Question
I am 57 and just about to reduce my working hours down to 30 a week following a heart attack, I am wondering is it still wise to have a reasonable portfolio of unit trusts in isa's about £24,000 or should I be looking to reduce the risk of investing in the stock market now. I also have an investment bond with friends provident worth about £17,000. would it be better to go for a safer haven now?Answer
I think the answer really hinges on what your future plans might be. And I appreciate these might be unclear right now following your recent health problem.
Nevertheless it would be sensible to ensure that not all your investments are exposed to the stockmarket, whatever the future holds in store - the outlook for stockmarkets is especially uncertain at present and potential volatility high. I’d suggest a broad mix of cash, corporate bonds, commercial property and global stockmarket investments, although the optimal mix will very much depend on your future needs.
If, for example, you plan to retire at 60 and will have a pension that provides enough income for a comfortable retirement, then you might feel happy taking more risk with your investments in the hope of earning higher returns. While market falls will hurt, you can probably afford to stay invested until they recover.
But if you think you might need to draw from the investments sooner than later, perhaps to supplement pension income or to top up earnings following your cut in working hours, then falling markets pose a much greater threat. In this case you might want to take a more cautious approach.
If you think you might need additional income then try to work out how much. If you can produce this from your investments (a 3-5% yield is probably realistic, so £1,200 - £2,000 a year) without having to sell units, then all the better. Otherwise you should factor in withdrawals and take an even more cautious approach to reduce the likelihood of having to sell units after a big fall in value.
If you do decide to switch funds then it should be straightforward to do so within your existing ISAs and investment bond. In the case of the ISA consider moving the holdings onto a fund supermarket such as FundsNetwork, if you haven’t already, as this will make switching and managing the funds far simpler in future. There’s normally no cost to ‘re-register’ funds onto a supermarket platform.
Finally, if trail commission is being paid on the investments and you’re receiving no ongoing advice then consider either finding an adviser who will help in return for this commission or use a discount broker to get it rebated.
Hope this helps and best wishes for a healthy recovery.
I am 57 and just about to reduce my working hours down to 30 a week following a heart attack, I am wondering is it still wise to have a reasonable portfolio of unit trusts in isa's about £24,000 or should I be looking to reduce the risk of investing in the stock market now. I also have an investment bond with friends provident worth about £17,000. would it be better to go for a safer haven now?Answer
I think the answer really hinges on what your future plans might be. And I appreciate these might be unclear right now following your recent health problem.
Nevertheless it would be sensible to ensure that not all your investments are exposed to the stockmarket, whatever the future holds in store - the outlook for stockmarkets is especially uncertain at present and potential volatility high. I’d suggest a broad mix of cash, corporate bonds, commercial property and global stockmarket investments, although the optimal mix will very much depend on your future needs.
If, for example, you plan to retire at 60 and will have a pension that provides enough income for a comfortable retirement, then you might feel happy taking more risk with your investments in the hope of earning higher returns. While market falls will hurt, you can probably afford to stay invested until they recover.
But if you think you might need to draw from the investments sooner than later, perhaps to supplement pension income or to top up earnings following your cut in working hours, then falling markets pose a much greater threat. In this case you might want to take a more cautious approach.
If you think you might need additional income then try to work out how much. If you can produce this from your investments (a 3-5% yield is probably realistic, so £1,200 - £2,000 a year) without having to sell units, then all the better. Otherwise you should factor in withdrawals and take an even more cautious approach to reduce the likelihood of having to sell units after a big fall in value.
If you do decide to switch funds then it should be straightforward to do so within your existing ISAs and investment bond. In the case of the ISA consider moving the holdings onto a fund supermarket such as FundsNetwork, if you haven’t already, as this will make switching and managing the funds far simpler in future. There’s normally no cost to ‘re-register’ funds onto a supermarket platform.
Finally, if trail commission is being paid on the investments and you’re receiving no ongoing advice then consider either finding an adviser who will help in return for this commission or use a discount broker to get it rebated.
Hope this helps and best wishes for a healthy recovery.
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