The FTSE

[SWP's back]

Only 15% of actively managed funds beat averages, but Warren Buffet has never had to pay out on a $2M bet of a BASKET of actively managed funds beating the S&P Index over a 10 year period, so do with that what you will!

As above, it’s most certainly not only about returns for the vast vast majority.

 

[hampshireblue]

As above, it’s most certainly not only about returns for the vast vast majority.

Ok, I'm confused. If it isn't about returns for the vast,vast majority, what is it about?

I'm invested for one reason and that is to provide me with an income, hopefully without taking too much risk or having to eat too much into the capital amount . The returns I get are crucial to achieving this.

Am I unusual in this approach?

 

[SWP's back]

Ok, I'm confused. If it isn't about returns for the vast,vast majority, what is it about?

I'm invested for one reason and that is to provide me with an income, hopefully without taking too much risk or having to eat too much into the capital amount . The returns I get are crucial to achieving this.

Am I unusual in this approach?

No but what rate it growth do you need to provide the above? And what amount of volatility are you willing to expose yourself to? Are you fucked, mentally and/or financially if your assets drop to 40% of their current value for an unknown period of time?

Returns are returns, some people are happy to beat inflation, some people want double digits. Trackers (such as the S&P
500) will have made you near the latter since the end of 2009 but still had a couple of years of double digit losses during that time.

The best investment, especially with regards to retirement planning, isn’t the asset that makes one the most money. It’s the one that provides the best return per unit of risk the investor is willing to take.

If my clients had promised not to look at their investment for 15-20 years after they signed the paperwork, I’d have been able to guarantee a much better return. But people do look at their value and if you’re 72 and have just seen your £500k reduce to £290k in six months, you’re not overly happy (even if you are only paying 0.1% for the ETF in comparison to 0.75% on a diversified multi asset balanced fund).

TL;DR - no, it’s not “all about returns” for the vast vast majority. It’s finding everybody’s sweets spot on the risk/return graph. If you’re 35 you can have 100% of your funds in equities, if you’re 65, unless you’re a very experienced/sophisticated investor, that would be a terrible idea and the FCA would find against your adviser should you complain, no matter how much paper work they’d made you sign absolving them of liability.

 

[MCFC_ Phil]

I'll state the obvious but with those figures I wouldn't be retiring in 3 years.

I would be looking to pay all I could in the pension or AVCs to avoid tax if I had to retire in 3 years, even if it meant taking a small loan to cover living costs, and take home minumum wage for the 3 years (which is the restriction on mine).

My bad here. Totally wrong info, doh. I aim to retire in 6 years actually. Figures were correct though. Also wife has NHS pension to kick in at same time. So if I have spare cash per month, increase the contributions?

 

[M18CTID]

My bad here. Totally wrong info, doh. I aim to retire in 6 years actually. Figures were correct though. Also wife has NHS pension to kick in at same time. So if I have spare cash per month, increase the contributions?

I’m no expert but I would definitely chuck more in if you can afford to. One of the very few positives of this pandemic is that by not going out on the lash watching City all over the country and beyond, I’ve been able to launch a 3-pronged financial assault - clear some unsecured debt, save some money towards home improvements, and hugely increase my monthly SIPP contributions. I’ve now got £825 a month going in (once tax relief is added).

 

[crublue1]

No but what rate it growth do you need to provide the above? And what amount of volatility are you willing to expose yourself to? Are you fucked, mentally and/or financially if your assets drop to 40% of their current value for an unknown period of time?

Returns are returns, some people are happy to beat inflation, some people want double digits. Trackers (such as the S&P
500) will have made you near the latter since the end of 2009 but still had a couple of years of double digit losses during that time.

The best investment, especially with regards to retirement planning, isn’t the asset that makes one the most money. It’s the one that provides the best return per unit of risk the investor is willing to take.

If my clients had promised not to look at their investment for 15-20 years after they signed the paperwork, I’d have been able to guarantee a much better return. But people do look at their value and if you’re 72 and have just seen your £500k reduce to £290k in six months, you’re not overly happy (even if you are only paying 0.1% for the ETF in comparison to 0.75% on a diversified multi asset balanced fund).

TL;DR - no, it’s not “all about returns” for the vast vast majority. It’s finding everybody’s sweets spot on the risk/return graph. If you’re 35 you can have 100% of your funds in equities, if you’re 65, unless you’re a very experienced/sophisticated investor, that would be a terrible idea and the FCA would find against your adviser should you complain, no matter how much paper work they’d made you sign absolving them of liability.

What a good post, thanks for taking the time + trouble. That goes for all the other contributions from financial bods on here.

 

[MCFC_ Phil]

I’m no expert but I would definitely chuck more in if you can afford to. One of the very few positives of this pandemic is that by not going out on the lash watching City all over the country and beyond, I’ve been able to launch a 3-pronged financial assault - clear some unsecured debt, save some money towards home improvements, and hugely increase my monthly SIPP contributions. I’ve now got £825 a month going in (once tax relief is added).

I was think along those lines. Got some spare cash from exactly what you were saying. Only problem the missus is spending the 5k we've saved on having the garden transformed. Going to divert some of the monthly savings into the pension from now on, she'll appreciate it in the long run!

 

[Corky]

My bad here. Totally wrong info, doh. I aim to retire in 6 years actually. Figures were correct though. Also wife has NHS pension to kick in at same time. So if I have spare cash per month, increase the contributions?

You will probably get around £6k a year on your private pension, even if that is enough for your with state and your wifes pension, paying in more now will save you tax, especially in your last few years as you won't have to wait long to get it back as a lump sum if that's what you decide to do with part of it.

 

[CBD]

Looks like silver could be next, apparently most shorted market in the world! If you want a fund look art Merian Gold And Silver. 50;50 gold/silver and miners geared into the price.

 

[hampshireblue]

No but what rate it growth do you need to provide the above? And what amount of volatility are you willing to expose yourself to? Are you fucked, mentally and/or financially if your assets drop to 40% of their current value for an unknown period of time?

Returns are returns, some people are happy to beat inflation, some people want double digits. Trackers (such as the S&P
500) will have made you near the latter since the end of 2009 but still had a couple of years of double digit losses during that time.

The best investment, especially with regards to retirement planning, isn’t the asset that makes one the most money. It’s the one that provides the best return per unit of risk the investor is willing to take.

If my clients had promised not to look at their investment for 15-20 years after they signed the paperwork, I’d have been able to guarantee a much better return. But people do look at their value and if you’re 72 and have just seen your £500k reduce to £290k in six months, you’re not overly happy (even if you are only paying 0.1% for the ETF in comparison to 0.75% on a diversified multi asset balanced fund).

TL;DR - no, it’s not “all about returns” for the vast vast majority. It’s finding everybody’s sweets spot on the risk/return graph. If you’re 35 you can have 100% of your funds in equities, if you’re 65, unless you’re a very experienced/sophisticated investor, that would be a terrible idea and the FCA would find against your adviser should you complain, no matter how much paper work they’d made you sign absolving them of liability.

Ok thanks for the context. I thought I'd clarified the bit about not taking too much risk that you replied to.