Pension fund performance - do you monitor yours, how is it doing, do you actively change it?

[danlightbulb]

Interesting that the chap on pensioncraft is now recommending a two fund strategy while before he was all in on a single world tracker… not sure when he changed his method but he must be copying me..

I just watched it and am a bit confused. His opening line is that he recommends a two fund approach - a safe fund and a global index tracker. He then goes on to only talk about global tracker options.

So what does he mean by a safe fund? Bonds?

Because I thought the recommended approach now was to go for 100% global index tracker?

 

[ddoubleep]

I thought his approach was 90% VHVG and left assuming what he's done with the other 10%

He explains loads of Global trackers and it's also sponsored by Freetrade.

I'm beginning to feel more like these videos get pumped to keep the content active as sometimes it's a % change or a new fund or a new strategy.

I'm one who did change to VHVG and it tanked a bit in the same week my All Cap rose a chunk and couldn't get why.

His video isn't conclusive and proves you still need to research yourself as to what risk you want.

Back to the egg hunt...

 

[slinxy]

I just watched it and am a bit confused. His opening line is that he recommends a two fund approach - a safe fund and a global index tracker. He then goes on to only talk about global tracker options.

So what does he mean by a safe fund? Bonds?

Because I thought the recommended approach now was to go for 100% global index tracker?

A safe fund is what you want it to be, a market tracker is not a safe fund… everyone is predicting a market crash at some point.. why? Cos everyone always does… at the moment there’s meant to be an AI bubble.. the housing market is meant to go down further… etc etc etc…

For me my safe fund is the stand fund of my workplace pension; risk cat 4.. like said in my post, I split my work place pension to 50% managed diversified fund which has 40% exposure to the stock market, but this is a managed exposure so someone is picking what stocks is getting brought and sold, 30% into corp/gov bonds and 30% in REITs, money lending, forestry (god knows what this is) etc.

The other 50% is at 45% dev world; risk cat 5 and 5% emerging market; risk cat 6

I also have two frozen pension pots that are DBs; risk cat 1, stocks in the company that I work for via work schemes: risk cat 6, stocks, shares and bonds in ISA, shares in trading accounts..

As one of my original posts says, if you want more exposure to the market, it’s best to just add on another fund to your existing pension plan.. but ******* around with your current pension should be the last thing on your agenda.

Try buying shares or a tracker in an isa first, and see if you can handle the pain of it dropping 25%, 50% even 75% percent.. then imagine what it feels like when it’s 100Ks lost. the FOMO is unreal here, the market is crazy at the moment due to AI, but rest assured.. like what we had with the internet and the housing craze that came and popped, the next craze is around the corner; I’m thinking robotics.

It’s all about how much risk you can handle and how long you have to allow the market to recover, for most people it’s best to let a professional handle it and don’t have to think about it.

 

[danlightbulb]

A safe fund is what you want it to be, a market tracker is not a safe fund… everyone is predicting a market crash at some point.. why? Cos everyone always does… at the moment there’s meant to be an AI bubble.. the housing market is meant to go down further… etc etc etc…

For me my safe fund is the stand fund of my workplace pension; risk cat 4.. like said in my post, I split my work place pension to 50% managed diversified fund which has 40% exposure to the stock market, but this is a managed exposure so someone is picking what stocks is getting brought and sold, 30% into corp/gov bonds and 30% in REITs, money lending, forestry (god knows what this is) etc.

The other 50% is at 45% dev world; risk cat 5 and 5% emerging market; risk cat 6

I also have two frozen pension pots that are DBs; risk cat 1, stocks in the company that I work for via work schemes: risk cat 6, stocks, shares and bonds in ISA, shares in trading accounts..

As one of my original posts says, if you want more exposure to the market, it’s best to just add on another fund to your existing pension plan.. but ******* around with your current pension should be the last thing on your agenda.

