Pension fund v Coronavirus

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McGaggs wrote: »

Why are you transferring your pension to a broker?

Being made redundant next Friday (we knew it was coming so no shock)
The pension scheme is being closed down, I am not staying with the current company, Mercer, but transferring to another financial company to manage..

Jim2007

Lex Luthor wrote: »

I dont have access to financial advisers that they have, they are being paid to manage a fund but also keep an eye on markets

You had access to the exact same information, because there was none!

Comic Book Guy

Not a pension but I have a long term savings plan that's invested at medium risk in equities etc with Bank of Ireland.
Obviously it's taking a hammering at the moment. Just wondering should I reduce the monthly amount going into it for the forsee able and leave the balance there long term and maybe just redirect the direct debit into a medium term savings account?

Henry Ford III

Comic Book Guy wrote: »

Not a pension but I have a long term savings plan that's invested at medium risk in equities etc with Bank of Ireland.
Obviously it's taking a hammering at the moment. Just wondering should I reduce the monthly amount going into it for the forsee able and leave the balance there long term and maybe just redirect the direct debit into a medium term savings account?

If you don't need the money now I'd carry on investing as the fund will inevitably recover and your monthly contributions are buying cheap units at present.

Jim2007

Comic Book Guy wrote: »

Not a pension but I have a long term savings plan that's invested at medium risk in equities etc with Bank of Ireland.
Obviously it's taking a hammering at the moment. Just wondering should I reduce the monthly amount going into it for the forsee able and leave the balance there long term and maybe just redirect the direct debit into a medium term savings account?

People invest in these kinds of funds using what is called the dollar cost averaging strategy, the idea is that you invest the same amount of money every time period regardless of the unit price. The idea is that when the price is down as now, then you will get to buy more units in the fund.

So assuming that the fund is appropriate for your lifestyle and you have no urgent need for the cash in the next five years or so, then continue to invest... eventually things will turn and you will get a big bounce.

The J Stands for Jay

Comic Book Guy wrote: »

Not a pension but I have a long term savings plan that's invested at medium risk in equities etc with Bank of Ireland.
Obviously it's taking a hammering at the moment. Just wondering should I reduce the monthly amount going into it for the forsee able and leave the balance there long term and maybe just redirect the direct debit into a medium term savings account?

You should increase the amount you pay in and benefit from lower unit prices.

thebourke

down 9k since i last checked my pension value in february

anewme

thebourke wrote: »

down 9k since i last checked my pension value in february

I think mine is down about 50-60K, jaysus.

NIMAN

NIMAN wrote: »

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

So plucked up the courage and had a look tonight.

Down 13%-ish.

hobie21

I moved mine to a cash fund because i believe worse is yet to come. So many things could trigger more massive losses in the fiinancial sector. 80 emerging market economies are begging for an IMF bailout now. Without it they default on their debts. These losses have to be crystalized somewhere. Probably at large US financial institutions. Then you have US REIT, with tenants not paying rents, massive debts cannot be services. Who provided the loans for these property purchases, and we're talking billions in loans. International financial institutions. Another bailout of the financial sector by taxpayers would be unpalatable. I'm 100 percent in cash here and applying for a loan today to pick up bargain stocks and efts when dow goes to 16k, the again at 13k

pwurple

Comic Book Guy wrote: »

Not a pension but I have a long term savings plan that's invested at medium risk in equities etc with Bank of Ireland.
Obviously it's taking a hammering at the moment. Just wondering should I reduce the monthly amount going into it for the forsee able and leave the balance there long term and maybe just redirect the direct debit into a medium term savings account?

Do you think stock is undervalued now, or overvalued?

I think the market is as low as I have seen it in a decade, so I am pumping up my buying, in pharma in particular. I expect it to recover. Some sectors do extremely well in a crisis. Orange juice futures are rocketing for example.

If you expect it to continue to fall, stop buying,

riddles

hobie21 wrote: »

I moved mine to a cash fund because i believe worse is yet to come. So many things could trigger more massive losses in the fiinancial sector. 80 emerging market economies are begging for an IMF bailout now. Without it they default on their debts. These losses have to be crystalized somewhere. Probably at large US financial institutions. Then you have US REIT, with tenants not paying rents, massive debts cannot be services. Who provided the loans for these property purchases, and we're talking billions in loans. International financial institutions. Another bailout of the financial sector by taxpayers would be unpalatable. I'm 100 percent in cash here and applying for a loan today to pick up bargain stocks and efts when dow goes to 16k, the again at 13k

Which ETF’s are you considering and how can they be purchased?

Thanks

hobie21

Also as everyone focuses on the US stockmarket nobody is thinking what europe will look like after this. Italy was on the brink of bankrupcy BEFORE this. Italy's economy is to big to bail out, as is Spains. The aftermath of this could make 08 look like a mild contraction.

NIMAN

I have my pension with Aviva in the UK.

Online I think I can switch my pension around different risk categories.

Does anyone know how long this would take to come into effect if I went today and tried to move it to least risky?

hobie21

NIMAN wrote: »

I have my pension with Aviva in the UK.

