Gold fund - no. It will always "look good" against your standard mixed fund etc. But far to risky.
Who's the provider? Seems very limited.
Pension fund performance - do you monitor yours, how is it doing, do you actively change it?
- Thread starter danlightbulb
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Gold fund - no. It will always "look good" against your standard mixed fund etc. But far to risky.
Who's the provider? Seems very limited.
Gold if you really want it is just a small part of a portfolio. The risk rating is probably just indicative of it being a bet on a single commodity. Honestly though, you know that saying about past performance that is plastered all over investment websites... I'd listen to that, people tend to chose yesterday's winners investing in hindsight.
Aegon Blackrock. There are around 80 different funds in total, most of them equity funds of various configurations, plus a handful of 'balanced or mixed asset' funds, and some standalone 'fixed income' (bonds) funds.
The question Im asking myself is whether it is worth being a little in gold. I have looked at the past performance, because that is the only data I have. Is the future likely to be different from the past, I don't know. That's the whole point of diversifying isnt it, which suggests I probably should have a little bit of a gold fund. Im not overly bothered by it though, as it will only be small. So that logic doesn't get me to an answer.
I completely agree with you. I can't know what will happen in the future though. Are equities on the brink of collapse and bonds will take over the world for five years. Who knows. You can go online and read an article supporting either position.
The only data I have is historic.
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The thing with gold is you have to ask why you want it. I.e as an inflation hedge a few % isn't going to be doing much. If its because you are worried about end of days holding physical bars is much nicer.
The only reason I am interested is because its been doing comparatively well against other funds. What reason is there to think that would change?
Gold does well when things are chaotic.
The problem is that gold doesn't earn anything, it just sits there.
Going back to our earlier conversation, it comes back to "why?". If you said, "I'm not sure that bonds really protect well enough against downturns in equities, and I'd like something else to diversify with", then swapping in a bit of gold to help offset losses in chaotic markets might make sense.
But just choosing gold because it has done well recently doesn't necessarily make much sense - since as mentioned, it doesn't bring in any revenue.
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The gold fund I have access to is actually a gold equities fund - it is an equities fund that invests only in companies that mine gold or other precious metals. It is not specifically a gold buying fund - I don't have one of those to choose from.
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Soldato
I used to work for a company who paid part of the salary in RSUs (stock). I always thought that was a bit sketchy because it made all employees have to figure out how trading/investing worked, and most ppl just aren't up to the task.
I'm getting similar vibes with pensions. Most people trying to DIY will make mistakes. But usually letting some company do it for you is also bad.
Very flawed system.
I'm getting similar vibes with pensions. Most people trying to DIY will make mistakes. But usually letting some company do it for you is also bad.
Very flawed system.
Associate
It's not diversified beyond the US, no. Few points on my take on the risk - firstly I'm young enough (mid 30s) to generally take a higher level of risk e.g. 100% on equities with a long-term view, secondly I don't personally consider the US bias as much of a risk in itself. I think at this point with the sheer dominance of US market (esp tech - which I think will carry on shaping the world going forward) the only things that could stop the train are something like WW3 (in which case all stocks drop) or China overtaking them, but the moat is so large at this point it seems unlikely. In either situation, I think European stocks won't outperform.
I also have a high income and can max out S&S ISA, which means I can take even more risk than I otherwise would if I expected to be dependent on a pension.
This is all speculation, but my pension at this point is for wealth creation not preservation, and I consider the upside potential higher than the downside risk. And I've done well speculating with my S&S, and gambling on events, so while I'm no superforecaster, I do trust my judgement enough to take a fair amount of risk with this stuff.
I should add that I purposefully don't max out my pension contributions - I put travelling and experiences etc a higher priority because there's always the chance you'll drop dead tomorrow!
It just seems to me that there is a bit of a grey area in the middle around proportions.
For example:
100% US only equities - clearly extremely high risk, and not at all diverse, but has paid off for the past few years.
100% global equities tracker - high risk in the sense its all equities, but that might be ok.
80/20 equities bonds or some other percentage - this is where the grey area is, how much bonds?
>50% bonds or cash investments - low risk clearly (although you'd have got screwed last year if this was your strategy because of the way bonds went), and you'd have sub-optimal growth against equities.
What is causing me problems is whether to keep the c.20% bond allocation or just go all equities. Equities have given larger returns but there are perhaps signs this will pull back. Is 20% of bonds worth bothering with at all even, its hardly enough to offset a massive stock market shock where 80% of your funds still would be held.
My current bond fund is comprised of UK gilts and overseas government bonds, rather than corporate bonds. There are separate corporate bond funds available. I assume government bonds are the safer of the two types, so perhaps another grey area is instead of picking government bonds, pick corporate bonds.
What gets me is you look at the fund performance, and on the one hand I have in front of me a bunch of global (US heavy) equity funds that have done great (>10% p.a average), and then my balanced fund which has only done 5% p.a average. A UK only equities fund is lower still, c.4% p.a average. It is difficult to choose a fund when I am seeing that poor return on screen, even if it's for diversification reasons.
