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Savings and Investments thread

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  • As I’m risk adverse I’ve always wondered why my FA didn’t keep more of my SIPP in cash in case of such circumstances.
    Also risk adverse and it’s why I binned the FA I was using. He took total advantage of the fact I knew nothing about finance and despite saying I was v risk adverse got all my funds into something I didn’t want. Bizarrely a house came up for sale shortly after and I managed to get the money out just in time. 
  • edited April 4
    As I’m risk adverse I’ve always wondered why my FA didn’t keep more of my SIPP in cash in case of such circumstances.
    I'm afraid IFA's are just like the rest of the population and cant second guess the market.

    If you had 20% sitting in case & the market had shot up 10% you'd be questioning why you weren't fully invested.

    You should be invested as per your attitude to risk. If you are totally risk adverse you shouldn't invest. From then on in it's really just a sliding scale depending on your risk attitude. A few general examples  - 

    Cautious -  30/70 split between equities & Bonds, Property etc

    Balanced  -   50/50

    Moderate   - 65/35

    Dynamic     -  80/20

    Adventurous  - 100

    Also, by the time any adviser realises what's going on it's too late, especially as all dealings are done on a forward basis. So even if you sold at 8am this morning you'd be dealing at values based on today's close. You might get lucky and the fund prices at noon. 

    At the end of the day invest your money to a level of risk you are comfortable with and keep a certain amount in cash / premium bonds as your buffer. 
    We've had two days of 5% drops - they say 10% is a correction whilst 20% is a slump.  Which is this and how can we tell?

    Should the BoE do the right thing and drop rates at the next meeting, plus a few other decent calls elsewhere, analysts suggest UK might only lose 0.5% GDP.

    Best seek sound advice about Europe, Far East and USA before buying back in - given Trump's approach I'm pleased to say my SIPP exposure is now down to 40% USA through shifting away plus these recent drops.  Not advising anybody else but I've no inclination to try catching a falling S&P 500 knife!

  • As I’m risk adverse I’ve always wondered why my FA didn’t keep more of my SIPP in cash in case of such circumstances.
    I'm afraid IFA's are just like the rest of the population and cant second guess the market.

    If you had 20% sitting in case & the market had shot up 10% you'd be questioning why you weren't fully invested.

    You should be invested as per your attitude to risk. If you are totally risk adverse you shouldn't invest. From then on in it's really just a sliding scale depending on your risk attitude. A few general examples  - 

    Cautious -  30/70 split between equities & Bonds, Property etc

    Balanced  -   50/50

    Moderate   - 65/35

    Dynamic     -  80/20

    Adventurous  - 100

    Also, by the time any adviser realises what's going on it's too late, especially as all dealings are done on a forward basis. So even if you sold at 8am this morning you'd be dealing at values based on today's close. You might get lucky and the fund prices at noon. 

    At the end of the day invest your money to a level of risk you are comfortable with and keep a certain amount in cash / premium bonds as your buffer. 
    We've had two days of 5% drops - they say 10% is a correction whilst 20% is a slump.  Which is this and how can we tell?

    Should the BoE do the right thing and drop rates at the next meeting, plus a few other decent calls elsewhere, analysts suggest UK might only lose 0.5% GDP.

    Best seek sound advice about Europe, Far East and USA before buying back in - given Trump's approach I'm pleased to say my SIPP exposure is now down to 40% USA through shifting away plus these recent drops.  Not advising anybody else but I've no inclination to try catching a falling S&P 500 knife!

    I'm not surprised if you still have 40% USA.
  • cafctom said:
    Did the big one time contribution to private pension today. Thanks for those who provided insight. Felt like a significant moment to part ways with a fairly big sum of money that I won't be able to touch for another 20 years at least, but I think its the right move. 

    I'm glad I just put it in cash (for now). Would have been quite a tough one to watch had it gone in the day before the worst economic moment in half a decade. 
    If you bought funds today you'd be buying at prices calculated at close of business today......and maybe close of business on Monday for US stocks (I  know @PragueAddick has something to say about this 😀) so you'd buying at the current "bottom". 

    So it might be worthwhile getting some invested asap. Maybe only 25% or 30% and then see what happens Mon & Tues next week. 

  • bobmunro said:
    bobmunro said:
    FTSE down another 4% today, largely in response to China retaliating with like for like 34% tariff on all US imports.

    I am so pleased I'm almost exclusively in cash now - must be a nightmare for pension funds.
    Time to go in then. Maybe leave it until the start of next week as the US will probably fall again today. 

