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

I think sometimes we talk ourselves into recession etc and the constant media doom and gloom facilitates this . Yes time's are hard right now but we can only make decisions based on our own risk profiles and what we feel comfortable with .
I am drip feeding into my vanguard but holding off transferring my cash ISA until autumn time to see what is happening then .

I assume you mean retirement at 65? That's long term however I think if you need to withdraw your cash on a certain date that is something you need to plan for. Vanguard offer a product that changes it's risk profile as you approach retirement date...I'm sure other's funds offer similar.

Yes, oops, sorry, meant 65. So, 6 years is long term?

On a personal level of course, its easy to be down and think things will never recover, guilty of this! but they will and if they don't, we will have far greater stuff to worry about!

Hope there is a quick resolution to Ukraine, for the sake of the Ukrainians firstly and that will help bring inflation down, though prices for commodities are still likely to remain high.

For us who hold investments outside of a pension, we are in very fortunate position.

I think it's fine but at the end of the 6 years do you need the money or could you wait another year if we had a financial crisis - that's what you need to think about and plan for. If you need the money for a specific date or event investing in the market becomes riskier for you personally.
You have options - pensions, salaries, rainy day funds, everyone is different. You need to think through your options, consider your budget, think about possible risks and spends coming up - put a plan in place.

I would be transferring my cash into a S&S ISA. Theres a sale on. More units for your pounds and you will still get dividends, depending on what you invest in.

Markets could well fall a lot further, Ukraine, interest rates, inflation, supply chain, CV in China, in fact just CV....

Its a very volatile time.

I think i'm just going to spend it :)

Yes mine dropped down again

I’m torn between spending and investing, saving seems pointless when inflation is so high. Is very depressing to be in a position to be able to save for the first time in my life when inflation is like this!

My POV is that stock markets are the most attractive for putting new money in at times when they are unsettled and there is fear of things getting even worse. Yes they can go go even lower, there is no way to call the absolute bottom perfectly, but ironically, markets are safer for new investors when there is fear than when everybody feels confident: periods of great confidence of optimism tend to breed stock market bubbles, and new money invested during the top of a bubble can take many years to recover its value. Money invested partway through a downturn may go down further, but if the investor holds on, it is more likely to rise within a year or three back to and above the entry price.

For a person planning to retire in 6 years at age 65, unless they plan to take everything out in cash at retirement age in order to buy a house or move abroad, their investing horizon for most of the money is actually much longer than 6 years. If the life expectancy were to be 85 for a person who is 58 today, so 27 more years to go, then even if withdrawals start after 6 years, most of the money continues to be invested for quite some years. The median pound will probably be spent somewhere between year 10 and year 15, and the investment time horizon for the average invested pound, dollar or euro is 10+ years. With that sort of time horizon, it probably makes sense to have half or more of ones savings in stocks and shares, IMO

Yes, fair point.

It's unlikely you will take it out as a massive lump sum

Markets go up and down. That’s the way it is. Right now they’re down but over the long term they have always outperformed.

The things to avoid are:

-putting all your money in at once - if you buy at the top that can take a long time to get back into the black. Drip feed it in slowly to mitigate that.
-selling when the markets are down. All you’re doing is turning a notional loss into a real one.

If you’re fretting about your investments falling over a couple of months (or even a couple of years) you’re looking at it through too short a timeframe and probably shouldn’t be investing.

Things are different if you’re retiring imminently. Selling your investments to generate income in a rapidly falling market can be very bad (Google ‘pound cost ravaging’). It’s worth seeing an adviser when you’re near retirement in my view. They’ll help you de-risk and/or move part of your portfolio to cash (from which to draw an income).

What you can’t do is just switch entirely to cash because simply because it feels safer. If you’re in retirement for 20-30 years inflation will annihilate the real spending power of your pension.

We have £200 K coming from a DC pension that DH has been in for 20 years, we have put away a huge chunk a month and his employers have damn near matched it.

We have a retirement income of just under £49 k (obviously before tax) but without the ability to save it is almost a like for like retirement.

Sadly, I will be inheriting in the region of £150 k later this year.

We are aware that the £200k may look a little poorly when we take it out, but if we ignore it, it should rebalance. Most of my inheritance (on paper mine in reality ours) inheritance will be invested but based on current markets I will keep a chunk back for travelling to Europe city breaks. We have a decent slush fund for boilers, cars, washing machines etc.,

Sorry stupidly long answer to a short question, Yes I will still use our FA,

Retirement income is final salary and state.

The only one of my funds I never made any money on was one I brought out right at a high price.
I'e I didn't drip feed it in.

Another one I brought when it was low, it went as high as 151 %!

I've just brought some more for DC junior ISA esp USA stock market and more vanguard.

We are in quite a pickle in terms of the economy....I have personally sold all my funds and cashed out of my s&s ISA with HL....my workplace pension is down but I can't do anything about that and my employes contributes 10% of my salary so it's free money really. The stock market will recover eventually if you hold....you only lose money if you sell....the whole global economy is based upon continual growth and as long as your portfolio is fairly diverse you'll be ok long term....hope this helps

What about property? If it's not mortgaged, is that a safer bet for a say ten year investment?

Issue with property is you need a huge amount of money that stays inaccessible for a long time. My actual house is currently earning more than I am, but that’s not sustainable across the economy, at some point the housing market has to reform.

Currently you’re looking at capital gains tax, upkeep costs and council taxes. I know a couple of people who’ve had awful problems with tenants as well.

personally I’m not happy with the ethics of owning more than one home.

Yes, those are fair points too. I was thinking a fairly priced student flat to rent out, rather than a second home. But probably all sorts of issues there too.

Markets will probably drop more this year (likely with every Fed announcement), but if you can stomach it, it’s time to buy. I use dollar cost averaging and am always buying, no matter what the market is doing. You can’t time the bottom, but the market’s on sale right now.

Our DC (back up fund to the FS and state) has dropped by 1.5% in the last year, we already have a slush fund of about £40k in PBs and also we can draw 25% of the the DC tax free, we are also going to inherit late this year, early next year from a £500k house which only has to go three ways, so we will be more than OK, but I resent having saved and saved to be even in a position where I am fretting about it. Does that make sense ?

I am aware that we are lucky but I still resent it.

I also resent energy bills, but we all do.

Yeesh, 3% wiped off of LS80 yesterday. I’m trying to decide whether I shovel extra in before our next direct debit or wait to see if further drops happen!

40k in PBs....It always surprises me how many people have these things....I dont understand the attraction to PBs at all....

I know shouldn't panic but my s&s ISA is down 16% & junior isas for the dc down 10%. Do I just keep feeding money in & hope in a few years it all levels out.

@swifty1974 is there somewhere better for keeping short term cash? I don't want to tie it up as I need it in the next year or so.