Coronavirus finance/economy shizzle

Dirty Harry

Advisor to the Owner
I've got a small pension from years ago that I can take out this summer. Do I take it as an annuity, that pays me a small amount each month for the rest of my life, or do I take the whole lot as a cash lump sum and shove it in my own bank account, in case the Pension company ends up going tits up at some point in the future because of possible financial uncertainty?
 

Regardless

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Don't try and guess the markets! can probably be anywhere between 5000 and 7000 by next week in these odd times. Otherwise we'd all be rich ...well.....rich-er.....maybe
I have grown to think that this mantra is spread by IFAs who just want to pat you on the head and stop you thinking!
 

Regardless

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I've got a small pension from years ago that I can take out this summer. Do I take it as an annuity, that pays me a small amount each month for the rest of my life, or do I take the whole lot as a cash lump sum and shove it in my own bank account, in case the Pension company ends up going tits up at some point in the future because of possible financial uncertainty?
As some random bloke on the internet, I feel in a great position to advise.... 😁
 

kingpne

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What sort of company/equity would you consider being a possible winner?
In such times it's pretty impossible to say. Coca Cola would've been a good and pretty low-risk investment in mid-March given it went from circa 48 to 27 in a matter of days. It's a 'straight bat' reply, not necessarily a winner, but a solid pick.

Ones that interest me are the companies that sort warehouses, given the fall of the high street and continuously increasing popularity of online shopping. One to look out for. What do you reckon? @jakehake

I've got a small pension from years ago that I can take out this summer. Do I take it as an annuity, that pays me a small amount each month for the rest of my life, or do I take the whole lot as a cash lump sum and shove it in my own bank account, in case the Pension company ends up going tits up at some point in the future because of possible financial uncertainty?
@Lee Trundle may have some decent words on this.
 
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jakehake

Preachs PA
Staff member
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I've got a small pension from years ago that I can take out this summer. Do I take it as an annuity, that pays me a small amount each month for the rest of my life, or do I take the whole lot as a cash lump sum and shove it in my own bank account, in case the Pension company ends up going tits up at some point in the future because of possible financial uncertainty?
Pension funds are generally protected by schemes like your bank account is. An annuity will guarantee an income but rates are lousy so all depends if you want it something guaranteed or are prepared to gamble a bit with it to try and get some money from it over the next few years
 

Regardless

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As some random bloke on the internet, I feel in a great position to advise.... 😁
...but a lot will depend on your wider financial situation, personal needs, attitude to risk - and your estimated health prognosis.

For me, annuities are dull and reliable but the money men make you pay for that certainty.
I had some in a pension invested in Vanguard Life Strategies 60. No longer, I’m afraid because it does consistently well. Just checked and see that it is now priced at the same price as a year ago. Something like that could be worth considering.
 
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jakehake

Preachs PA
Staff member
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In such times it's pretty impossible to say. Coca Cola would've been a good and pretty low-risk investment in mid-March given it went from circa 48 to 27 in a matter of days. It's a 'straight bat' reply, not necessarily a winner, but a solid pick.

Ones that interest me are the companies that sort warehouses, given the fall of the high street and continuously increasing popularity of online shopping. One to look out for. What do you reckon? @jakehake



@Lee Trundle may have some decent words on this.
Note: this is all opinion and not advice (not that I'm regulated or even an advisor so I don't need to qualify it!)

I've watched various groups/forums spitting out all sorts of suggestions in recent weeks, from banks(Lloyds, Barclays, big US banks) to airlines(IAG, Easyjet) , to travel companies (TUI, JET2), infrastructure service providers (Capita etc) to food companies/distributors/online shops (Coca Cola, Bakkavor, Amazon, Ocado etc) to techs (Apple, Microsift, Tesla, Amazon, Zoom) to science (vaccine companies etc). All have probably made and lost enormous amounts if you are day trading over the past few weeks which is the risk when the markets are reacting day on day in ways that make it hard to fathom and the average investor has neither the time or the money to be tracking lots of stuff on a close basis and will generally lose out by not being able to react quickly.