Online I think I can switch my pension around different risk categories.

Does anyone know how long this would take to come into effect if I went today and tried to move it to least risky?

Normally within 24 hours. But I've had problems getting a response from my provider Irish Life these days. I think they are having problems with nervous people moving into safer funds. I'd say at the moment a couple of days to switch.

killbillvol2

hobie21 wrote: »

I moved mine to a cash fund because i believe worse is yet to come. So many things could trigger more massive losses in the fiinancial sector. 80 emerging market economies are begging for an IMF bailout now. Without it they default on their debts. These losses have to be crystalized somewhere. Probably at large US financial institutions. Then you have US REIT, with tenants not paying rents, massive debts cannot be services. Who provided the loans for these property purchases, and we're talking billions in loans. International financial institutions. Another bailout of the financial sector by taxpayers would be unpalatable. I'm 100 percent in cash here and applying for a loan today to pick up bargain stocks and efts when dow goes to 16k, the again at 13k

I'm no financial guru but it would strike me that cashing out at a loss and then borrowing money to gamble on stocks is the definition of impudence.

I think I'll take the rest of your analysis with a large grain of salt.

hobie21

killbillvol2 wrote: »

I'm no financial guru but it would strike me that cashing out at a loss and then borrowing money to gamble on stocks is the definition of impudence.

I think I'll take the rest of your analysis with a large grain of salt.

Moved from stocks and property fund to cash 8 months ago. Good timing. I couldn't care less how you take my opinion.

Jim2007

pwurple wrote: »

Do you think stock is undervalued now, or overvalued?

I think the market is as low as I have seen it in a decade, so I am pumping up my buying, in pharma in particular. I expect it to recover. Some sectors do extremely well in a crisis. Orange juice futures are rocketing for example.

If you expect it to continue to fall, stop buying,

Don't confuse value with price. Just because the price is as low as you have seen it does not mean anything when it comes buying stocks.

NIMAN

hobie21 wrote: »

Normally within 24 hours. But I've had problems getting a response from my provider Irish Life these days. I think they are having problems with nervous people moving into safer funds. I'd say at the moment a couple of days to switch.

Thanks for that.

Problem I have, and I would guess many other pension holders would have, is that they know little about them and just rely on pension companies to look after their money for them and do their best!

I was just looking at my pension online. It went up £3k since I checked it 24hrs ago. But I am at Risk level 5 out of 7.

I do seem to be allowed to select to move it, but looking through the other funds available, I wouldn't have a baldies, other than taking them on their risk level. Then again, these risk levels may have been determined in more normal times, do they still stand?

There are 11 different funds I could move to.
4 are also 5/7 for risk
4 are 4/7 for risk
2 are 3/7
1 is 1/7

I looked at the main breakdown of the different funds, and again I'm seeing things that really don't mean a lot to the average punter.

UK Equities
Developed Euro Equities
North American Equities
Japanese Equities

UK Gilts

International Bonds
UK Corporate Bonds

Certificates of Deposit
Gov Backed Repurchase Agreements
Commercial Paper

Industrial / Warehouse
Town Centre Offices
Retail warehousing (perhaps this section might be taking a major it??).

killbillvol2

NIMAN wrote: »

Thanks for that.

Problem I have, and I would guess many other pension holders would have, is that they know little about them and just rely on pension companies to look after their money for them and do their best!

I was just looking at my pension online. It went up £3k since I checked it 24hrs ago. But I am at Risk level 5 out of 7.

I do seem to be allowed to select to move it, but looking through the other funds available, I wouldn't have a baldies, other than taking them on their risk level. Then again, these risk levels may have been determined in more normal times, do they still stand?

There are 11 different funds I could move to.
4 are also 5/7 for risk
4 are 4/7 for risk
2 are 3/7
1 is 1/7

I looked at the main breakdown of the different funds, and again I'm seeing things that really don't mean a lot to the average punter.

UK Equities
Developed Euro Equities
North American Equities
Japanese Equities

UK Gilts

International Bonds
UK Corporate Bonds

Certificates of Deposit
Gov Backed Repurchase Agreements
Commercial Paper

Industrial / Warehouse
Town Centre Offices
Retail warehousing (perhaps this section might be taking a major it??).

You're asking someone for advice who says he's applying for a loan to buy stocks. Let that sink in.

NIMAN

It was more a generic post to the thread really, if anyone has any opinions?

Jim2007

NIMAN wrote: »

It was more a generic post to the thread really, if anyone has any opinions?

Opinions on what exactly? You posted a list of assets classes, no even instruments and no indication of what you are trying to achieve nor even a lifestyle profile.

Right now my impression would that there is a good chance you’ll loose money over the next five to ten years, because you seem to lack direction.

NIMAN

Jim2007 wrote: »

Opinions on what exactly? You posted a list of assets classes, no even instruments and no indication of what you are trying to achieve nor even a lifestyle profile.

Right now my impression would that there is a good chance you’ll loose money over the next five to ten years, because you seem to lack direction.

