Pension pot taken a hammering

[PositronicRay]

Looks like mine is about 10% down since the beginning of the year (cautious elevate)

Is this to be expected given what is going on in the world?

I don't often look normally it just chugs along doing ok, providing a small income, but I've a meeting with my IFA next week so thought I'd take a peek.

[dingg]

I'd be a lot happier if mine was only 10% down this year........

[gotoPzero]

Yep 10-20% down can be expected at the moment from the highs of the new year depending on what you are invested in.

Just how it will go over the next 6 months no one knows but I have been quite impressed with VLS100 its held up quite well given whats going on. I have VUSA too and thats not quite as good!!

My SIPP is back in cash atm, I am going to start drip feeding it back in soon I think.

[PositronicRay]

Thanks chaps.

I've been drawing down approx 4,% p.a. for the last 10yrs, it's always kept pace. Until now.

[deckster]

Yes -10% is a good result this year! But hopefully, unless your fund managers are complete halfwits, it will have performed significantly better than that over the past few years.

[PositronicRay]

deckster said:

Yes -10% is a good result this year! But hopefully, unless your fund managers are complete halfwits, it will have performed significantly better than that over the past few years.

Yes it's been going momentum nicely over the last 10yrs despite my 4% annual drawdown. Probably 15-20% up since 2012 so I'll take that as a win.

[pac1uk]

Me to, SIPP was +18 at start of year now -16

Tough times at the moment, so much bad news reported. Who would have predicted all the crap that is going in the world at the start of the year. Worlds gone mad since COVID lockdown.

[Derek Chevalier]

gotoPzero said:

Yep 10-20% down can be expected at the moment from the highs of the new year

10% yes, especially as bonds have taken a hit, but I'm not sure why anyone would think 20% is expected.

[Derek Chevalier]

deckster said:

Yes -10% is a good result this year!

It's should be "average", in the sense this is what falls the "average" 60/40 investor has experienced.

[dmahon]

How do you guys deal with it psychologically? Pretty depressing to see all of this money evaporating even though I’m 15 years out from retirement. Torn between selling out or going full Ostrich for the next few years as I do really struggle with the swings mentally

[PositronicRay]

dmahon said:

How do you guys deal with it psychologically? Pretty depressing to see all of this money evaporating even though I’m 15 years out from retirement. Torn between selling out or going full Ostrich for the next few years as I do really struggle with the swings mentally

I rely on annual soothing noises from my IFA.

[V8covin]

My pot is worth less than the contributions

[xeny]

V8covin said:

My pot is worth less than the contributions

Is it either an idiosyncratically invested or pretty young (so not many years of investment returns) pot to achieve that?

[anonymous-user]

Been thinking about putting mine in cash, feels like something big on the horizon. Just my gut feel, I have no evidence, data or proof of this.

[Derek Chevalier]

dmahon said:

How do you guys deal with it psychologically?

I find this is what works:

At the outset:

1. Have a robust financial plan in place which helps:
a). To keep the focus on the long term when we experience short term volatility
b). To know that the plan can likely cope with far worse than current market volatility and there is nothing to worry about.

2. Study market history and understand what can go wrong and be as happy as you can be that you will stick with your portfolio should the worst happen (which comes back to my point around the 20% falls - effectively twice what global equities have fallen. I'd question how many are genuinely happy with that level of risk should we have a downturn such as the GFC).


Ongoing

1. "Lifeboat drills" - periodically remind yourself what can go wrong. e.g your £xxxk portfolio could be worth £yyy a year later

https://www.mavenadviser.com/podcast2/investment-l...

2. Check your balance once a year

3. Ignore the Negative Events World Service

[alock]

dmahon said:

How do you guys deal with it psychologically? Pretty depressing to see all of this money evaporating even though I’m 15 years out from retirement. Torn between selling out or going full Ostrich for the next few years as I do really struggle with the swings mentally

I'm 15 years from retirement as well. The markets being low is a great thing. Put as much money as you can in now. Buy as much as possible while the price is low.

I would be more worried if they were high, or if I was already retired.

[xeny]

dmahon said:

How do you guys deal with it psychologically? Pretty depressing to see all of this money evaporating even though I’m 15 years out from retirement. Torn between selling out or going full Ostrich for the next few years as I do really struggle with the swings mentally

To be honest, if you're sensible with asset allocation and strategy, I don't think looking frequently helps either performance or mental health, maybe once or at most twice a year

You're steering a narrowboat in a canal, not a twitchy car on cold tyres around a short circuit.

[VR99]

alock said:

I'm 15 years from retirement as well. The markets being low is a great thing. Put as much money as you can in now. Buy as much as possible while the price is low.

I would be more worried if they were high, or if I was already retired.

Definately this. I am guilty of looking at my pension far too often....but assuming monthly contributions and with 15+ years from retirement you ideally want more purchases at the lower prices during the accumulation phase....on the basis that markets tend to rise over longer periods.

[bitchstewie]

dmahon said:

How do you guys deal with it psychologically? Pretty depressing to see all of this money evaporating even though I’m 15 years out from retirement. Torn between selling out or going full Ostrich for the next few years as I do really struggle with the swings mentally

One of the biggest changes I've made recently is shifting a chunk to passives.

The rest is in historically decent performing "wealth preservation" funds and I just don't look as often as I used to.

With the passives I figure I'm buying the global stock market.

Psychologically that seems much easier than fretting about whether global growth or small cap value or whatever else is the right place to be.

The plan is to just keep buying that.

Of course everybody has a plan until they get punch in the mouth

[Boringvolvodriver]

PositronicRay said:

dmahon said:

How do you guys deal with it psychologically? Pretty depressing to see all of this money evaporating even though I’m 15 years out from retirement. Torn between selling out or going full Ostrich for the next few years as I do really struggle with the swings mentally

I rely on annual soothing noises from my IFA.

This! Every time I say I am a bit concerned, he tells me that it is a long term investment and that I don’t need to draw on it just yet (4 years into retirement and living off savings and Tax Free Lump sums along with Income from a Final Salary Pension)

That said whilst down 8% from peak (been worse) overall seen 8% growth in 4 years. Not great but in line with my cautious projections when I was working out whether I could afford to retire……….