There are plenty of trained professionals watching those stocks and providing diversity that helps smooth the problems when markets fluctuate so widely and I can't ever see past investing in Funds myself. It's worked Ok so far (even if I did have to contemplate crying when it lost a lot in recent weeks but that's mostly recovered). I'd be more inclined to think of a sector you think may do well and hedge with one of those or stick with the normal market leaders i.e. Fundsell Equity or Lindsell Train Global. If you think Tech is a good bet then things like AXA Framlington Global Tech or Invesco Markets if you have a US slant towards tech to track the NASDAQ more so. Or for the simplest options just use Vanguard Lifestyle stuff, slow and steady gets you to retirement but the younger you are the riskier I'd be currently in equities as there is a long way till you'll be allowed to retire and whilst tax relief is good if you are higher rate again take advantage of their benevolence as it will go before long I imagine to pay back corona!

Have a strategy rather than be swayed by market movements. Reacting is where people tend to lose more, if you pick an investment because you are happy with it and it looks solid then unless something changes your opinion fundamentally you should stick with it. That said, I don't like the "past performance is no guarantee of future performance", it may not be but it's a good guide whether the captain steering the ship has had a good idea rather than good luck
 
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jakehake

Preachs PA
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worth a look at, its paid off for me, short term investing, several times over the past few years.

It's ok if you sit at home on the internet every day*


(*excludes people sitting at work on the internet all day)
 

LostinSpace

PNE Exile
Patron
Am planning on having a dabble in one or two things in a few days, but certainly won’t be selling just yet.
Exactly right, the only reliable way to make money on the stock market is to hold onto investments long term. There's an old saying: "it's not about timing the market, it's time in the market".

Trading individual stocks is a mugs game, you're up against seasoned professionals with teams of analysts working behind the scenes, not forgetting the algorithms that do the number crunching for them.

I do the investments in my pension and only buy investment trusts and funds.
 

LostinSpace

PNE Exile
Patron
I've got a small pension from years ago that I can take out this summer. Do I take it as an annuity, that pays me a small amount each month for the rest of my life, or do I take the whole lot as a cash lump sum and shove it in my own bank account, in case the Pension company ends up going tits up at some point in the future because of possible financial uncertainty?
I transferred my pension to a SIPP. If you're unsure how to invest it then just buying a global tracker which suits your level of risk is the best option. Vanguard Life Strategy funds would be a good starting point. These invest in a mixture of stocks and bonds which just track the global market.

In the long term, you'll do a lot better than you would sticking it in a savings account but you need to spend a lot of time reading up on stuff to understand the options. Even after you've invested the money, you need to spend time keeping an eye on it. If you're not happy doing this, then I'd put it in the best annuity you can find.

A lot depends on your individual circumstances so avoid taking advice off the net (including me!). If you simply don't know what to do, then it's best to pay a financial advisor.

I honestly think that taking the whole lot as cash in one go would be a mistake. You get 25% tax free but other than that it's fully taxable so you'll end up paying 40% tax on anything over £50K, and that includes your wages.
 

Dirty Harry

Advisor to the Owner
I transferred my pension to a SIPP. If you're unsure how to invest it then just buying a global tracker which suits your level of risk is the best option. Vanguard Life Strategy funds would be a good starting point. These invest in a mixture of stocks and bonds which just track the global market.

In the long term, you'll do a lot better than you would sticking it in a savings account but you need to spend a lot of time reading up on stuff to understand the options. Even after you've invested the money, you need to spend time keeping an eye on it. If you're not happy doing this, then I'd put it in the best annuity you can find.

A lot depends on your individual circumstances so avoid taking advice off the net (including me!). If you simply don't know what to do, then it's best to pay a financial advisor.

I honestly think that taking the whole lot as cash in one go would be a mistake. You get 25% tax free but other than that it's fully taxable so you'll end up paying 40% tax on anything over £50K, and that includes your wages.
What scares me with the current uncertainty is what happened to my father in law who was hit by the Equitable Life scandal. He'd saved a big pension pot, then all the Equitable Life pensioners ended up getting ripped off when it went tits up. He managed to salvage only about a third of his hard earned pension pot through the legal processes. It's always put me off.
 

Sid Snot

Manager - East Cheam FC
Patron
I've got a small pension from years ago that I can take out this summer. Do I take it as an annuity, that pays me a small amount each month for the rest of my life, or do I take the whole lot as a cash lump sum and shove it in my own bank account, in case the Pension company ends up going tits up at some point in the future because of possible financial uncertainty?
A bird in a bush is worth two in the hand (y)
 

OOOO3

Forum Patron
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Good thread. Mines just been sat in my bank account or equity in my house and mrs has been buying gold.
 
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