Soldato
I need to point out the obvious here: "past performance does not guarantee future results"
Yes the uk market sucks at the moment and only looks like it's going sideways or down... but the other way to look at it is that your buying your shares on the cheap.
The US market itself is moving sideways apart from the big 7 which are all tech companies, buying into them now could mean that you're buying some very inflated shares. Not to sound like a negative nelly but how much room for growth is there left for the big 7?
The speculation is that China are gearing up there stock markets to take on the US and India's stockmarket is at all time highs at the moment, it be interesting to watch what happens..
Looking at the best performing ETFs at the moment may just mean that you're paying them when they are at or near their peak.
My Vanguard ETFs was just moving sideways or down most of the year, until Nov-Dec, then they shot straight up.
Another one of my Vanguard ETFs which I only started to buy has done nothing but lose money for the past two months..
Yes the uk market sucks at the moment and only looks like it's going sideways or down... but the other way to look at it is that your buying your shares on the cheap.
The US market itself is moving sideways apart from the big 7 which are all tech companies, buying into them now could mean that you're buying some very inflated shares. Not to sound like a negative nelly but how much room for growth is there left for the big 7?
The speculation is that China are gearing up there stock markets to take on the US and India's stockmarket is at all time highs at the moment, it be interesting to watch what happens..
Looking at the best performing ETFs at the moment may just mean that you're paying them when they are at or near their peak.
My Vanguard ETFs was just moving sideways or down most of the year, until Nov-Dec, then they shot straight up.
Another one of my Vanguard ETFs which I only started to buy has done nothing but lose money for the past two months..
Nope, I'll have state pension on top.
DB is a defined benefit pension; in short, I'll earn some fraction of my career average pay if I stay with the company I'm with. If my career average pay is £70,000 and I work for this company for 30 years, I'll get 30/49th of the £70,000 for the rest of my life post-normal retirement age. This figure is revised annually to account for inflation. As good as it sounds, this is still a step below the old "gold-plated" final salary pension.
This is before I also start doing additional contributions as I recently went into the 40% band so I'll get tax relief and build more pension at the same time.
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Soldato
I do get very scared when I see people chasing returns based on past performance. But I am going to keep out of this mainly as its a little too close to the day job.
Its going to be a bit like is always the case with this sort of thing that some people will FOMO into all sorts of thing.
Then see a drop (in real or relative terms).
Soldato
You could make a reasonable argument for anything in that range. At some point you'll worry about risk and want more bonds, but maybe you're just too young to feel that worry yet.
If I had enough pension fund already, then I guess I'd be looking to protect it, but as it's nowhere near high enough, I need to go for growth.
In response to you and slinxy, I'm not chasing based on past performance. I'm well aware it's not an indication of future performance and things could change. Thing is, unless there is a signal for that, some indication of a different future, then it's just guesswork either way. In which case maybe looking at the best performing areas in recent past and following that IS an ok approach. I'm not talking about dropping out of equities for fear of a doom crash, I'm just talking about flexing an already fairly low bond percentage, and making sure I have the right mix of global Vs UK.
All good points but to change my strategy based on those would be just as speculative as following the short term fund performance.
To be fair I'm interested in improving my India or China percentage but I haven't found any funds in my scheme which mention either of those locales.
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Soldato
I know mate, I have spoken to the traders at work.. they don't mess around with their pension and they recommend that I leave mine alone.
not mocking anyone here but it's like they not invested in the stock market at all, they watched some youtube videos and all of a sudden they're Carl Icahn, John Bogle or Warren Buffett.
I don't see why people don't dip the toes in first and open up a s&s isa or a sipp... yeah there's is the cost of lost opportunity but do they have the metal to hold on to ETFs that are 10, 15, or even 25% down?
The worst case scenario they sell their existing holdings in their pension.. buy into S&P 500 at 100%, then say the AI bubble pops, S&P is down 25% percent... they panic and sell their S&P 500 ETFs and move it back to the company default scheme after wiping years of value from their pension.
It's not an everything or nothing situ... you could just add a world tracker or s&p tracker to your existing pension setup or a sipp if you want additional exposure to a certain market.
Ok if you already have a good asset mix, which it sounds like you do. My default fund was terrible.
Soldato
Semi serious post, with the state of the world right now I would probably plunge for a global weapons and ammo producers index tracker 
Soldato
Thats why most people should pick one of the well known diversified funds and leave it for a few decades. Chasing a few extra percent all the time and constantly fiddling with things like pensions is not a great idea IMO.
Saying that, some of the figures posted here from company invested pension schemes are appalling. High fees and low growth, no thanks.
Soldato
Yeah I mean this is pretty much what I want, some fund(s) that are pretty well diversified, and low fees. Currently I don't think I'm really getting that.