of expenditure in Vanguard gilts and money market funds within an ISA, I’ve been putting cash back in to the ISAs as fixed term cash deposits, outside of an ISA,  matured to replace the cash we took out to buy our house last year.  Just living off the income from those plus OH’s state pension, small DB pension, some part time work for me, and dividends on our remaining investments.  These all cover our day to day expenses, and means we don’t have to touch our SIPPs, unless it’s for major blow outs.  I think we will wait and see what happens with the markets, as we don’t have to rush to do anything, but if the markets stay depressed for a while we will put more in to our SIPPs.  
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