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I know tj will shoot me down here for the wealth I have... 😉
I just made the mistake of idly checking on things this lunchtime.
2 years ago we sold our buy to let and saved £40k in a pair of ISA's, ready for being able to pay down our fixed rate 1.17% mortgage in late 2026, maybe even get rid of it by 2027 depending on growth of ISA's. I am currently down £2.8k - and dipping it seems again. Wealthify Sustainable and Clim8 average risk funds.
My pension has struggle to get above where it was in early 2021 - and again seems to be dipping down. Standard Life, average risk funds from sustainable fund selection.
On both scores, that is a heavy loss to recover from. 🙁
I *know* that a) I need to wait the time out, as generally over time things come good and b) that is the risk.
Anyone else feeling bruised by investment losses as well?
I changed to Interactive Investor for my pension in Jan and decided on my own mix of global / US based funds, was feeling quite smug as was up about 7% at one point.
Lost nearly all of it all again since!
ISA is just barely up in last 3 years. Wondering whether to just pay a load of the mortgage off instead.
Of course there are fluctuations, but take a 10 or 20 year view on the pension instead and see how you feel.
I know tj will shoot me down here for the wealth I have… 😉
It is at moments like this that defined-benefit pensions really show their value! I can tell you with a high degree of confidence that pension values must be about to plummet again - Mrs P has just chucked extra cash in hers!
I'm in the same boat Matt. My much better half is a pensions actuary, and it is always a case of pensions being long term (30+ year) investments. It is getting squeakier as I get closer to retirement. At least 10 years away now, but the last few years are not doing me any favours. All we can do is keep investing at our own personal acceptable risk level. I'm hoping fir many years post retirement, but fully intend to equity release at some point to keep me in some sort of comfort when I'm ageing. It is really scary looking at both my parents and my in laws and how their standard of living is gradually being eroded though.
Of course there are fluctuations, but take a 10 or 20 year view on the pension instead and see how you feel.
I hope to bloody retire in 15 years time....Looking at a pension that is at the same value as it was in Jan 2021, despite a *lot* of contributions since, is just depressing. Even if things do pick up, that is a hole (with real dips at Ukraine invasion, Tory incompetence, pandemic etc) which needs filling before I am back in 'positive'.
It is at moments like this that defined-benefit pensions really show their value!
Indeed - but mrs_oab's teaching pension is defined by part time work as a mother, and about to be cut short as she is likely to retire on ill-health grounds shortly.
Wealthify Sustainable and Clim8 average risk funds.
I have a mix of sector funds and low cost trackers (FTSE, S&P, DAX, gold) in my ISA. The trackers have done a country mile better.
YMMV.
I have taken a different approach and decided not to look anymore, it doesn't solve the problem but it's not as depressing!
Of course there are fluctuations, but take a 10 or 20 year view on the pension instead and see how you feel.
They will be fine in 10-20 years.... unless they're not.
Quite a lot of folk who are immediately approaching retirement have been utterly shafted by a combo of: (a) the mini budget-induced bond crash; and (b) pension funds 'lifestyling' peoples' pots into supposedly safter bond-heavy funds as they approach drawdown.
https://www.theguardian.com/money/2023/mar/11/pensions-retiring-losses-ftse-aviva-value
@hooli - good game plane. I don't check the price of my house every 10 minutes! I certainly don't check my crypto holdings regularly anymore! 😀
I think most are in the same boat as you OP.....i don't think we have any other choice but to surf it out AND if you have any surplus cash you can always pick up cheaper shares that you like the look so you can potentially recoup some lost ground when things pick...probably! 😉
On a side note, pensions are just one tool to retirement now. I think these days with the volatility out there, political incompetence etc you need a decent and wide spread of assets. Worth exploring - Money Week* do some great articles on diversification and retirement planning. *i don't work for Money Week!
I think most people are in the same boat. The way I look at it, to make me feel better at these times, is I am still making money due to tax relief/company contributions. Eg for every €60 I put in my pension gets €200, so unless that €200 falls below €60 I feel I am up.
its been a turbulent few years what with covid, ukraine, lizz truss and now a bank no one had heard off until friday,
i've book lost 12% since friday by 830am this morning, recovered a little since then up 1-2% today.
they'll be many peaks and troughs before your mortgage requires money in 2026.
i was gonna stick £10k on lloyds to pay down my mortgage in may23, decided it was too risky and they've dropped 5p to 47p since. risk is fine but needs reducing the nearer it is till the moneys required..
see these troughs as a buying opportunity and plough in more
I think we’re all in for an extended underwhelming period for most financial assets. Inflation at higher levels than have prevailed for the last decade or so is going to lead to interest rates at levels which prevailed pre 2008 financial crisis. And that is a problem for many financial assets and businesses. I’m not certain that markets will actually crash much but in real terms I am pretty certain they are going to disappoint.
Investments & pensions - long term planning horizon.
Expect there to be unexpected events - there are always are.
What can you do about it? Nothing which is 'guaranteed' to deliver; you could move investments into a different product mix but...will they deliver more/better?
Reading the OP, as laudable as using sustainability funds is, the whole renewables/sustainable arena was one of the most over-priced when markets peaked in 2021 - there was a lot of money chasing some dubious (and good) schemes at very silly prices; they could have the longest periods on the sidelines.
Your property related funds might be best placed on extended periods of cash deposits (currently over 4%) within a tax free ISA wrapper; dull but will give a more certain positive return against your fixed interest borrowings. IANIFA.
I like, and take, @hooli approach and rarely look. It just struck me as a bad lot of months since I last looked.
Sustainable funds: that is interesting about them being over-priced. However, I feel that I want to invest in things that are broadly positive. I am not so deep green as to only use Triodos, and the funds I hold are pretty simple and I *think* not hugely managed.
Your property related funds might be best placed on extended periods of cash deposits
I am wondering if I need to save into some fixed savings accounts at the moment - +3.5% is better than -10%....and more than my mortgage of 1.17%...
I am wondering if I need to save into some fixed savings accounts at the moment – +3.5% is better than -10%
you dont need to go for fixed savings accounts at the moment to get those kinds of interest rates, you can get 3.2% on an instant access account with Tandem bank
Moneysavingsexpert.com suggests Virgin money at over 4% fixed rate if you are prepared to leave it alone for 2 years.
I switched into cash recently as getting decent returns now for no risk. Still way behind inflation, will buy back investments the next downturn.
It's a rollercoaster though, deffo focus on long term, and diversify.
The teaser accounts pay well, NatWest 6%, building socs 5,%, takes a bit of managing but worth it.