Brexit - go all cash in pension?

Brexit - go all cash in pension?

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Backtobasics

Original Poster:

1,182 posts

182 months

Monday 27th June 2016
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Making a decision this morning on this one.

15 years till retirement, looking at switching to all cash to weather the impending storm and get back in when the dust settles.

Any thoughts?

Jockman

17,912 posts

159 months

Monday 27th June 2016
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Too late.

Zigster

1,636 posts

143 months

Monday 27th June 2016
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I agree. Feels a bit late now to make a big decision like that. The markets have fallen on the Brexit news so you've already lost. Hard to know which way they will from now - could be up, could be down. But 15 years is a long time to be in cash.

Backtobasics

Original Poster:

1,182 posts

182 months

Monday 27th June 2016
quotequote all
80% of my funds are global equity based so I'm not too far off my high at the moment, just want to act before the virus spreads. I wasnt planning on 15 years in cash, just until things become clearer

Ozzie Osmond

21,189 posts

245 months

Monday 27th June 2016
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Backtobasics said:
80% of my funds are global equity based so I'm not too far off my high at the moment, just want to act before the virus spreads. I wasnt planning on 15 years in cash, just until things become clearer
I'd sit tight in that case. Not least because Sterling may prove to be a lousy currency, albeit does match your eventual spending currency.

I'm 40% UK and mainly in large companies. They typically have very international businesses so it's nothing like being 40% dependent upon the UK economy.

Pheo

3,324 posts

201 months

Monday 27th June 2016
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If anything you want to buy more during a bear market as it'll likely make gains later (although this is a gross over simplification)

If you do this now you will crystallise any loss. Instead I would look at planning out life styling over the next 15 years so you gradually switch to safer investments to guard against any sudden losses which you don't have time to recover from. Perhaps speak to a good IFA?

CaptainSensib1e

1,432 posts

220 months

Monday 27th June 2016
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By the time the 'dust settles' prices will already be a lot higher. What you are suggesating is selling low to buy high later, the opposite of a sensible investing strategy.

Backtobasics

Original Poster:

1,182 posts

182 months

Monday 27th June 2016
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OK guys, good discussion, I'll hold and continue to buy low reducing my risk exposure as I start to get grey hairs (which maybe next week instead of next decade)

sideways sid

1,371 posts

214 months

Tuesday 28th June 2016
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Too late to really take advantage of this but maybe sell half of your shares and funds and await a better re-entry point to buy back in.

Ozzie Osmond

21,189 posts

245 months

Thursday 30th June 2016
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Well, with the FTSE 100 up by more than 8% in the last 3 days (albeit after a dip) it shows just how risky an "out of the market" position can be. I'd like to move into bonds but they look expensive to my eye so will probably stick with the equities rollercoaster.

Ginge R

4,761 posts

218 months

Thursday 30th June 2016
quotequote all
Backtobasics said:
Making a decision this morning on this one.

15 years till retirement, looking at switching to all cash to weather the impending storm and get back in when the dust settles.

Any thoughts?
There will always be something that causes you to think twice. If your investments were good for you two months ago, why would they be any different now? It has been one hell of a week of two, but this fall was only precipitous because of lofty aspirations (greed!) by traders. It was clear that even with a Remain vote, there'd be a revision. Business as usual - get the fundamentals of your portfolio right and with the greatest of respect, and hoping you don't take this the wrong way.. if you're coming here for investment advice, you probably shouldn't tinker. Be diversified, be cost effective, don't lose sight of the bigger picture. beer

anonymous-user

53 months

Thursday 30th June 2016
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Depends what you are investing for - capital growth or dividend income. This week I noticed FTSE100 yields were looking pretty mouth watering by my standards so I transferred a pension from a previous employer into my SIPP and bought £29,000 worth of shares on Tuesday morning in Aviva, BP, Glaxo, Legal & General and SSE. Average yield of 6.5%; and not that it matters to me but the stock value (of the original £29k) has already gone up by £1200 (circa 4%).

Buying this week has been worth it for me.

