Pension fund v Coronavirus

Argo foc yourself

Have a small pension plan with Irish life most of funds are risk 6, high level. Would you change to lower risk like as in bonds, risk 3. or just ride out the storm of this corona?

killbillvol2

Argo foc yourself wrote: »

Have a small pension plan with Irish life most of funds are risk 6, high level. Would you change to lower risk like as in bonds, risk 3. or just ride out the storm of this corona?

If you're asking that question I'd love to know who advised you to invest in high risk funds.

Pension funds are long term investments. You ride it out.

Grassey

Too late to switch now, should have done it 3 weeks ago. Just ride it out now otherwise you lock in the loss.

Jim2007

Argo foc yourself wrote: »

Have a small pension plan with Irish life most of funds are risk 6, high level. Would you change to lower risk like as in bonds, risk 3. or just ride out the storm of this corona?

It is irrelevant. What is relevant is you age and health. If you are within 10 years of retirement you should not have been in those funds in the first place.

franglan

In a similar boat - early 30’s sizable percentage is in a diversified growth fund. Ride it out and see how the market always recovers or move to bonds or cash to see how this plays out over next six months?

The J Stands for Jay

franglan wrote: »

In a similar boat - early 30’s sizable percentage is in a diversified growth fund. Ride it out and see how the market always recovers or move to bonds or cash to see how this plays out over next six months?

Move to bonds and cash and crystallise losses?

franglan

McGaggs wrote: »

Move to bonds and cash and crystallise losses?

Bail out now rather than later if/when we see further downturns. No one has a crystal ball unfortunately.

Jim2007

franglan wrote: »

Bail out now rather than later if/when we see further downturns. No one has a crystal ball unfortunately.

You are right now one has a crystal ball, but what I can tell you for certain is that there will be several ups and downs of the OP's remaining 35 years or so as a pension investor and if he tries to time the market on such issues he will be extremely lucky to end up with the money he has put in.

Henry Ford III

franglan wrote: »

Bail out now rather than later if/when we see further downturns. No one has a crystal ball unfortunately.

The funds will recover eventually. Trouble is even though you may have gotten out before the bottom you'll almost certainly miss out on at least the first stages of the bounceback.

Macker1

My pension value has took an battering over the last few weeks with a significant drop of over 20% in value. I'm nearly 51 so have a good few years to go. Very shocking to see so much of a drop in such a short space of time over this damn virus.

Staying put anyways for the rebound...

dennyk

Selling low and buying high isn't a good investment strategy. If you're retiring in the next couple years, well, you shouldn't have been all-in on equities in the first place at that point; expensive lesson learned. If you're many years from retiring, then just hold and wait it out; the markets will recover long before you'll be cashing in (and will no doubt go down and up and down and up and down and up etc. many more times in the meantime, but overall the trend since the stock market was a thing has been that it will grow overall in the long term...).

waxmelts2000

Just logged onto my pension account E15,000 lost /gone over the last 3 weeks or so...thats a shock to see. I'm not too familiar with pensions etc just pay monthly along with my employer

Jim2007

Valyawl wrote: »

Just logged onto my pension account E15,000 lost /gone over the last 3 weeks or so...thats a shock to see. I'm not too familiar with pensions etc just pay monthly along with my employer

Well it should not be a shock, if you have been reading the newspapers of the past while. But you are really better of not to look at these time, simply because you may react badly....


The best you can do is make sure your asset allocation was right for your age bracket and then sit it out.

Jim2007

Macker1 wrote: »

My pension value has took an battering over the last few weeks with a significant drop of over 20% in value. I'm nearly 51 so have a good few years to go. Very shocking to see so much of a drop in such a short space of time over this damn virus.

Staying put anyways for the rebound...

Well you may be have about 5 or 6 years before you'd need to start moving into a more defensive position.


I'm not sure if I should mention this... but... depending how you intent to take the pension in the long run, it is a good opportunity to consider some blue chip stocks with a good dividend as part of your long term pension portfolio.

coylemj

Jim2007 wrote: »

I'm not sure if I should mention this... but... depending how you intent to take the pension in the long run, it is a good opportunity to consider some blue chip stocks with a good dividend as part of your long term pension portfolio.

If you want to avoid sleepless nights, let your pension be managed by professionals in funds. I would not advise anyone to be selecting individual stocks. Don't see how you can micromanage a pension fund anyway.

Pick a fund with a risk profile that matches where you are in the age spectrum - go for higher risk managed fund with >10 years to retirement, then gradually move into more cautious/boring funds to cushion you from major market downturns when you're on the verge of retirement.

The J Stands for Jay

coylemj wrote: »

If you want to avoid sleepless nights, let your pension be managed by professionals in funds. I would not advise anyone to be selecting individual stocks. Don't see how you can micromanage a pension fund anyway.