    In the light of previous market "downturns" this is currently not so bad. During the first month of lockdown in March 2020 most equity markets fell c25%. Same for Black Friday in 1987. The week following the Great Storm  both UK & US markets were down 20%+.  

    However, in both 1987 and 2020 the markets ended the year higher than they started. And 2021 was a great year.....esp for the US. Then inflation kicked in & interest rates went up. Then there was Liz Truss.



    Not a chance - nothing is long-term when you're as old as me!
    I'm happy to take my 4-5% returns risk free.
    I bought a little bit more today, FTSE100/250 and S&P500, so my private SIPP is now exactly 50/50 between shares and pure cash (earns 3.05% tax free so not the end of the world leaving it as such). The SIPP makes up about 85% of my overall pensions (not inc state) so I'm a little over 50% shares to cash.

    I'm comfortable with that right now as just agreed my last 5 years at work, I was going to go earlier but really enjoying it right now, pay is back past the highest I've ever earned if I include stock options and as long as I don't go silly I can do the hours as I see fit so generally have been taking 8-9 weeks holiday a year and over the summer months don't do more than 3 days a week.

    On that note, footy Saturday and then off to Cyprus next week!
  • cafctom said:
    Did the big one time contribution to private pension today. Thanks for those who provided insight. Felt like a significant moment to part ways with a fairly big sum of money that I won't be able to touch for another 20 years at least, but I think its the right move. 

    I'm glad I just put it in cash (for now). Would have been quite a tough one to watch had it gone in the day before the worst economic moment in half a decade. 
    If you bought funds today you'd be buying at prices calculated at close of business today......and maybe close of business on Monday for US stocks (I  know @PragueAddick has something to say about this 😀) so you'd buying at the current "bottom". 

    So it might be worthwhile getting some invested asap. Maybe only 25% or 30% and then see what happens Mon & Tues next week. 

    Surely that is only true of funds? Individual shares are bought at the current price?
  • edited April 4
    As I’m risk adverse I’ve always wondered why my FA didn’t keep more of my SIPP in cash in case of such circumstances.
    I'm afraid IFA's are just like the rest of the population and cant second guess the market.

    If you had 20% sitting in case & the market had shot up 10% you'd be questioning why you weren't fully invested.

    You should be invested as per your attitude to risk. If you are totally risk adverse you shouldn't invest. From then on in it's really just a sliding scale depending on your risk attitude. A few general examples  - 

    Cautious -  30/70 split between equities & Bonds, Property etc

    Balanced  -   50/50

    Moderate   - 65/35

    Dynamic     -  80/20

    Adventurous  - 100

    Also, by the time any adviser realises what's going on it's too late, especially as all dealings are done on a forward basis. So even if you sold at 8am this morning you'd be dealing at values based on today's close. You might get lucky and the fund prices at noon. 

    At the end of the day invest your money to a level of risk you are comfortable with and keep a certain amount in cash / premium bonds as your buffer. 
    We've had two days of 5% drops - they say 10% is a correction whilst 20% is a slump.  Which is this and how can we tell?

    Should the BoE do the right thing and drop rates at the next meeting, plus a few other decent calls elsewhere, analysts suggest UK might only lose 0.5% GDP.

    Best seek sound advice about Europe, Far East and USA before buying back in - given Trump's approach I'm pleased to say my SIPP exposure is now down to 40% USA through shifting away plus these recent drops.  Not advising anybody else but I've no inclination to try catching a falling S&P 500 knife!

    Thats the million $ question & something no-one can answer. No-one knows where & when it will end. My gut feeling is that the will be a "bounce" of some sort early next week. Whether it's a dead cat bounce & the market then starts falling again is anyone's guess - probably will.

    What my 40 years experience of watching markets has shown me is that falls don't last that long. There is now plenty of cash sitting on the sidelines and institutions/ pension funds like a bargain and need to get the money invested again. Not saying the falls are over, far from it, but these "dips" happen all the time but the markets soon recover. I also think Trump will row back on some of the tariffs. Like with Russia/ Ukraine he likes to get people around the table and these tariffs have already got countries trying to do deals with the US. 

    As for the BOE - I dont see them cutting rates anytime soon. They've already said that inflation is due to rise in the 2nd half of the year and its counter intuitive for them to be cutting rates at this moment in time.

