Wife is getting nervous

[Drawweight]

I’ve got about £100k in a low risk investment account through a FA.

This provides a percentage of my total pension through drawdown ( fortunately not a large percentage but still)

Obviously recently the value had dropped quite a bit and my OH is panicking and talking about withdrawing it and sticking it all in premium bonds.

I’m trying to reassure her but knowing not a lot about the finance market I’m struggling to put up a rational argument.

[RogerDodgerSuperTodger]

That’s a good way to lock in a loss I suppose!

[drmotorsport]

Patience is a virtue with investments, most stuff seems to be down atm. If you need the cash soon, then yes start withdrawing it. If you can wait then thats usually the best option. Once the world gets over Russia being dicks, and China back to work after pandemic, then things will rise again.

[xeny]

Drawweight said:

I’ve got about £100k in a low risk investment account through a FA.

I’m trying to reassure her but knowing not a lot about the finance market I’m struggling to put up a rational argument.

isn't providing the reassurance part of the reason for paying for an FA? They'd presumably have given a "this will go up and down a bit" warning when they sold you the product?

[FatboyKim]

'What falls will rise again. If you can afford to ride it out, then do nothing rather than panicking and selling'... is what we are telling a lot of our clients.

It does no harm putting up to £50k into premium bonds.

[Jurgen Schmidt]

If your investment time horizon is indefinite, Premium Bonds is a guaranteed way of making a loss

[LeoSayer]

When do you need the money?

[Mr Whippy]

All depends what you’ve “lost”

£500?
£5,000?
£20,000?

PBs haven’t moved their prize rates up and in line with base rate either.

[Mr Whippy]

drmotorsport said:

Once the world gets over Russia being dicks, and China back to work after pandemic, then things will rise again.

Unless this is new paradigm stuff?

Recall Liz Truss reiterating this is a price worth paying wrt getting off cheap Russian energy.

And also similar posturing wrt no such thing as neutrality in the “war on Putin” or “war against anti-democracy” or whatever they’ll call it… and China being unpopular because they won’t condemn Putin.


And globalisation clearly peaking and now perhaps unwinding somewhat.

And ESG.
And big funds now controlling how huge sums of people’s money gets invested.


There is a big change occurring imo, not just a bump in the status quo road.

[TwigtheWonderkid]

Jurgen Schmidt said:

If your investment time horizon is indefinite, Premium Bonds is a guaranteed way of making a loss

How is premium bonds a "guaranteed" way of making a loss? He could win one of the big prizes.

[Jurgen Schmidt]

TwigtheWonderkid said:

Jurgen Schmidt said:

If your investment time horizon is indefinite, Premium Bonds is a guaranteed way of making a loss

How is premium bonds a "guaranteed" way of making a loss? He could win one of the big prizes.

Inflation

[worsy]

I've lost well over 25k on my ISA from it's high late last year. It is going nowhere though because the money is a rainy day fund and ultimately for retirement in 10+ years. As the first reply says, withdrawal now makes the loss permanent.

[JapanRed]

Above posts are all correct. At the minute it’s a loss on paper. Withdrawing makes it a real loss. If you can afford to leave it in then do so. If you can afford to buy even more shares at the new discounted rate then even better.

[DonkeyApple]

Drawweight said:

I’ve got about £100k in a low risk investment account through a FA.

This provides a percentage of my total pension through drawdown ( fortunately not a large percentage but still)

Obviously recently the value had dropped quite a bit and my OH is panicking and talking about withdrawing it and sticking it all in premium bonds.

I’m trying to reassure her but knowing not a lot about the finance market I’m struggling to put up a rational argument.

You have to know what you own before you can form a sound view on the current and potential value of what you own.

What are your holdings?

[LooneyTunes]

JapanRed said:

Above posts are all correct. At the minute it’s a loss on paper. Withdrawing makes it a real loss. If you can afford to leave it in then do so. If you can afford to buy even more shares at the new discounted rate then even better.

The first part I agree with, the latter not so much.

If you've made a loss on paper then the options are:
Liquidate, crystallise the loss, and then invest in ways that will either see future gains or minimise further downside/losses; or
Hold your position in the view that you'll see a rebound over whatever investment horizon you work with.

BOTH of these requires a view on whether where/how the money is invested is the most appropriate place for it into the future.

[Drawweight]

I’ve come into a bit of money which I stuck in premium bonds and am using this to augment the rest of my pensions and have actually paused that drawdown so it should be a couple of years before I need to actually touch it again.

My instinct is just to let it ride and hope it picks up by then.

[okgo]

Bit peculiar for it to be so down isn't it unless you invested really quite recently?

[craig1912]

okgo said:

Bit peculiar for it to be so down isn't it unless you invested really quite recently?

I’d agree particularly as the OP said it was low risk.

I guess we need to know by how much it has dropped and what he/his FA considers low risk.

[okgo]

I've got an investment in Vanguard LS60 that I made in March 2021 that is single digit down right now, I think about 5 or so percent. I wouldn't even say that is particularly low risk so I'd be asking some tough questions if I were him. What is it in, when and how was it bought and how much are the robbing gits taking from me in fees which is possibly a factor..?

[bitchstewie]

What's the investment?