Try buying shares or a tracker in an isa first, and see if you can handle the pain of it dropping 25%, 50% even 75% percent.. then imagine what it feels like when it’s 100Ks lost. the FOMO is unreal here, the market is crazy at the moment due to AI, but rest assured.. like what we had with the internet and the housing craze that came and popped, the next craze is around the corner; I’m thinking robotics.

It’s all about how much risk you can handle and how long you have to allow the market to recover, for most people it’s best to let a professional handle it and don’t have to think about it.

I agree with all that but you saw my opening post - my default pension fund was awful in terms of balance. Heavy in UK equities. So I had to change it.

Then the prevailing thinking from here and various YouTubers including DamienTalksMoney and PensionCraft was to just have everything in a world tracker. Forget the bonds. So I started moving towards that.

But now the thinking has changed again?

So which is it? Bonds or no bonds?

 

[darkgen]

The talk of "inevitable market crashes" is somewhat a misnomer for long-term investors anyway. If you're a day trader or short-term gainer, yes you may very well get caught out but for long-term investors the markets have generally recovered within 12/18 months of a significant market event. If you happen to be lucky enough to time the event, COVID being a recent example, you can very quickly make buck too!

 

[slinxy]

I agree with all that but you saw my opening post - my default pension fund was awful in terms of balance. Heavy in UK equities. So I had to change it.

Then the prevailing thinking from here and various YouTubers including DamienTalksMoney and PensionCraft was to just have everything in a world tracker. Forget the bonds. So I started moving towards that.

But now the thinking has changed again?

So which is it? Bonds or no bonds?

You have to look at it from their position, it would be a pretty rubblish channel if they said, "yeah just leave it alone"...
The standard pension fund for most people is a risk cat 4 and should expect standard returns over a period of 10 years.

Those people are also self employed and have to manage their own pensions... or pay someone to do it while most people in the UK are employed by a company and that company has paid someone to manage everyones who's not opt'ed out pensions. Yes, most traders do not beat the market and those who do are the black swans and not the norm.

The issue with bonds, is that a lot has changed in the last 30 years when it comes to the global money market... I was talking about this at work. In the past, a company needed to sell bonds to raise money for development and a lot of the good payouts was buying corp bonds in the right company. The FIRE movement in the 90s suggested that a person can be financially independent from bonds alone but since then they have changed their tune. Companys now don't tend to issue bonds, they have rounds of angel investments or go public. But again, this may change in future, as a lot of angel investors have been burt badly and some IPOs have gone a lot worst than expected, so companies may start issuing bonds again.

If or when you change your pension scheme, if you have to talk to them.. the person will try and judge your "financial awareness", They wouldn't allow me to opt out of the standard plan on the internet and needed to speak to me first. This is mainly to stop people from being tricked into giving all their pension to a con artist but if the person thinks that you ain't 100% sure of what you are doing and why, they will tell you to speak to an independent financial advisor first and may have you sign off in writting before they will make the changes.

The talk of "inevitable market crashes" is somewhat a misnomer for long-term investors anyway. If you're a day trader or short-term gainer, yes you may very well get caught out but for long-term investors the markets have generally recovered within 12/18 months of a significant market event. If you happen to be lucky enough to time the event, COVID being a recent example, you can very quickly make buck too!

IIRC, it took 10 years for the internet bubble and 5 years for the housing bubble... I'm going to shrug my shoulders and say that hopefully I have other assest that I can draw down if another market crash happens when I'm in retirement.

 

[danlightbulb]

The issue with bonds, is that a lot has changed in the last 30 years when it comes to the global money market... I was talking about this at work. In the past, a company needed to sell bonds to raise money for development and a lot of the good payouts was buying corp bonds in the right company. The FIRE movement in the 90s suggested that a person can be financially independent from bonds alone but since then they have changed their tune. Companys now don't tend to issue bonds, they have rounds of angel investments or go public. But again, this may change in future, as a lot of angel investors have been burt badly and some IPOs have gone a lot worst than expected, so companies may start issuing bonds again.

The bonds I'm talking about are government bonds / gilts. Traditionally it was 60/40 or 80/20 equities/bonds on some sort of lifestyle path so the equities reduces as you get older. Also UK pensions are unbalanced in UK equities.