    But to caveat all that.....I'm no expert & I'm often wrong (as people like to remind me 😀). 
  • I agree with that, Golfie. Go back 5 years to the COVID thing, markets plummeted and recovered very quickly. We were dealing with a virus then (with a higher iq than trump) and if you were a little bit brave you could pick up some bargains. I grabbed a few BP shares for a smidge over two quid, for example.
    This is hugely unpredictable but if I had to bet, I'd say the squeeze will continue for a bit then negotiations will result in some rollback of tariffs in a piecemeal way. But when you're dealing with a reactionary idiot it's hard to call.
    I'd say if you didn't sell last week then no point now. Hold tight and ride it out. I sold a few things but not as much as I should have, so I'll leave what's invested and look to pick up some bargains when I feel the tide has started to turn.
    I bet I'm wrong more often than Golfie.
  • Southbank said:
    cafctom said:
    Did the big one time contribution to private pension today. Thanks for those who provided insight. Felt like a significant moment to part ways with a fairly big sum of money that I won't be able to touch for another 20 years at least, but I think its the right move. 

    I'm glad I just put it in cash (for now). Would have been quite a tough one to watch had it gone in the day before the worst economic moment in half a decade. 
    If you bought funds today you'd be buying at prices calculated at close of business today......and maybe close of business on Monday for US stocks (I  know @PragueAddick has something to say about this 😀) so you'd buying at the current "bottom". 

    So it might be worthwhile getting some invested asap. Maybe only 25% or 30% and then see what happens Mon & Tues next week. 

    Surely that is only true of funds? Individual shares are bought at the current price?
    I'm 90%+ (where I hold stock) in ETF's - in effect shares that are traded in real time.
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  • cafctom said:
    Did the big one time contribution to private pension today. Thanks for those who provided insight. Felt like a significant moment to part ways with a fairly big sum of money that I won't be able to touch for another 20 years at least, but I think its the right move. 

    I'm glad I just put it in cash (for now). Would have been quite a tough one to watch had it gone in the day before the worst economic moment in half a decade. 
    If you bought funds today you'd be buying at prices calculated at close of business today......and maybe close of business on Monday for US stocks (I  know @PragueAddick has something to say about this 😀) so you'd buying at the current "bottom". 

    So it might be worthwhile getting some invested asap. Maybe only 25% or 30% and then see what happens Mon & Tues next week. 

    And it still does my head in. I asked my new friend Claude about it, here is what transpired:

    Me: Yes, so based on UK time, if I place the order before 11.45 tomorrow, I will receive a price which reflects a valuation based on stock market closing prices at the end of today's trading?

    Claude: No - you'll receive a price based on tomorrow's market values calculated at noon tomorrow. Unit trust prices are "forward priced," so the valuation point uses current market prices at that time, not previous day's closing prices.

    Is that how you understand it, i@golfaddick ? So it means that if we place orders over the weekend we'd get prices calculated at mid-day Monday, which may well not reflect today's close for UK or Euro stocks, as they will have been trading Monday morning, but will reflect today's US prices? (Jeez, S&P 500 is now down 6% on the day)

  • Anyway, at least we've all got two things going for us in this chaotic time...a half decent Charlton side, and the penguins. So I'm off but here are my two favourite penguin memes of the day- is it just me or does Larry manage to actually kind of pull off the  Trump look here?
  • Little soon to say, but early indications show that Trumps economic prowess makes Liz Truss look like Warren Buffet!!
  • IdleHans said:
    Chaz Hill said:
    redman said:
    bobmunro said:
    se9addick said:

    I’m not sure it’s accurate to say tariffs caused the Great Depression. 

    Correct. The Tariff Act of 1930 was designed to reduce the effects of the depression but in fact exacerbated it because other nations (as now) retaliated with their own tariffs and US exports plummeted.
    Need to be very careful in comparing what is happening now to 1828 or 1930. Don't get me wrong, there is no benefit to US in these moves. However US is much stronger relative to other countries than it was then. It will certainly hurt other countries much more. Responses need to well thought through and not knee jerk. I'm no great fan of Starmer but from a UK point of view I believe he is currently adopting the right approach. ie calm talk and little action. 
    The US is not the economic force it once was - that much is obvious. Trump is a narcissist and a bully whose only concern is himself - the Republican Party and Congress have effectively become part of the Trump cult. 

    He's a dangerous unstable character who is economically illiterate - the farcical way he's calculated tariffs based on trade deficits clearly illustrates this.

    He will make the world a more unstable place and ultimately constantly appeasing him will just lead to him asking for more. Starmer knows the UK is too weak to stand up to him and you can't trust any deal he agrees to. He is only too happy to renege on agreements.

    We just have to hope the damage he causes across the globe is limited. The US is no longer a reliable trading partner.





