Stick or Twist

[Kantwebefriends]

I do not have a SIPP.

Then use your last three years of working to fill one. Get started before the tax year expires. Quick!

If you qualified for your SRP before 6/4/16 then consider suspending it (google Pension Deferral and read the rules for the old-style pension). Also consider buying the pension topup by paying Class 3A NICs.

I am wondering if £100k in Investments and £200k in cash is the correct balance, you all disagree.

Personally I'd consider buying some gold. if you don't mind costs at the high end, consider buying gold sovereigns from the Royal Mint and storing them there. If you have some good way of storing them, gold sovs under your own supervision might be even better. There are also methods for storing gold (and silver) abroad (e.g. Zurich; Perth, Western Australia) and you can hold gold and silver ETCs in SIPPs and ISAs. The point is to invest in something or somethings that do not correlate highly with equities or cash while avoiding expensive-looking gilts.

Consider diversifying your cash. How much of it is in Swiss Francs or Singapore Dollars? How much in Premium Bonds? Have you ensured that you nowhere have more than £85k in any group of institutions that fall under the same banking licence? Etc, etc.

As for moving from cash to equities: the markets look high so if you are going to do it, do it gradually. Use the occasion of moving assets into SIPPs and ISAs to effect any rebalancing you feel you've been nagged into here.

[Kantwebefriends]

Thanks I didn't realise how valuable a DB pension was. In my case it also provides the same amount of pension for the wife if I died so I suppose it would cost even more.

Too true.

Question - When making a comparison of my Cash like Assets to my Risky Equity allocation in my overall portfolio would it be advised apply a discount to the capital value of a pension if I wanted to treat the pension like a very safe bond because the capital value of a pension is cash that you cannot ever get at so it is not the same as cash or a safe bond for asset allocation purposes.

I wouldn't bother, because the pension is more desirable in that it covers both of you for longevity risk, carries no term risk, and harvests the mortality credit (I think that's the phrase) whereby those who die early subsidise you if you live a long time. (If you die early you don't care because you are dead.) It also gives you what the wags call "dementia insurance" i.e. it makes no management demands on you when you are suffering cognitive decline.

Anyway, why bother discounting it? It's not as if you are likely to include it in rebalancing activities. I suppose you could discount the value of your house when you classify it as Equity, to allow for its being illiquid, indivisible, and undiversified; again, why bother? Same reason.

[Fairleas]

Personally I'd consider buying some gold. if you don't mind costs at the high end, consider buying gold sovereigns from the Royal Mint and storing them there. If you have some good way of storing them, gold sovs under your own supervision might be even better. There are also methods for storing gold (and silver) abroad (e.g. Zurich; Perth, Western Australia) and you can hold gold and silver ETCs in SIPPs and ISAs. The point is to invest in something or somethings that do not correlate highly with equities or cash while avoiding expensive-looking gilts.


.[/quote]

Any views on GLD ?

[Kantwebefriends]

Any views on GLD ?

Neither experience nor opinions.

On gold sovs I only wish I could think of a good way of storing them under my own supervision, in a way that guarantees that nobody knows I've got 'em and yet ensures that my widow will know where they are when she needs them. No luck so far.

[baldchap]

consider buying gold sovereigns from the Royal Mint and storing them there. If you have some good way of storing them, gold sovs under your own supervision might be even better. .

Any views on GLD ?[/quote]

I wouldn't buy from the Royal Mint, overpriced. Someone like Hatton Garden metals (can recommend) have a low premium over spot. http://www.hattongardenmetals.com/buy/

Buy a good (and heavy) home safe, and simply don't boast about your Sovs down the pub/to family etc.
Loose lips sink ships.

[Longtermyieldman]

No disrespect to those who've advocated it, but no way would I buy gold. It generates no natural yield, its price is driven by sentiment rather than fundamentals, the physical stuff carries storage costs and security risks while the synthetic involves counterparty risk. Plus, because more of it is being mined all the time, it doesn't necessarily follow that the long-run trend in value will be upward, whereas this is the case with shares, because profits are either reinvested within the company or paid out in dividends while retaining the entirety of the original asset.

[baldchap]

No disrespect to those who've advocated it, but no way would I buy gold. It generates no natural yield, its price is driven by sentiment rather than fundamentals, the physical stuff carries storage costs and security risks while the synthetic involves counterparty risk. Plus, because more of it is being mined all the time, it doesn't necessarily follow that the long-run trend in value will be upward, whereas this is the case with shares, because profits are either reinvested within the company or paid out in dividends while retaining the entirety of the original asset.

Fair point, but you will find not everyone holds for the same reason.
I don't hold for 'yield'. Companies go bust, banks can bail you in, but the gold is always there in my possession. I think of it like house insurance.
One third of your assets is IMO too much in gold or GLD, but 5-10% is not unreasonable.
Anyway, a discussion for another thread.

[Nemo]

First of all, with the markets hitting an all time high this past week, I would not be in any great hurry to be putting my £200K cash into the markets - keep the cash and wait for the inevitable downturn.

My views entirely - I wouldn't go into the market now at your age - it hs been inflated by QE and low interest rates

[Fairleas]

Thank you one and all.