Those YouTube channels, and here, have been saying not to bother with this anymore and to go all in global equities, or if you can't get a truly global fund then make your own from say a developed world ex UK fund plus a UK fund (this is my case, as I don't have an all world fund to choose from).

If or when you change your pension scheme, if you have to talk to them.. the person will try and judge your "financial awareness", They wouldn't allow me to opt out of the standard plan on the internet and needed to speak to me first. This is mainly to stop people from being tricked into giving all their pension to a con artist but if the person thinks that you ain't 100% sure of what you are doing and why, they will tell you to speak to an independent financial advisor first and may have you sign off in writting before they will make the changes.

Mine is just all done online, no questions asked. As is my girlfriend's scheme, and she had put her entire portfolio in a property fund up to now.

 

[platinum87]

A safe fund is what you want it to be, a market tracker is not a safe fund… everyone is predicting a market crash at some point.. why? Cos everyone always does… at the moment there’s meant to be an AI bubble.. the housing market is meant to go down further… etc etc etc…

For me my safe fund is the stand fund of my workplace pension; risk cat 4.. like said in my post, I split my work place pension to 50% managed diversified fund which has 40% exposure to the stock market, but this is a managed exposure so someone is picking what stocks is getting brought and sold, 30% into corp/gov bonds and 30% in REITs, money lending, forestry (god knows what this is) etc.

The other 50% is at 45% dev world; risk cat 5 and 5% emerging market; risk cat 6

I also have two frozen pension pots that are DBs; risk cat 1, stocks in the company that I work for via work schemes: risk cat 6, stocks, shares and bonds in ISA, shares in trading accounts..

As one of my original posts says, if you want more exposure to the market, it’s best to just add on another fund to your existing pension plan.. but ******* around with your current pension should be the last thing on your agenda.

Try buying shares or a tracker in an isa first, and see if you can handle the pain of it dropping 25%, 50% even 75% percent.. then imagine what it feels like when it’s 100Ks lost. the FOMO is unreal here, the market is crazy at the moment due to AI, but rest assured.. like what we had with the internet and the housing craze that came and popped, the next craze is around the corner; I’m thinking robotics.

It’s all about how much risk you can handle and how long you have to allow the market to recover, for most people it’s best to let a professional handle it and don’t have to think about it.

Risk is interchangeable with volatility in financial things. You are mixing up that vs normal risk in other aspects in life.

If investing over a long time frame, there is no more risk, there is just more volatility in the short term.

The impact of volatility only creates risk when you are in drawdown. The way to combat that risk is to earn more, and save more, and have a plan about what you can do.

The problem in 2020 is that interest rates are basically zero, thus cannot drop further, or they can, by 0.5% which basically does nothing.

In comparison, going from 0.5 to 5%, crashes bonds, so everyone investing in bonds from 2009 till now basically has zero upside, and only downside.

Now as interest rates are at 5% , meaning, the eventual market crash followed by rate cuts will send bonds up, so for volatility we are back to a good position.

 

[slinxy]

my pension fund has just been updated with last months contributions...
typically work gives me and extra 13.8% of what I put in as it's salary sacrificed and they don't have to pay employee's NI on it.

I slapped my bonus in last month and with the changes to my scheme, I've been keeping an eye on it. To my surprise, work has topped up my bonus with an extra 13.8% of my bonus for their NI contribution... that's sum I will never have to payback unless they change the tax laws.

 

[413x]

Just finished process of merging 5 old work place pensions into vanguard.
Had a look at performance of each vs the funds I have picked in vanguard. 3 Aviva and 1 Scottish Widows are a bit behind but not drastically. But the people's pension one.. Dire!

2 more to go.

 

[ddoubleep]

Just finished process of merging 5 old work place pensions into vanguard.
Had a look at performance of each vs the funds I have picked in vanguard. 3 Aviva and 1 Scottish Widows are a bit behind but not drastically. But the people's pension one.. Dire!

2 more to go.