    Doing my small bit by avoiding buying anything from the US. 
    I think this is the way to go, a non governmental boycott of US products makes it more difficult for Donny to respond, it's simple supply and demand. I don't knowingly buy American stuff anyway. I've not bought a Tesla and will now not be buying a lot more! Have that, you orange freak.
    Looking around my gaff the only US stuff I have is the tech stuff, basically Apple. There’s the Netflix and HBO subs I guess. Nothing else. No American food brand stuff. Just been checking out some outdoor recliner chairs, and eyeing a Canadian brand. A lot of German brands, and all the furniture is European. British bed, and hifi stuff, includes a Sonos Connect box which is the weak link. LG TV. Honestly, rhetoric aside, if you are not a fast or packaged food fan, what is it that Trump thinks we should buy? 
    But most Apple items are manufactured in Asia, mainly China. 

    Most American clothing brands are manufactured in Asia, as are Nike shoes.

    I remember going to America and buying branded clothes at a much cheaper price than in the UK. That was long ago. I hate to think what the prices will be now. 

    Scared to look at my stocks and shares portfolio but I won't sell anything. More concerned about the pension.

    It'll come back but no idea when. Need a crystal ball for that.

     
  • Southbank said:
    cafctom said:
    Did the big one time contribution to private pension today. Thanks for those who provided insight. Felt like a significant moment to part ways with a fairly big sum of money that I won't be able to touch for another 20 years at least, but I think its the right move. 

    I'm glad I just put it in cash (for now). Would have been quite a tough one to watch had it gone in the day before the worst economic moment in half a decade. 
    If you bought funds today you'd be buying at prices calculated at close of business today......and maybe close of business on Monday for US stocks (I  know @PragueAddick has something to say about this 😀) so you'd buying at the current "bottom". 

    So it might be worthwhile getting some invested asap. Maybe only 25% or 30% and then see what happens Mon & Tues next week. 

    Surely that is only true of funds? Individual shares are bought at the current price?
    Yes sorry, I was talking about funds. I'm not brave enough & also not allowed to advice on individual shares. 
  • edited April 4
    cafctom said:
    Did the big one time contribution to private pension today. Thanks for those who provided insight. Felt like a significant moment to part ways with a fairly big sum of money that I won't be able to touch for another 20 years at least, but I think its the right move. 

    I'm glad I just put it in cash (for now). Would have been quite a tough one to watch had it gone in the day before the worst economic moment in half a decade. 
    If you bought funds today you'd be buying at prices calculated at close of business today......and maybe close of business on Monday for US stocks (I  know @PragueAddick has something to say about this 😀) so you'd buying at the current "bottom". 

    So it might be worthwhile getting some invested asap. Maybe only 25% or 30% and then see what happens Mon & Tues next week. 

    And it still does my head in. I asked my new friend Claude about it, here is what transpired:

    Me: Yes, so based on UK time, if I place the order before 11.45 tomorrow, I will receive a price which reflects a valuation based on stock market closing prices at the end of today's trading?

    Claude: No - you'll receive a price based on tomorrow's market values calculated at noon tomorrow. Unit trust prices are "forward priced," so the valuation point uses current market prices at that time, not previous day's closing prices.

    Is that how you understand it, i@golfaddick ? So it means that if we place orders over the weekend we'd get prices calculated at mid-day Monday, which may well not reflect today's close for UK or Euro stocks, as they will have been trading Monday morning, but will reflect today's US prices? (Jeez, S&P 500 is now down 6% on the day)

    It really depends on when the funds are calculated. Back in the very old days of Thatcher funds were priced historically. That is,  they were priced at close of business & that price was used the next day. Then came along Black Friday and everything went pear-shaped. Not long after forward pricing came in & you dealt "blind" with the fund being valued at close of business & that was what you got. 

    I'm not sure when exactly funds are now valued. I believe some are valued at close of business and some are valued at 12 noon. I'll have to take a look at some of the funds my SIPP is in & report back next week. 

    But in essence, if you dealt today you'll be getting a price based on close of business today, but I'm pretty certain you wont get it  priced at 12 noon today. 12 noon Monday perhaps. A US fund may be priced at a different time entirely. 

    Btw..  ..I wouldn't trust anyone with the name Claude. Too French sounding 🇫🇷.
  • edited April 4
    Just checked my SIPP.  Of the funds that stated a dealing time all bar one was 12 noon. The "person of colour" in the wood pile was at 3pm. About a 3rd of the funds didn't state a dealing time. 

    What was interesting was that the Platform was showing a valuation date of yesterday (3rd). So it seems that the value of my SIPP was as at 12 noon yesterday.  So to answer @PragueAddick - I would have to say that my US funds were last valued at 12 noon Thursday. Before the shit hit the fan. So in reality the US element of my SIPP is 2 days behind & currently "overvalued" by around 10%. 

