5 Things You Should Do With Your UK Pension Right Now And The 1 Thing You Shouldn't
There is no denying that the bull run has finally come to an end and when it presents itself with a pandemic, the panic can cause people to panic which leads to sizable market swings. I spoke to a few of our Directors across different departments and they all seemed to share the same belief on what one should and should not do at a time like this.
1. Take Charge
If you don't have a wealth manager and haven't received a valuation in a long time from your pension company, now is the time to stop procrastinating and take charge of your pension. Get in touch with your pension company and ask for the latest valuation or better still, contact us! In most cases we can actually get the latest information for you and save you having to sit on hold for several hours. Use the contact address at the bottom of this newsletter to get in touch.
It is important for you to know what you are invested in and what the current value is.
2. Formulate a Strategy
Remember when you were younger and some advisor conducted a risk profile assessment with you? It’s time for you to do one again. You need to have a plan for your retirement and your pension(s) should form a good part of that retirement pot. There is going to be an opportunity for you to get into a new bull run close to the bottom and this can really help you boost the size of that pot. If you are unsure on how to do this then we can help.
Part of the strategy should include:
Analyzing your current portfolio,
Identifying what funds and stocks will be best suited to your investment strategy and timeframe. These products will vary depending on your age and time to retirement; depending on these factors you may want to stick to solid blue-chip companies or increase your appetite and look at funds that invest into consumer driven stocks with a large weighting on companies in the technology and telecommuting space, as an example.
Calculating an approximate shortfall (if there is one) and setting a goal.
3. Wait
The next thing to do is to wait. Now is not the time to buy. What appears to be a current end to the correction actually isn’t. We believe that we are on a corrective wave up of the ongoing bear cycle which will resume once that has completed. This particular wave might be very volatile and choppy and unless you have a lot of trading experience you should avoid it completely.
If however we see certain levels surpassed which correspond with several other market signals will we be satisfied that it is time to once again be bullish. Until we do then we have faith in our analysis and will be waiting until the real bottom comes in.
4. Timing
Do not try to catch the bottom. Once we see a confirmation that a bottom is in, we would wait to have confirming signals and possibly even the first wave of a new bull market. We reduced all of our clients’ to exposure about six months ago knowing that we would miss out on the last 4% or 5% of the bull run and we plan to do the same at the bottom end as well. Sometimes it just isn’t worth trying to reach out for every percent.
The last bull run lasted over a decade and saw the S&P increase by over 400% from the bottom of the bear market to the all time high so there is no need to risk unnecessary losses with so much growth ahead.
5. Invest
Once there is confirmation that the bear market is over and that the trend has turned bullish once again, it is time to invest in line with the strategy that you or your advisor has set out for you. By confirmation we are not referring to words of confidence by a President, your next door neighbor or the press, but your advisor or anyone with the experience to identify when this has taken place.
The What Not To Do
1. Bury your head in the sand
Many people get very nervous at times like this and think that if they don't look at the problem, it doesn't exist. This is the single most foolish thing you can do and if you take anything from this blog post, make it this; Take charge, formulate a strategy to take advantage of this situation, wait for the right time and then invest… and then invest some more but first and foremost, take charge.
If you would like to schedule a telephone meeting one of our consultants please email info@loadstonegroup.com or visit us at www.loadstonegroup.com