Are you putting all 5 transfers into the same fund and pot?

 

[413x]

Are you putting all 5 transfers into the same fund and pot?

I'm pulling them all into vanguard and splitting between a couple of funds.


Edit:
A lot of these are quite small pots. I think the total of the 5 in question is 10-11k

I have a couple more at 10k ish

And then a big one (44k) which I may leave where it is as its been doing pretty well.

I have a newish workplace fund with 3k and growing at 600ppm from contributing stuck with aviva.. But I'm moved it a much more aggressive fund.

In total I've worked out it's about 77k + 600ppm.

So although I'm behind. I'm not too far off course especially when I consider my isa at 34k and also growing at about 600-1000ppm.


When comes to pension age I'd like to take pension and isa to minimise tax. I but this is a long way off.

At 38 years old.. Its not great. But far from terrible.

 

[moon man]

Just something the Vanguard help line guy told me, you can set a transfer in motion to your selected fund but then on pressing cancel it will hit Vanguard as cash.
This may be useful if say you forsee a big dip and fancy waiting, yeah yeah yeah I know it's not day trading it's long term blah blah blah

 

[ddoubleep]

VHVG Developed World has tanked hard the past few weeks since grabbing a chunk. I should not really check and let it be and top-up whilst it getting lower.

Annoyingly my Global All Cap which made steady gains has lost a bit but not as much which is playing on my mind.

Mind keeps saying stick to one and merge them and let them be but having dropped different % I am looking at the markers if bought them same time then both would have tanked more or less the same.

 

[dlockers]

Just something the Vanguard help line guy told me, you can set a transfer in motion to your selected fund but then on pressing cancel it will hit Vanguard as cash.
This may be useful if say you forsee a big dip and fancy waiting, yeah yeah yeah I know it's not day trading it's long term blah blah blah

You have really gotta stop day trading your pot lol

 

[413x]

All I've been doing is holding back some cash and buying in to sipp when it takes a dip.
But once it's in. It's in and that's that.

 

[ddoubleep]

All I've been doing is holding back some cash and buying in to sipp when it takes a dip.
But once it's in. It's in and that's that.

I did the same hence been checking but having two funds in my SIPP I unsure on what to do. Both are dipping. VHVG and All Cap.
I just looked at the markers and calculated if bought at the same time as I did last month then there was about £160 difference in favour of the All Cap had I gone with the same lump sum.
Just seeing red isn't good but being locked in long term but will dip up and down. The charts are better in Vanguard than my workplace hence might be seeing it more this time.

 

[Narj]

Just finished process of merging 5 old work place pensions into vanguard.
Had a look at performance of each vs the funds I have picked in vanguard. 3 Aviva and 1 Scottish Widows are a bit behind but not drastically. But the people's pension one.. Dire!

2 more to go.

It does feel good to get this stuff in order. It was a massive relief to get mine done - I made up a good chunk of poor performance in one fund by going balls-out in the USA but have since re-balanced.

 

[danlightbulb]

I'm in the process of rebalancing at the moment, didn't want to do it all in one go. Slowly getting rid of the fund with the bonds in.

I'm thinking of overweighting the UK though. 10% instead of 5%. Not sure what to do about emerging markets either. Was aiming for 10% but I have doubts as there is no indication emerging markets will perform at all.

 

[Narj]

I'm in the process of rebalancing at the moment, didn't want to do it all in one go. Slowly getting rid of the fund with the bonds in.

I'm thinking of overweighting the UK though. 10% instead of 5%. Not sure what to do about emerging markets either. Was aiming for 10% but I have doubts as there is no indication emerging markets will perform at all.

I just stick with the assumption that I'm not smarter than the market so make sure I'm allocated by global market cap albeit with a slight overweight in the US - I think when interest rates come down, stocks outside the big 7 will recover well - but that's at my own risk and also my own stupid fault if it doesn't work out.

10% in UK when we're under 4% of global market cap (IIRC) suggests you're pretty optimistic that we won't continue to stagnate. Hope you're right!