As you may have read when I posted earlier that I am one of those people who have a managed pension and know little about them.

I was only asking for some hints if it would be a good idea to temporarily move my funds to one with a lower risk. I wasn't looking for condescending responses.

If I lose money over the next 5 to 10 years then it will likely be Aviva fund managers who will have lost it and not me.

I'll leave this thread now.

snoopboggybog

And this is why i will never sign up for a pension and just save my money instead.

Jim2007

NIMAN wrote: »

As you may have read when I posted earlier that I am one of those people who have a managed pension and know little about them.

I was only asking for some hints if it would be a good idea to temporarily move my funds to one with a lower risk. I wasn't looking for condescending responses.

If I lose money over the next 5 to 10 years then it will likely be Aviva fund managers who will have lost it and not me.

I'll leave this thread now.

You have not provided us with any information that would enable to provide any meaningful commentary:

- We have no idea of you age or life expectancy
- No idea of what actual investing options you have
- No idea of your objective: early retirement, normal, work as long as possible

And yet you expect us to give a meaningful commentary.....

It is just not possible.

Jim2007

snoopboggybog wrote: »

And this is why i will never sign up for a pension and just save my money instead.

And that is the biggest mistake you can possibly make. There are several studies on this that all concluded that it is a very risky approach contrary to what many people believe.

In the first place your savings are very unlikely to reach a sufficient level to provide a reasonable pension unless you are able to save about 25% or more.

The second big issue is going to be inflation. The economy is going to take a big hit over the next five years or more so productive will fall, while cash is being pumped into the economy, so inflation is almost a certainty. This will eat into the purchasing power of your savings.

And the third issue is pension reform. The current pay as you go system is unsustainable and will have to be replaced. Most likely by the typical European three pillar system where the main pillar will be based on a private pension financed by the individual and their employer.

At the end of the day it is up to you, but I would consider your approach to be a very high risk strategy.

snoopboggybog

Jim2007 wrote: »

And that is the biggest mistake you can possibly make. There are several studies on this that all concluded that it is a very risky approach contrary to what many people believe.

In the first place your savings are very unlikely to reach a sufficient level to provide a reasonable pension unless you are able to save about 25% or more.

The second big issue is going to be inflation. The economy is going to take a big hit over the next five years or more so productive will fall, while cash is being pumped into the economy, so inflation is almost a certainty. This will eat into the purchasing power of your savings.

And the third issue is pension reform. The current pay as you go system is unsustainable and will have to be replaced. Most likely by the typical European three pillar system where the main pillar will be based on a private pension financed by the individual and their employer.

At the end of the day it is up to you, but I would consider your approach to be a very high risk strategy.

And at what age can I start drawing on the pension? That is my main concern?

I'm 28, not in Dublin on 42K. Expect to be at least 50K in the next three years.

If I'm right in thinking its 60 years of age. 32 years is a long time to have money tied up in something you can't touch.

I don't need a huge amount of money when I retire and I'm currenty saving 1000 a month.

Jim2007

snoopboggybog wrote: »

I don't need a huge amount of money when I retire and I'm currenty saving 1000 a month.

Well first of all you may not get to be able to work until you are 60 for a start. A good friend of mine did not get to work past 32, he was a painter and one evening before finishing up his day's work he hopped up on a table to change a light bulb and the thing collapsed leaving him paralysed from the waste down...

A neighbour of mine here in Switzerland had an accident in the factory he worked in and was invalided out at 42. I know at 28 you think these things won't happen you, but the do happen to people.

Another thing is that you many not be in the best of health when you are 60 and need to spend more money on additional meds etc not covered by health insurance, home help etc...

And of course if you are fit and health in early retirement you are going to want to do stuff rather than sit at home watching the grass grow.

You should be realistic and assume that you will need about 70% of your income while employed to continue to enjoy the lifestyle you had while working.

snoopboggybog wrote: »

If I'm right in thinking its 60 years of age. 32 years is a long time to have money tied up in something you can't touch.

The whole point of saving up is to have it at retirement, so why would you go spending it before then? What are you expecting to live of in retirement.

In not being able to touch it is one of the best features! People always find a good reason to dip into their pension fund if allowed, oh they always intend to pay it back but the never do. A private study by Credit Suisse, found that in the land of the dollar bill, where self directed pension are big, the average couple at retirement had net worth of just $22,000 where as the average Swiss couple had around $500,000. The main factor was the pension, which by law the Swiss must contribute from age 25 and cannot touch it until they reach retirement age.

pwurple

Jim2007 wrote: »

Don't confuse value with price. Just because the price is as low as you have seen it does not mean anything when it comes buying stocks.

Fine. I will reword. I think some pharma stocks are good "value" at the moment.

Jim2007

pwurple wrote: »

Fine. I will reword. I think some pharma stocks are good "value" at the moment.

It would seen that you are still confusing the two... you may think they are at a good price... but unless you have done some kind of valuation such as DCF or SOP you cannot say if the price represents good value.