Pick a fund with a risk profile that matches where you are in the age spectrum - go for higher risk managed fund with >10 years to retirement, then gradually move into more cautious/boring funds to cushion you from major market downturns when you're on the verge of retirement.

I'll be thinking hard about not doing that when I get older. I suspect I will end up moving 25% of my funds to lower risk assets, and the rest to match my planned ARF asset allocation.

coylemj

McGaggs wrote: »

I'll be thinking hard about not doing that when I get older. I suspect I will end up moving 25% of my funds to lower risk assets, and the rest to match my planned ARF asset allocation.

General guidance is to shift 10% of the pot into low risk funds in each of the 10 years before planned retirement.

Macker1

Jim2007 wrote: »

Well you may be have about 5 or 6 years before you'd need to start moving into a more defensive position.


I'm not sure if I should mention this... but... depending how you intent to take the pension in the long run, it is a good opportunity to consider some blue chip stocks with a good dividend as part of your long term pension portfolio.

Pension fund is my work pension managed by Mercer. I do have another investment in a AMRF with Irish Life which is also suffering a recent drop due to COVID-19

The J Stands for Jay

coylemj wrote: »

General guidance is to shift 10% of the pot into low risk funds in each of the 10 years before planned retirement.

It doesn't make sense when I'll just have to move it back into risk assets to fund my retirement.

evosteo

Just checked the pension pot on my Irish life pension planet, mid 30s. 18% gain over the last 2 years wiped out, medium Risk fund

rdhma

Fund 21% down on a few weeks ago.

Of course any pension planning based on future contributions assumes continued employment. We are seeing only the first inklings of the COVID-19 impact there.

One month ago, the return on my pension fund [(Fund value / Contributions) - 1] was +20%.
Today, it's -1%.

I'm in early thirties so still a long long way to go and I know there'll be ups and downs but it's still a bit of a shock seeing it actually loss-making!

j4vier

I just checked my pension with zurich and also experienced similar losses.

I'm in the early thirties so my funds were 100% dynamic mostly in equities.

My question for others with other pension funds:

Does your pension provider give you control through their online portals on how to change your fund investment? For example if you wanted to change from equity investments to bonds, how would you go about it? Do you need to ring them, give them a week notice or something?

I never changed my plan with zurich so not sure how it's done, certainly won't be changing them now but it's good to learn these things

franglan

j4vier wrote: »

I just checked my pension with zurich and also experienced similar losses.

I'm in the early thirties so my funds were 100% dynamic mostly in equities.

My question for others with other pension funds:

Does your pension provider give you control through their online portals on how to change your fund investment? For example if you wanted to change from equity investments to bonds, how would you go about it? Do you need to ring them, give them a week notice or something?

I never changed my plan with zurich so not sure how it's done, certainly won't be changing them now but it's good to learn these things

Aon manage my company pension. Online platform and you can change your investment fund percentages online. That then goes to their fund manager. Takes roughly 48 hours to change over on online platform as they have to take end price of funds at day of change.

dennyk

Folks who are decades away from retirement, don't panic and change your pension allocations because of the downturn. The market will recover at some point, and you haven't actually lost any money...unless you change your allocations, which means selling your equities at the current very low prices and buying bonds or other investments at relatively high prices, thus actually realising your losses.

coylemj

j4vier wrote: »

My question for others with other pension funds:

Does your pension provider give you control through their online portals on how to change your fund investment? For example if you wanted to change from equity investments to bonds, how would you go about it? Do you need to ring them, give them a week notice or something?

It varies, most companies will allow a set number of changes per annum without penalty i.e. you can switch funds based on selling and buying at the bid (or offer) price i.e. you don't get hit by the 'spread' between the bid and offer prices.

But you've already said that you are not going to switch out of equities which is the wise thing to do.

Because in case anyone else is reading this, if you lock in your equity losses now by switching to a conservative fund, the liklihood is that you will never recover the loss. Conservative/boring funds show very slow growth and are appropriate for risk-averse situations like widows and orphans and people close to retirement.

The J Stands for Jay

franglan wrote: »

Aon manage my company pension. Online platform and you can change your investment fund percentages online. That then goes to their fund manager. Takes roughly 48 hours to change over on online platform as they have to take end price of funds at day of change.

Mine is Mercer and they only switch once a month, and you need to give them at least a month's notice so it's possible a switch could take one month and 6 days...

NIMAN

Valyawl wrote: »

Just logged onto my pension account E15,000 lost /gone over the last 3 weeks or so...thats a shock to see. I'm not too familiar with pensions etc just pay monthly along with my employer

I'm afraid to log in and look:eek:

ebayissues

What if Aon liquidates some positions to cover the losses? Does anyone have inside knowledge into the risk management practises by these guys?

coylemj

ebayissues wrote: »

What if Aon liquidates some positions to cover the losses?

You don't 'cover' your losses by panic selling.

The J Stands for Jay

coylemj wrote: »

You don't 'cover' your losses by panic selling.

Yeah, you crystallise them.