Pension taking a hit

Dave Vanian said:

I'm curious as to why you were in cash before August 2021 and what prompted you to switch then?

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I was always in the default lifestyle strategy. When i looked at the graphs over the last few years the equities option looked more attractive. Not soon after i joined it started to nose dive. Hopefully things will recover in the next few years.

bitethebullet said:

I was always in the default lifestyle strategy. When i looked at the graphs over the last few years the equities option looked more attractive. Not soon after i joined it started to nose dive. Hopefully things will recover in the next few years.

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Thanks. It sounds like you weren't in cash but were probably in a mixed asset fund. As a general rule, over the long term a pure equity fund would be expected to do better in a rising market than a mixed asset fund. If you were looking at graphs of past performance last year when most funds were on the up, that would probably be what you saw. However, I hope your broker explained to you that during a market fall, a pure equity fund will be likely to fall further and faster than a mixed asset fund too. With over a decade to go before you retire, I think you'll be fine, especially if you have monthly contributions going in and buying at lower prices. Hold the nerve (or stop looking at it altogether.)

Sarenco said:

The DOW ultimately fell by 89% from its 1929 peak.

I'm not saying it's going to happen, but a further fall of 50% in real terms from where we are today is certainly within the realms of possibility.

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On that basis, anything is within the realms of possibility.

An amateur winning the Masters is within the realms of possibility.

My son playing for Manchester United is within the realms of possibility.

Gordon Gekko said:

An amateur winning the Masters is within the realms of possibility.

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Well, no amateur has ever won the Masters before.

But the global stock market has fallen by 50%+ in the past so there is historic precedent.

Again, I’m not predicting anything.

Gordon Gekko said:

On that basis, anything is within the realms of possibility.

An amateur winning the Masters is within the realms of possibility.

My son playing for Manchester United is within the realms of possibility.

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Of course its very possible that the stock market coukd fall further and fall significantly. To say otherwise is irresponsible.

jim said:

Of course its very possible that the stock market coukd fall further and fall significantly. To say otherwise is irresponsible.

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Respectfully, I disagree.

I also argued against a 50% fall from current levels, not against further falls.

It’s analagous to contradicting someone who’s arguing that an amateur won’t win the Masters by pointing out that Francis Ouimet did in fact win a Major in 1913.

50% falls on top of 20-25% falls are like hen’s teeth.

Gordon Gekko said:

It’s analagous to contradicting someone who’s arguing that an amateur won’t win the Masters by pointing out that Francis Ouimet did in fact win a Major in 1913.

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Amateurs actually won golf majors as recently as the 1930s. But no amateur has ever won the Masters.

Anyway, you said that stock prices "couldn't" fall by 50% on top of a 20% fall.

They could actually. They have in the past and may well do so again at some point in the future.

Pedantry is alive and well.

“Markets fell by X% a hundred years ago so it’s mad to say that they can’t do so again.”

Are probability and possibility not two different things.

That's all folks...

We had this discussion before