Pension fund keeps growing - thoughts?
Discussion
My pension is a bog standard Aviva defined contribution scheme, and over the last year I have fallen in to a routine of checking the fund value regularly on line. I do not manage the funds in any way - I leave that to the fund managers at Aviva!
I don't mind equity risk since I also have cash savings and own two properties. I have zero debt.
Thing is, it just keeps going up - about 20% in the last year. The fund is invested 80% in global equity, only 4% UK equity, then bonds and cash; I semi-retired recently and no longer contribute since I'm in my mid fifties.
I have a few questions for the wise owls of PH:
I don't mind equity risk since I also have cash savings and own two properties. I have zero debt.
Thing is, it just keeps going up - about 20% in the last year. The fund is invested 80% in global equity, only 4% UK equity, then bonds and cash; I semi-retired recently and no longer contribute since I'm in my mid fifties.
I have a few questions for the wise owls of PH:
- Am I making the mistake of short-termism, and am simply seeing a short term bubble?
- Why does the fund keep growing - is it because of the global economy?
- Any opinions on how long this can continue (I know no-one has a crystal ball)?
- Is there any way of "locking in" these recent gains?
- Should I just leave it alone, since I'm not drawing down yet (and won't for a few years yet)?
Brave Fart said:
- Am I making the mistake of short-termism, and am simply seeing a short term bubble? - yes
- Why does the fund keep growing - is it because of the global economy? - yes and your allocations are squewed towards it
- Any opinions on how long this can continue (I know no-one has a crystal ball)? - crystal ball. i suspect brexit / corbyn / trump impeachment will sort it out
- Is there any way of "locking in" these recent gains? - yes, change your allocations to bonds and cash
- Should I just leave it alone, since I'm not drawing down yet (and won't for a few years yet)? - depends how risk adverse you are
I have a similar situation although my growth has been somewhat less, but my pot is spread a lot more than yours, probably 50/50 between UK and global, and then spread again between fixed interest, property, emerging markets etc etc
If I were you I'd get a decent IFA to look at it and make it a bit more spread, my investment pie chart has more colours in it then a multitude of rainbows, and personally I think thats the best way to go
If I were you I'd get a decent IFA to look at it and make it a bit more spread, my investment pie chart has more colours in it then a multitude of rainbows, and personally I think thats the best way to go
Brave Fart said:
My pension is a bog standard Aviva defined contribution scheme, and over the last year I have fallen in to a routine of checking the fund value regularly on line. I do not manage the funds in any way - I leave that to the fund managers at Aviva!
I don't mind equity risk since I also have cash savings and own two properties. I have zero debt.
Thing is, it just keeps going up - about 20% in the last year. The fund is invested 80% in global equity, only 4% UK equity, then bonds and cash; I semi-retired recently and no longer contribute since I'm in my mid fifties.
I have a few questions for the wise owls of PH:
You're not bragging...all our pension funds are up at the moment. Chances are we'll be down by the same amount in six months.I don't mind equity risk since I also have cash savings and own two properties. I have zero debt.
Thing is, it just keeps going up - about 20% in the last year. The fund is invested 80% in global equity, only 4% UK equity, then bonds and cash; I semi-retired recently and no longer contribute since I'm in my mid fifties.
I have a few questions for the wise owls of PH:
- Am I making the mistake of short-termism, and am simply seeing a short term bubble?
- Why does the fund keep growing - is it because of the global economy?
- Any opinions on how long this can continue (I know no-one has a crystal ball)?
- Is there any way of "locking in" these recent gains?
- Should I just leave it alone, since I'm not drawing down yet (and won't for a few years yet)?
Depends when you want to start withdrawing. If I were your age I'd change my mix significantly.
We're playing blackjack and you're on 19....your call to twist or stick.
CaptainSlow said:
nickfrog said:
Yipper said:
The general rule of thumb is to be roughly 100% in equities at 20yo, and 20% in equities at 60yo.
What if you retire at 50 ?Brave Fart said:
My pension is a bog standard Aviva defined contribution scheme, and over the last year I have fallen in to a routine of checking the fund value regularly on line. I do not manage the funds in any way - I leave that to the fund managers at Aviva!
I don't mind equity risk since I also have cash savings and own two properties. I have zero debt.
Thing is, it just keeps going up - about 20% in the last year. The fund is invested 80% in global equity, only 4% UK equity, then bonds and cash; I semi-retired recently and no longer contribute since I'm in my mid fifties.
I have a few questions for the wise owls of PH:
Similar here with a reasonable chunk.I don't mind equity risk since I also have cash savings and own two properties. I have zero debt.
Thing is, it just keeps going up - about 20% in the last year. The fund is invested 80% in global equity, only 4% UK equity, then bonds and cash; I semi-retired recently and no longer contribute since I'm in my mid fifties.
I have a few questions for the wise owls of PH:
- Am I making the mistake of short-termism, and am simply seeing a short term bubble?
- Why does the fund keep growing - is it because of the global economy?
- Any opinions on how long this can continue (I know no-one has a crystal ball)?
- Is there any way of "locking in" these recent gains?
- Should I just leave it alone, since I'm not drawing down yet (and won't for a few years yet)?
I'm not so sure global equities are bad - if a proper spread, it may be the best 'spread bet on equities' you can possibly get - see http://www.kroijer.com for more reasoned analysis on this, where the fella strongly (& reasonably) recommends ALL your equity investments to be global....
I'd agree about thinking of shifting some to bonds to hedge against a fall.....I probably need to do the same.....but cannot see quite how within the Aviva tool - lowest risk there is sterling (which looks like it loses money!) followed by a few 3-rated bonds.....needs an entire day spent looking through the options!
I also agree it is a bit of a bubble...but nothing like that of cryptocurrency (IMHO!).....I'd personally be surprised if any 'correction' went over 20% in the next couple of years. There, that is my crystal ball, and certainly not advice!
Yipper said:
The general rule of thumb is to be roughly 100% in equities at 20yo, and 20% in equities at 60yo.
When we all had to buy annuities this was a reasonable thing to do. Now that draw down is available it makes more sense to keep enough to live for say 4 years in low risk investments and the rest in whatever you feel comfortable with. Given the low rate of return in cash and bonds you are really only left with property or equities. Unless you're a more sophisticated investor, in which case you'll be knee deep derivitives, hedge funds etc.Gassing Station | Finance | Top of Page | What's New | My Stuff