Pension investments/Global crash

Chucklechops

Hey

I've been reading a lot about a potential stock market crash due to A.I. stocks being overinvested to the extent that a crash could happen (as suggested by the gold price surge).

This has got me concerned, as my pension is heavily invested in the BlackRock Global Equity fund, which has large holdings in US tech stocks.

Bearing in mind that fund switches operate on 'T + 2' timing, I feel I need to be proactive, rather than reactive.

I realise no-one can give me financial advice, but any thoughts on what you would do in my circumstance, and the type of fund you would switch into, if indeed a fund switch would be wise?

Any guidance would be appreciated.

Many thanks.

cfw1994

Well, as you say, nobody here will give advice.
Nobody knows when the next dip/crash might be, nor whether any specific stocks will trigger one. 
All we do know is that dips/rises/crashes are all part & parcel of investing.

You haven't said how old you are nor how far from retirement.  All these things can impact any decisions to try to lower your risk appetite, but if you are in a global fund, that is already well spread.

People have been talking about a crash for the past year or more.   Instead, many stocks & funds are up 20-45%!

Nebulous2

There are a lot of additional pieces of information needed before anyone can say what they would do.

Starters include:-

How old are you? When do you plan to retire? 

People who are sounding caution about AI, including Jamie Dimon, have also said they have no idea when any crash might come. I think he said it could be 6 months to 2 years away.

That means you could easily miss out on a 30-40% rise first..... 

Vitor

Time in the market is more important than timing the market. If you're 10+ years away from retirement just ride it out.

Bostonerimus1

If you are worried about your investments then maybe diversify your assets. Also put some money "under the matress" and pay off your debt. Being debt free makes it easier to survive things like market crashes and job losses.

DavidT67

Vitor said:

Time in the market is more important than timing the market. If you're 10+ years away from retirement just ride it out.

And what if you are less than ten years away from retirement ?  Or already retired ?

SouthCoastBoy

I'm concerned about inflated prices, as I think many are, and as I could potentially retire at anytime the impact could be quite big, hence I am holding around 40% cash, meaning I wouldn't need to sell any equities for at least 10 years, most probably longer if necessary, so that is my hedge against a drop. 

The other is to carry on working

SVaz

DavidT67 said:

Vitor said:

Time in the market is more important than timing the market. If you're 10+ years away from retirement just ride it out.

And what if you are less than ten years away from retirement ?  Or already retired ?

Then derisking by directing future contributions into safer funds is sensible.
If you are already retired then a few years income in cash/Gilts or only taking dividend income makes sense. 
’They’ have been predicting a large crash for the last 4 years,  youtube’s been full of it. 

Of course it’s going to happen at some point, that’s why you don’t wait until 5 minutes before you retire to derisk. 

Panicking rarely leads to good decisions. 

Moonwolf

I have just retired, as in 7 months ago.

This is not advice but personally I have put 3 years drawdown into a money market fund and 2 years into a pre-retirement fund. This will dampen my growth projections but would allow me to ride out a drop for a time, hopefully until some signs of recovery. In the meantime I am drawing down pro-rata from all my funds. I might also look at an annuity, I am only only 59 but might qualify for an enhanced annuity.

I am only doing this because the worst time to experience a crash is probably the first five years of retirement, particularly for those of us drawing down more in the early years as we are bridging to DB pensions.

If I was more than 5 years after retirement I would bother a lot less because a) Guaranteed income from DB pensions and b) Sequence of returns means it is less of an impact.

If I was more than 5 years before retirement I would ride it out, and perhaps delay slightly if it was really bad.

dunstonh

I realise no-one can give me financial advice, but any thoughts on what you would do in my circumstance, and the type of fund you would switch into, if indeed a fund switch would be wise?

You havent given your circumstances.  So, it's impossible to comment if anything first your circumstances.

Bearing in mind that fund switches operate on 'T + 2' timing, I feel I need to be proactive, rather than reactive.

Pension funds tend to be T+3 rather than T+2.  Although most insured pension providers pre-fund and eliminate the gap.

This has got me concerned, as my pension is heavily invested in the BlackRock Global Equity fund, which has large holdings in US tech stocks.

Which means its not your sold holding and you haven't defined heavy.

Which variation of this fund do you have?  
The main one is 27% 47% UK equity, 6% Europe ex UK and just 37% US/North America.

Its very underweight in Tech at just 14.92% vs 26.37% for average.

Albermarle

From the other side , I played safe about 10 years ago , due to similar worries at that time about overheating US stick market.
I don’t like to think about some of the growth I missed out on.
Realistically I would not be piling new money into US stocks currently, and I am a bit underweight in the US anyway, so will probably sit tight.