Confused about what to invest in?

I'm taking over management of one of my pension pots, the choice is limited in terms of the funds I can invest in: a single passive global equity, a single passive bond fund (holding government bonds in major EU countries), and cash. There are a couple of actively managed funds on top, which I have little interest in.

The pot in question is about 270k, I'm 38, adding approx 37k annually in contributions (self & employer), and my goal is to grow it to €1m by the age of 50 when I can access it, to allow the option to do other things, if I should wish to do so.

Given the choice, my initial idea was to go with the standard 60/40 equity / bond mix. Now comes the fun part, if I listen to Gratham, equities are on the verge of collapse. If I listen to Dalio, the bond market is going to be flooded once the US, and other governments start looking to cover their borrowings due to covid.

What would you do, if you were me?

It's difficult to offer any meaningful response without a general understanding of your overall financial position.

When you say "one of my pension pots" I assume you have others - how are they invested?

Do you have a mortgage or material after-tax savings?

Do you have an idea of the allocation rate and fees on your various choices. This can have a substantial impact on the overall value at retirement age.

TheBig40 said:

Do you have an idea of the allocation rate and fees on your various choices. This can have a substantial impact on the overall value at retirement age.

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There are no allocation fees, just the on-going charges. The bond fund is 0.12% pa. Equity fund is 0.44% pa. I'll need to check with my pension provider what other charges are levied on top of those (if any).

Sarenco said:

It's difficult to offer any meaningful response without a general understanding of your overall financial position.

When you say "one of my pension pots" I assume you have others - how are they invested?

Do you have a mortgage or material after-tax savings?

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I've one other pot with approx 90k in it, 100% in equities, I can't access this one until I'm 60. I also have a mortgage (approx 55% LTV).

mojoask said:

I've one other pot with approx 90k in it, 100% in equities, I can't access this one until I'm 60. I also have a mortgage (approx 55% LTV).

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Thanks.

A 60/40 equity/bond split on your €270k pot would give you a 70/30 split overall (assuming you keep the €90k pot 100% invested in equities).

IMO that's a bit on the conservative side for a 38 year old. In your shoes, I would be aiming for an overall split of around 80/20. So, maybe a 75/25 split on the €270k pot.

Keep maximising your tax-relieved pension contributions and use any after-tax savings, over and above a reasonable cash buffer, to pay down your mortgage ahead of schedule.