Anyone Acting Defensively?

jim8888

I just wondered, as the (US) markets continue to forge ahead, if anyone has switched funds in their pensions to a more conservative position? I have all of my DC pot in the Vanguard Lifestyle 80:20 fund, but increasingly feel a correction is coming. Should I move a proportion into cash or leave well alone? (I don't need to withdraw from this fund for a few years yet.) 

SVaz

Define a ‘few’ years. 

If it’s fewer than five then starting to build a cash/cash-like pot is sensible for going into drawdown or bonds for an annuity. 

The only defensive change I’ve made ( very recently ) is to build a small Gilt ladder starting in 2034 for 5 years because I didn’t want to hold a short term money market fund for that long,  it’s only 10% of my Sipp,   Which is still 50% global index fund,  the rest is STMMF for use in the next 5-7 years.    My other Sipp is 75% Mixed asset fund  with 70% equities and 25% STMMF to take the tax free cash in a year or two. 

Aylesbury_Duck

I've just de-risked what has been a very well-performing all-equity fund in my Aviva DC, but even then, I've only taken it down to about 65% equities.  It wasn't in reaction to any market speculation, just simply five years since I last changed things around and I may be accessing it in the next 5-10 years.

My other DC fund choices are largely akin to the VLS60 mix already, and I have a decent amount of cash savings if I needed them rather than draw on DCs in a slump.

Notfarfromtheborder

Taken £45K profit from equities to STMM fund, also moved another £45K from global equity to multi asset (less exposure to US). Moved dial from 66/34 to 59/41 equities / cash like investments. I'm 56 and looking to start taking pension within 18months, gives £300k in cash like investments.

HedgehogRulez

Moved half my dc pot £400k into cash to see how 2026 pans out

kinger101

I was going to wait until my crystal ball told me the market had peaked.

dunstonh

I just wondered, as the (US) markets continue to forge ahead, if anyone has switched funds in their pensions to a more conservative position?

Context would be needed.    For example, many drawdown investors have moved to annuity.  That is a more conservative position.

Those who are closer to retirement may knock a notch off their equity content as their working days loom ever closer.  However, they would typically do that irrespective of market conditions.

I have all of my DC pot in the Vanguard Lifestyle 80:20 fund, but increasingly feel a correction is coming.

What did you do prior to all the previous corrections?   the most recent being earlier in the year

Personally, I have tilted away from US equities but am maintaining 100% equities.    

Crashes never happen when they are expected and you could miss 30-40% of gains before the next 20% drop comes along.  So timing something unpredictable is futile.   However, investing within your capacity for loss, risk profile and your behavioural risk is important.    If the biggest risk is you, then don't take the risks.

tacpot12

I have moved away from the US a bit. I had about 7% of my portfolio invested in North American equities, and have reduced this to about 5%. 

Alexland

jim8888 said:

I just wondered, as the (US) markets continue to forge ahead, if anyone has switched funds in their pensions to a more conservative position? I have all of my DC pot in the Vanguard Lifestyle 80:20 fund, but increasingly feel a correction is coming. Should I move a proportion into cash or leave well alone? (I don't need to withdraw from this fund for a few years yet.) 

Following the recent crash in bond prices then I'm seeing enough opportunity in fixed income to reduce my equities where at current valuations I'm seeing less opportunity. There doesn't seem to be much if any cost to being diversified at the moment with current valuations and with the ramp up in equity prices I have accumulated more than I expected at this point in life so it makes sense for me to go more balanced in my asset allocation.

A few years ago I was completely the other way around as bonds looked uninvestable and I was describing them on the forum as 'a return free risk' but that doesn't seem to be the case anymore they look fine particularly with inflation linked gilts if held to maturity or exchanged for an annuity..

So don't just sell down some equities - find other stuff you genuinely want to also invest in.

artyboy

I'm overweight on CSH2 right now, my thinking being that I'm still keeping pace with inflation for minimal risk, and the only real winner right now from my SIPP getting any bigger is the government (at least with the prevailing mood music there).

So, can accept the opportunity cost, with a view that there may be an opportunity before too long...

Albermarle

Notfarfromtheborder said:

Taken £45K profit from equities to STMM fund, also moved another £45K from global equity to multi asset (less exposure to US). Moved dial from 66/34 to 59/41 equities / cash like investments. I'm 56 and looking to start taking pension within 18months, gives £300k in cash like investments.

Something along these lines .
Plus I had some spare cash in my S&S Isa ( only a small %) and a fixed rate savings account maturing.
Initially was planning to invest some of both, but now hesitating .
So no particularly large  change in asset allocation, but some tinkering around the edges.
In fact only reducing my equity % back to where it was before the bull market increased it. Have only been around 40% in the US for some time so happy to leave that as it is .