Investments still declining

[Livvyliv18]

Are anyones investments showing signs of recovery yet ?My pension has lost a significant amount in the last 3 months and still seems to be going down.
This happened in first lockdown but then started to do really well so I know it can improve.
Im just starting to panic and unsure if I need to see a financial advisor to look at it.
Im not 55 for another 5 years so maybe I don’t need to panic just yet
Any advice /reassurance greatly appreciated

@Indiaplain Do not sell. You haven't lost a penny yet and you will only lose that money if you sell. Google ftse100 and look at the graph after clicking Max. See that piffling little drop near the beginning? That was the great crash of 1987. Remember all the hoo-ha about that? The dotcom crash after mid 2000 is much more severe and drawn out but it recovered, didn't it. Another big crash in mid 2008. Recovered again. March 2020 crash and a recovery. The overall trend of the graph from 1984 is upwards. I'm continuing to invest and my advice would be to hold your nerve.

Way I see it is if my vanguard investments plummet to zero, I will have much more serious things to worry about.

So if you put cash in these investments are you getting more stock for your money which will gain value in the long run

It is confusing. I put some in each month

When fund unit prices are down, it is like things being on sale. You happily brought them when they cost more, so continue buying them now they are cheaper. If you spent £100 a couple of months ago and now spend £100, the £100 now buys more units in the fund, as the unit price is lower.

Markets going down are bad for those who are needing to take out money for income. They are good for buyers, as it's a sale.

I'll fill my boots then thanks 😀

This post caused me to check mine and yes they are down about 7% from 31 Dec 2021😬 which was the highest peak on mine but overall they are up 14% from 31 March 2020 which was the lowest dip. If you do see an IFA then one of the first things they will do is ascertain your own personal capacity for risk and will tailor your plan to that. I have a risk capacity of about 6/10 which is seemingly pretty normal for a woman my age and if I remember properly about 15% is my level for starting to feel edgy. I'm not feeling edgy yet as over the past 7 years there has been growth overall.

Hold your nerve, keep drip feeding into them. Over time the markets always recover, cash loses when accounting for inflation.

Mr Money Mustache has done a rare article this week about this, he's my go-to finance guru.

www.mrmoneymustache.com/2022/05/20/2022-stock-market-crash/

We have our investments managed by an IFA using Fidelity and he told me that he expects our portfolio (which has been losing value since Dec 21) to be either at the same value or less 5% by the end of this year (as compared to Dec 21). That would be a pretty good scenario seeing as we had major gains on paper from 2020-21.

I found this quite a reassuring explanation

Thanks

It is hard seeing dips. This is why financial advisors warn about risk tolerance, length of time in the market. It’s a bit too easy to tune those warnings out when investments are going up.

I need to stop looking at mine but it’s hard to not feel a bit rubbish about it when there has been a big drop. It feels like a years worth of savings down the toilet even if I’m telling myself that anything I buy now will be cheaper.

Stop looking at it

If you’ve moved to cash what you’ve actually done is crystallise your loss.

the stock market has declines every 2/3 years and deep declines every 7/8 years: it’s part of the cycle. If you panic and sell each and every decline you’ll erode your capital. the secret with pensions and indeed investing is to invest only for long term - invest regularly and do not tinker. Certainly don’t sell in a dip. these types of declines should be seen as sales, when the unit prices drop so you get more bang for your buck. I’ve set some money aside for this drop: I’ll pump half of it into pension and half into my isa.

see Maven Money for lots of insight into the behaviour behind successful investing.

According to the boss of JP Morgan, we need to brace ourselves for a hurricane in the financial markets.

Stop looking at your investment/pension funds - now is not the time to sell, as a previous poster pointed out, now is the time to buy if you have spare cash - when the market is low. Sit tight - don't look if it upsets you. The market will recover in time. 5 years is a long time in markets, you really need to get a grip and stop looking/worrying - meant in the nicest possible way.

Only buy if you want to invest for the long term. The next few months, and possibly years, are likely to be volatile.

I think this is pretty much the advice in general if you are buying shares - we never know what's in store for the future, so if you can't invest for the long term, maybe the stock market is not your best option.

Yes. But it would be naive to think these are normal times. Investing in funds that track thousands of shares, like the Vanguard funds, relies on the fact that, while some will fail, more will succeed to offset the failures, and over time there will be steady growth. But as we're heading into financial turbulence, many more firms will struggle..That's why growth forecasts are being lowered across the globe.

So, while taking money out is a bad idea, putting money in is riskier than it would be in steadier times. That's why the JP Morgan boss says there is currently a lot of liquidity - a lot of firms and individuals holding cash and holding back on investing it because they're worried about what is ahead.

So, it could be a good time to buy, but only if you can afford to take the risk, i e. don't need the money any time soon.

So, it could be a good time to buy, but only if you can afford to take the risk, i e. don't need the money any time soon. IMO you should never invest in shares if you need the money anytime soon. The guy who bought £250K worth of Royal Bank of Scotland shares before the banking crisis thought his money was safe...no one ever knows what's around the corner. We lunge from one crisis to the next and there are winners and losers every time.

Mine are now the lowest they've ever been

Only invest if you're in it for the long term'

How long is 'long term'? I'm 58 so will want to retire provably at 55. Is this too short a term to buy now?

My pension has lost nearly 10% and I fear it'll get worse before it gets better .

Should add that I'll just ride the storm . Investments fluctuate and I'd got too used to growth I think . I don't need it for another 10yrs or so and am busily topping up my vanguard S and S ISA to take advantage of low unit prices

I have the 60% strategy. First time investing in anything, over several months have lost 11% so far just a steady decline on my performance tab while Vanguard take a fee for their work. It is really hard seeing all this money vanish as I don't have a lot!!! But I know I should leave it in (through gritted teeth).

Aren't stock markets set to fall far further and bonds, the hedge against this.. have due to inflation and interest rates collapsing too.

I must admit, i didn't understand the inverse relationship between bonds and inflation/interest rates.... this has crucified my pensions value.

I'll need these in the next few years.