Further Pension fund planning

snow hope · Post by **snow hope** » 07 Jan 2009, 09:30

Guys, I know a lot of people think that Pensions aren't going to be worth zippo in the future and I can see this viewpoint all too clearly, but I do have a small pension fund that I have built up over the last 20 odd years and I am doing my damndest to protect it as much as I can!

Through good advice gleaned from this forum in the past I have managed to transfer the fund out of a general managed fund at the top of the stock market in May 2007 (which dropped 30% in the last year) into a Corporate Bond and Govt Gilt fund. Which had stayed stable until a few months ago when it dropped about 10%. It has since climbed up a few percent.

With all the discussion on UK Govt debt and the impact this may have on Gilts and also the recession and the impact this may have on even some large companies who may have issued Bonds, I am considering transferring my fund again.

Can anybody enlighten me as to what might happen with Gilts and Bonds if the current environment continues and indeed worsens and the impact this may have on investments in Gilts and Bonds?

Thanks!

PS_RalphW · Post by **PS_RalphW** » 07 Jan 2009, 10:13

Oil futures look cheap, assuming there will be a futures market in ten years time....

DominicJ · Post by **DominicJ** » 07 Jan 2009, 10:27

For legal reasons this is not financial advice

Bonds/Gilts dont look too healthy going forward.

A lot of them theres a lot of short term debt that has to be rolled over in the next 6 months.

SILVERHARP2 · Post by **SILVERHARP2** » 09 Jan 2009, 10:16

You probably want to stay away from long dated bonds, as there will be price risk later. You have to think about bond yields being on a curve
http://www.bloomberg.com/markets/rates/uk.html

The "safer" place to be are bonds with a 5/6 year maturity , over the next few years the longer dated bonds are going to fall in price as investors will perceive more risk

snow hope · Post by **snow hope** » 18 Jan 2010, 16:44

Guys, I am hearing talk that Gilts and Bonds are not the place to be - in fact they they should be sold now. I understand this is because of the amount of debt the UK Govt now has - it may be just too much and the risk of default is increasing. I am confused as I have also read that the yield is increasing..... is this not good if you have money in a Gilts and Bonds fund?

Can anybody explain this to me as I mustn't understand this correctly.

Thanks.

(I should add that my current Corporate Bond Fund investment is at the highest unit value it has ever been - so now is the time to switch funds if it is about to go tits up!)

SILVERHARP2 · Post by **SILVERHARP2** » 19 Jan 2010, 10:38

if the yield is increasing the price is dropping. if a £100 bond valued at par pays 3% in year 1 but by year 2 the bond is only trading at £50 it means the latest investor wants a 6% yield to justify parting with his money, ie he is getting £3 interest per annum but only paid £50 for it.
Whats "going to happen" that I was hinting at in the above post is that investors will only buy shorter term debt as they will trust longer term debt less.
If sterling started to improve versus the dollar and the Euro the reverse might happen and investors would pay more to buy UK debt as there would be a currency gain and there would be an implied bet that the gov. had things under control.

SunnyJim · Post by **SunnyJim** » 21 Jan 2010, 11:20

Snow,

I agree. Get out of bonds and guilts. Inflation is here and Merv has said he doesn't care. This could be in for a while.

You know what the future holds as well as I. If you can do it, if your pension is flexible enough then buy something real and tangible (agricultural or woodland). If you can't do that, then how about a commodity based ETF. THey are the devils work if you stop to think about it, but we are always saying that oil is undervalued considering how important it is to the fabric of our society. Why not help the oil price increase by buying an oil based ETF? Or if you don't want to be a part of all that scene, then maybe you could try to invest in a company that is heavily investing in green technology.

Norfolk In Chance · Post by **Norfolk In Chance** » 21 Jan 2010, 15:36

i-shares Global Clean Energy, Ticker Symbol: INRG

Although markets appear to be taking a nosedive as I write...may be best to wait for the dust to settle.

snow hope · Post by **snow hope** » 31 Oct 2011, 23:24

Just thought I would resurrect this thread, as I am very concerned we are nearing another "market adjustment" or crash as most people call it.

Well I didn't transfer my little pension pot out of the Bond Fund I am in, mainly due to indecision if truth be told - hmmmm, not really good enough!! But I have been reasonably lucky as the fund dropped about 8% from its peak but has now regained about 5%, so not too bad after all.

What I did do, was to switch all new contributions for the last couple of years, (thanks to Sunny Jim telling me about UK Treasury Pension fund being switched), into Index Linked Bond Fund, which has grown approximately 20% over the period.

