is my pension knackered?

[paperclip]

i haven't really being paying much attention to my pention, but i'm aware that the world markets are in a bit of a heap.

i got a letter from my fund manager, saying they have a swanky new online system, so i could check out my pension.

i've got my money in 2 funds... 77.26% in an equitiy fund which has made me -1%!

should i be worried? or is this normal enough, and i should just leave it alone?

i've posted details below, any advice would be greatly appricitated.



<H1>50/50 Global/Euroland Equity Fun Analysis

Fund Investment Percentage: 77.26% of your funds are invested in this fund
Fund Performance (last 12 months): -1% -
</H1>

Irish Life Pension Consensus Fun Analysis

Fund Investment Percentage: 22.74% of your funds are invested in this fund
Fund Performance (last 12 months): 13% +

 

[ClubMan]

This is great fun!

50/50 Global/Euroland Equity Fun Analysis
Irish Life Pension Consensus Fun Analysis

Fund Performance (last 12 months): -1% -
Fund Performance (last 12 months): 13% +

Judging the performance of a long term investment like a pension over a relatively short period like a year is not really that meaningful.

Don't forget that you presumably benefited from significant tax/PRSI relief on contributions so this is a very tax efficient way of saving for retirement.

 

[paperclip]

This is great fun!


Judging the performance of a long term investment like a pension over a relatively short period like a year is not really that meaningful.

Don't forget that you presumably benefited from significant tax/PRSI relief on contributions so this is a very tax efficient way of saving for retirement.

cool... so do you think i should just leave it alone?

or decrease the % of the equity fund?

 

[ClubMan]

Unless you are within a few years of retiring you really should at least consider having most or all of it in one or more high equity content (up to 100%) equity funds and not paying too much attention to relatively short term fluctuations/volatility. But a lot depends on personal circumstances, preferences etc.

 

[paperclip]

Unless you are within a few years of retiring you really should at least consider having most or all of it in one or more high equity content (up to 100%) equity funds and not paying too much attention to relatively short term fluctuations/volatility. But a lot depends on personal circumstances, preferences etc.

cool, thanks

 

[derryman]

NO - I would argue that you need to review your pension funds regularly.

If you are at the top of an equity market and the future is gloomy then a 100% equity position should really be at least partially locked into cash until the clouds ar least clear, most "managed" funds are actually index trackers - eg consensus or managed by fund managers who rarely beat the index - so where does that leave you - locked into a downwards rollercoaster ride if you get stuck in equities as the markets fall.

Most good observers feel that a global depression is possible and a global recession likely (I am not going to argue the obvious here - look yourself)

In this extreme situation - a cash position is not a bad thing to lock in previous gains / funds invested - remember after dotcom and your funds were underwater by 50% - it took a 100% gain over the next four years to get that back.

So - in summary riding the indexes downwards is foolish - pinning your hopes on a top-class fund manager who will be doing the above and trying his best to get out at the top / in at the bottom / new markets early is OK - but they are so rare to find - why do Irish fund managers hold 20-25% in Irish equity when it accounts for less than 1% of european equity - VIs.

Yes the sheeple will go on about you can't time the market and dollar cost averaging - but a long term position is generally a bet that went wrong.

If you don't believe me - have a look at 10/15 year index performances

signed - happy in cash / commodities since june 2007 for equity holdings and june 2006 for property holdings - waiting for the recovery.

 

[ClubMan]

NO - I would argue that you need to review your pension funds regularly.

Please note that I never said not to do this. I did say not to be unduly concerned about relatively short term volatility/market fluctuations. I totally disagree about attempting to time the market on a long term investment such as a pension as you seem to be suggesting.