Trump affected pensions ?

N

Nuttynuts

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Hi,
My pension funds have all dropped by about 8%...
Is this related to Trump ? My guess it is and hopefully I'm young enough to recover ! Wonder if anyone else has seen this reduction
 
Even a cursory glance at the news in the past few weeks would show you that markets in general have been volatile lately.
The Trump administration is one factor - maybe the main one - in this but there are always factors that cause market volatility.
You shouldn't worry about such fluctuations/volatility especially in a pension value.
As long as your pension is invested in an appropriate asset mix (very likely a high or all equity fund) and the charges are competitive you should just keep funding it and not worry about day to day valuations.
 
I've seen that dip too. They always recover (mine has already recovered some %). Don't panic and certainly dont try to cash in based on falling values. Any upcoming AVC contributions will be buying at a cheaper value anyway so it all balances out.
 
I looked at my pension values last week, saw they were down, shrugged and thought to myself that it's good timing for getting my annual bonus and making an extra AVC.
 
@Fortune Just wondering how you will do that if you are already maxing out your tax relief with AVCs? Dip in to next year's tax relief in advance and adjust your tax credits accordingly? Or just forgo any tax relief on that extra AVC?
 
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This is normal over the long run. For you to do anything about it, you would need to be right twice: Once, to time when to sell your position (e.g., move your money from an indexed equity fund to, say, a cash fund) at the top of the market, or at a place well above the bottom; and secondly, to time when to buy again at the bottom of the market. You might have to be right three times, if you decide to move your fund from, say, indexed equities to another asset class in hopes it does well under present circumstances.

In reality if you're far away from retirement, this will be a relatively normal event that will occur several times over your investment window and while yes, at the end of your days you'll be able to look back and say "if I sold here and bought here, I'd have been better off", for most of us mere mortal retail investors (as we are in our pensions) it's better to pick a strategy and keep at it.

If you invested €100 in the S&P 500 on Jan 1 2008, when the market went on to dip -37% that year, you'd have €400 today. Ride on.
 
It does give the jitters particularly if getting closer to retirement and the Trump factor will be four years and maybe his successor with possible conflict with the Fed and other issues ahead

Another way to look at it if you are at the higher rate and have employer contributions is you are gaining significantly the minute you make a contribution and it would have to fall 40-60% to wipe that out
 
C_Pike said:
it's better to pick a strategy and keep at it.
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This, 100%.

Emotional decision making is a disaster for investment- people buy near peaks because of fomo, and sell near lows to avoid losing more money.

If your strategy was sound on day 1 it'll still be sound on day 1,000 at least, and probably it'll still be sound on day 10,000.

mmclo said:
the Trump factor will be four years
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Form vs substance: there's a lot of noise but neither heat nor light in reality. Same as previous administrations- or (for example) did Barack Obama make affordable healthcare available to everyone but mainstream and social media are hiding that truth from us Europeans?

People vastly overestimate the ability of government (any government really but particularly democracies with regular transfers of power) to rapidly effect significant change.
 
mmclo said:
It does give the jitters particularly if getting closer to retirement
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These days, many people approaching retirement are going to be rolling the balance of their fund after taking a tax free lump sum over into an ARF, vested PRSA etc. and continuing to be invested in the markets. Not like in the past when the general (only?) option was to use the pension pot at a specific point in time to buy an annuity so volatility in the run up to that event was more of an issue.
 
I have a few pension pots, and because of the very well flagged uncertainty to come. i actioned an ARF on the largest of these in mid December, at a relative market high. The uncertainty was one reason, the other is i will probably commence drawdowns, from that specific ARF probably in 2027, so at least, 25 % of that fund is locked down, and was immediately reinvested in full in a 2 year 6% gross fixed rate savings account, albeit the balance, is currently affected, and has dropped circa 8%, since mid December, but i won’t be changing my strategy, will roll with it.

The other pension pots don’t concern me at all, as i will not need them for at least 10 years. Impossible to time the markets, but have to be a little more prudent as retirement approaches.

I can’t recall who told me to have multiple pots, that can be actioned independantly of each other, at a timing of my choosing, but it was a great bit of advice
 
Also bear in mind that if you’ve invested in a passive world equities fund, you will be automatically adjusted away from any fundamental dislocation of the US economy (and I’m talking autocracy overcoming democracy here!). It won’t be painless but nor will you be left holding the baby, as it were, if you had selected a US-specific fund like SPY.
 
fayf said:
Impossible to time the markets, but have to be a little more prudent as retirement approaches.
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This is pretty solid advice. Ok there are people who remain in equities all through their ARF period, and there's a worthy debate about when you should start de-risking (managing the downside risk against the fact that the biggest compound gains are to be had closer to retirement, when fund is largest), but for most of us, again, mere mortals it's best to play clever football as we age up. Again these don't need to be very fancy asset picking strategies - it's a bit of common sense with some research, as you say.

conor_mc said:
Also bear in mind that if you’ve invested in a passive world equities fund, you will be automatically adjusted away from any fundamental dislocation of the US economy (and I’m talking autocracy overcoming democracy here!). It won’t be painless but nor will you be left holding the baby, as it were, if you had selected a US-specific fund like SPY.
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True. I've been a proponent of US equities but went to world indexed when Trump won, just on the basis that he might do weird things. Indexes bias towards winners through the adjustments. And fundamentally speaking, the US remains the $30trn economy, if Trump screws it up so much that the market totally craters, there's probably mushroom clouds on the horizon and very little chance to retire in peace anyway. More likely they take a knock, the world rebalances, some other equities and asset classes go up, we move on with our lives.
 
fayf said:
i actioned an ARF on the largest of these in mid December, at a relative market high.
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What does "actioned" mean?
fayf said:
I can’t recall who told me to have multiple pots, that can be actioned independantly of each other, at a timing of my choosing, but it was a great bit of advice
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It should be possible to split an existing policy into a number of smaller policies as needed if this wasn't done from the outset.
 
It's the opposite of timing the market. Timing the market is buying or selling based on the current price of the stocks. Passive funds follow their rules regardless of the price.
 
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