Edited by anonymous-user on Thursday 30th June 21:35

Jockman

17,912 posts

159 months

Thursday 30th June 2016
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RaymondVanDerDon said:
Depends what you are investing for - capital growth or dividend income. This week I noticed FTSE100 yields were looking pretty mouth watering by my standards so I transferred a pension from a previous employer into my SIPP and bought £29,000 worth of shares on Tuesday morning in Aviva, BP, Glaxo, Legal & General and SSE. Average yield of 6.5%; and not that it matters to me but the stock value (of the original £29k) has already gone up by £1200 (circa 4%).

Buying this week has been worth it for me.

Edited by RaymondVanDerDon on Thursday 30th June 21:35
Nice one Raymondo. (minus trading costs?).


anonymous-user

53 months

Thursday 30th June 2016
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That includes trading costs which were about £12 a trade (Hargreaves Lansdown) so approx £60.

Edited by anonymous-user on Thursday 30th June 23:40

sidicks

25,218 posts

220 months

Friday 1st July 2016
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RaymondVanDerDon said:
Depends what you are investing for - capital growth or dividend income. This week I noticed FTSE100 yields were looking pretty mouth watering by my standards so I transferred a pension from a previous employer into my SIPP and bought £29,000 worth of shares on Tuesday morning in Aviva, BP, Glaxo, Legal & General and SSE. Average yield of 6.5%; and not that it matters to me but the stock value (of the original £29k) has already gone up by £1200 (circa 4%).

Buying this week has been worth it for me.

Edited by RaymondVanDerDon on Thursday 30th June 21:35
Hasn't the FTSE 100 gone up almost 9% over the same period?

Ozzie Osmond

21,189 posts

245 months

Friday 1st July 2016
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sidicks said:
Hasn't the FTSE 100 gone up almost 9% over the same period?
Yes, it's one of the biggest/fastest increases in history. Quite astounding.

walm

10,609 posts

201 months

Friday 1st July 2016
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sidicks said:
RaymondVanDerDon said:
Depends what you are investing for - capital growth or dividend income. This week I noticed FTSE100 yields were looking pretty mouth watering by my standards so I transferred a pension from a previous employer into my SIPP and bought £29,000 worth of shares on Tuesday morning in Aviva, BP, Glaxo, Legal & General and SSE. Average yield of 6.5%; and not that it matters to me but the stock value (of the original £29k) has already gone up by £1200 (circa 4%).

Buying this week has been worth it for me.

Edited by RaymondVanDerDon on Thursday 30th June 21:35
Hasn't the FTSE 100 gone up almost 9% over the same period?
The crumbling GBP is doing wonders for all those overseas earnings in the top 100.
That obviously helped BP and Glaxo but wouldn't help the others.
Plus the div yield will have insulated those names in the dip but caused them to underperform in the rally.

6.5% is amazing though.

Simpo Two

85,151 posts

264 months

Friday 1st July 2016
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As an amateur looking for income I'm starting to see shares a bit like deposit accounts, and investing for dividends. The cheaper the share price when you buy, the higher the dividend return, independent of the actual share price. If the shares go up - Shell made 13% in a week - great, if they go down, Persimmon, it's no big deal because you still get the dividend.

So I think of a dividend of, say, 5%, as cash in the bank making 5% interest a year, and under a very light tax regime.

No doubt my outline above is riddled with inaccuracies but it's a new way of looking at things from the perspective of someone who's previous idea of saving was either to get sod all in a bank or hand it to a DFM/IFA after which it gets very complicated and you have layers of fees chomping away at any gains.

I expected Remain to win so unlike Raymond above I invested a few days too early, but things have been remarkably robust considering.

OK pros, rip me to bits smile

mcbook

1,384 posts

174 months

Friday 1st July 2016
quotequote all
Simpo Two] said:
If the shares go up - Shell made 13% in a week - great, if they go down, Persimmon, it's no big deal because you still get the dividend.
I suppose the main concern is that if a company is performing badly it will cut or even suspend their dividend completely. So you could end up with a worthless stock and no dividend. A complete suspension of dividend payments is very rare for blue-chip companies but reductions in dividends are very common.

Adam B

27,143 posts

253 months

Friday 1st July 2016
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walm said:
The crumbling GBP is doing wonders for all those overseas earnings in the top 100.
Its doing wonders for my GBP denominated 100% equity pension - where 70% is US, Asia or EM equities

Now wondering whether I cash in on low GBP and switch everything to UK and European equities for a year or two (yes I appreciate this increases geographic risk)