Timing the market!

Moonwolf

https://forums.moneysavingexpert.com/discussion/comment/82114764#Comment_82114764

Yes, found myself worrying too much about volatility and took an annuity with 50% of my pot.

However, this was less about timing the market and more about peace of mind.

As others have said, when you are accumulating riding it out is fine, once you are drawing down, sequence of returns can really hurt, particularly if you are bridging an income gap with your pot, so drawing more heavily earlier on.

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/82115954#Comment_82115954

But that's really mixing two separate concepts - it's entirely reasonable and sensible to derisk in a planned manner in accordance with known timescales of moving from accumulation to decumulation phases, but that's nothing to do with timing the market, which is all about believing in one's ability to anticipate future market conditions and reacting to rumours and speculation…

Triumph13

https://forums.moneysavingexpert.com/discussion/comment/82115960#Comment_82115960

The two things are inextricably linked though. Those of us in decumulation phase who have already won the game, are still faced with the same questions when we see high values. How much, if any, do we move to a defensive position, with possible inflation risk, vs how much do we let it run?

When I moved 1.5 years of planned drawdown to the money market a few months ago, it wasn't in accordance to any pre-existing plan. It was much more like mistermeaner and his casino, taking some winnings off the table. The price (drag on returns) was worth it for peace of mind. When I actually came to make a withdrawal from the SIPP a couple of weeks ago, I did it from stocks rather than those money market funds. That was definitely market timing too, because the decision on where to take it from was entirely driven by valuations.

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/82116476#Comment_82116476

But the fact that you tried timing the market when in the decumulation phase doesn't actually counter the point I was making, i.e. that such opportunistic attempts are different from following a strategy?

Triumph13

https://forums.moneysavingexpert.com/discussion/comment/82116574#Comment_82116574

If the strategies were laid out in advance and set in stone, then I would completely agree with you. In practice though, I think many of us are being triggered to make changes to our strategies by what we perceive to be high valuations.

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/82116598#Comment_82116598

I'm not saying that it's invalid to do that, but am just observing that doing so is simply trying to time the market rather than following a strategy - strategies can and do change for all sorts of reasons, but acting on perceptions of future or even current market valuations isn't a strategic approach…