    😪😪😪.
  • se9addick said:
    redman said:
    bobmunro said:
    se9addick said:

    I’m not sure it’s accurate to say tariffs caused the Great Depression. 

    Correct. The Tariff Act of 1930 was designed to reduce the effects of the depression but in fact exacerbated it because other nations (as now) retaliated with their own tariffs and US exports plummeted.
    Need to be very careful in comparing what is happening now to 1828 or 1930. Don't get me wrong, there is no benefit to US in these moves. However US is much stronger relative to other countries than it was then. It will certainly hurt other countries much more. Responses need to well thought through and not knee jerk. I'm no great fan of Starmer but from a UK point of view I believe he is currently adopting the right approach. ie calm talk and little action. 
    I agree. Smashing a whole load of tariffs on American products will hurt us more than it will hurt the Americans. 

    We need to play the game and see if there’s a deal to be done which mitigates the damage without knee jerk reactions.
    I'm in two minds about tariffs.

    How can it be cheaper or better for the environment to ship wine from France to California when you can make wine there?

    If free trade is so beneficial, why retaliate against Trump's tariffs?

    I can see that jobs could be lost because of lower exports, but I can also see jobs created trying to increase self sufficiency.

    Trump is a clown and a bully and I hope the financial impact of his arrogance brings him down, but there may be unintended consequences to some of his policies that could paradoxically help the non-USA world.
  • edited 5:49AM
    Talking purely hypothetical here rather than any names in particular to remove the emotion from it, bordering on political in here, some people I've never seen on this thread before... Funny that... Anyway:

    What if you charged tariffs on imports, but then effectively "gave" that money back to your citizens through tax cuts, eg, we raise £x billion through tariffs, that means we can cut y% off of VAT (to keep it simple, I know it's not charged on some things but imagine it was).

    That would in theory go along way to mitigate the inflationary impact of tariffs, your domestic products don't just become comparatively cheaper (by making imports more expensive) they actually are cheaper. Foreign tariffs of 10% say, could pay for a let's say 2% reduction in VAT, meaning that foreign products are 8% more expensive, domestic products are 2% less expensive. All you really lose is a chunk of the economic efficiency of the foreign import's comparative advantage,  that's still material though, but would reduce inflation. I suppose it all depends on how different the prices are at the moment, ie if two products both cost £2, one will be £2.16 and one will be £1.96 now (a saving) whereas if due to comparative advantage domestic was £3 and foreign was £2, one would be £2.16 and one would be £2.94, a loss to the consumer. 

    Tariffs are definitely not a good thing but they are done by many countries (and trading blocs....), heard a good commentator on the radio the other day saying the logical thing is actually to not retaliate to tariffs. As many people have said, I think the idea of just not buying American wherever I can is a route I'm going down now. Having said all that, I do believe that the US has been subsidizing the world since WWII. Don't get me wrong, they benefit from it a lot as well, but this shift away from subsidizing the world is a post war zeitenwende that I don't think will be backtracked on by future Presidents. 

    For what it's worth, I don't think this will be as catastrophic as people think. Often in the past, tariffs have been incorrectly used as a tool to react to economic problems, and exacerbated them, rather than just something randomly popping up like it is in this case. It's not going to help anyone, but I think and hope it won't destroy the world economy. 
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  • edited 7:49AM
    Or you could impose swingeing tariffs and theoretically use that money to fund income tax cuts bigly. Either way whatever is raised is government money.
    Which might be ok, except that a consequence of huge tariffs will be that less is imported so your tariff income shrinks, and if you can't produce all the things you need domestically, prices on necessities will rise and cause inflation to your own industrial base and consumers. As ever, it'll be the lowest income people who suffer most. Not forgetting the retaliatory effect of your trading partners.
    It relies on the government using that tariff income fairly and not just dishing out benefits to, for example, the president's, for example, rich mates.
    Tariffs have their place to protect domestically important industries from foreign dumping eg Chinese steel, but tariffs are overall A Very Bad Thing.
    If you subscribe to the theory of comparative advantage (which leads to trading entities specialising in producing the things they're best and most efficient at, so everybody wins) tariffs erode and distort these efficiencies and everyone is worse off.

    If a country is so consumer led that it borrows to buy all the stuff it must have now now now, that is purely the fault of the country, and massive deficits are an inevitable consequence. The term subsidy in this context is a nonsense, purely a buzzword to get stupid people to buy into the process which will hurt them severely. US consumers wanted stuff, and the rest of the world sold it to them - why should they now be punished? And since when did, for example, the US ever do anything for nothing in return?



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