So at least I have gained a bit from this good advice - Thanks Jim.

I am now trying to mitigate the coming Euro and worldwide financial crash which I see coming in early 2012.

My plans are to move about 75% of my Corporate Bonds fund into a Cash Fund, which is guaranteed by Standard Life not to fall. Of course the gains from a fund like this are pretty meagre, sometimes 0% / annum. But there are few funds that have this guarantee of no falling, and if you are sure the markets have got a crash coming, then it seems like a pretty good bet.

Also, I have a friend in the Insurance industry who is more than 10 years older than me and thus closer to retirement, who likewise moved his entire fund before the 2007/08 crashes into a Cash Fund and didn't lose out at all from the markets drops.

I am no expert in this area, but simply motivated to mitigation if at all possible. So I am very interested to hear what others think and advise.

My view is that I need to act in the next 4 weeks, as I am not going to be held back by indecision this time.

Thoughts?

SleeperService · Post by **SleeperService** » 02 Nov 2011, 18:23

Bearing in mind the state of my finances at the moment....

I'm sure I've read on these forums about switching pension money to buy a plot of land. If you choose wisely using your PowerSwitch knowledge it should be a very sound investment and you could live on it if need be.

If the financial near future is, as many think, going to be a period of high inflation a zero fall option seems a pretty hollow thing. I also got badly burnt by Standard Life a few years ago, be very careful, please

emordnilap · Post by **emordnilap** » 03 Nov 2011, 10:06

SleeperService wrote:I'm sure I've read on these forums about switching pension money to buy a plot of land.

Indeed you have.

bealers · Post by **bealers** » 03 Nov 2011, 21:36

emordnilap wrote:
SleeperService wrote:I'm sure I've read on these forums about switching pension money to buy a plot of land.
Indeed you have.

Definitely possible, here's how we did it.

The ongoing charges might make you think twice and there are definite restrictions on what you're able to do if you want to keep clearly within the letter of the law (as we do). If you're looking for land to help you realise based goals then converting your pension's cash into a physical asset that you can utilise is definitely achievable.

snow hope · Post by **snow hope** » 10 Nov 2011, 19:24

Moved 60% of my little pension pot into a Cash Fund today - one of the few guaranteed by Standard Life not to drop in value!

15% moved into a Mixed Bond Fund, 10 % remaining in Corporate Bonds and 15% remaining in an Index Linked Fund.

I expect a market adjustment downwards and am fleeing to safety. If inflation continues to pick up, I will re-assese in about 6 months. Buying land is definitely on the cards but I would have to switch to a Sipp first.

Protection from the coming crash is the name of the game at the moment.

snow hope · Post by **snow hope** » 12 Apr 2013, 12:31

Update time.

The transfer to Cash didn't happen, because that (guaranteed) fund had already been closed by SL. So most was left in Bonds.

Things have faired well in Bonds, as the Bond/Gilts crash never materialised. I would say this is because things always happen slower than one expects them too. AND money has to stay somewhere and there is still an ongoing flight to Bond Funds imo.

Anyway, just moved 10% of my existing little Pension Pot into a Blackrock Gold and Silver fund that has dropped 25% over the last 2 years!

Also 15% of future monthly contributions will be going in there as well. This is a first move, I may increase this over the coming months, dependant on whether I think the reasoning I argue below is confirmed.

I reckon that we are at the bottom of that downward cycle and gold and silver will now start to increase again over the coming years. This is based on Japan opening the floodgates to printing money. The US continuing to print money (the new normal). Also due to the ongoing Euro and lately Cyprus crisis, I expect Euro printing to commence shortly. And finally if the UK enters a triple dip as I expect, then you can be sure that the BoE will recommence QE.

This all ogres well for Gold and silver imo. Well at least I feel strong enough to put my money where my mouth is.

stumuzz · Post by **stumuzz** » 12 Apr 2013, 13:14

Hope it turns out well.

I have taken the drastic position of converting nearly everything into land. Some have gone into Agri funds.

The reason primarily is the money printing and the frb money which is looking for a home.

There is an unbelievable amount of cash looking for a safe home with a modest return. Also, with the uncertainty of bank raids (Cyprus) but also Spain's austerity tax on interest, there may be a time coming when the risk of keeping cash at the bank versus the reward of 0.75% interest for keeping it there causes the little people to withdraw their cash and keep it under the mattress. If this happens then capital controls are back. Capital controls means you have your money in theory only.

Also, considering investing in a small 'mom and pop' local business as a bulwark to higher energy prices.

Keep us all informed and good luck.