How Much Investment RISK Should I Take?
Рет қаралды 10,123
Күн бұрынIf you’re going to build wealth by investing, you’re going to need to take some risks - you literally can’t have one without the other. But risk is notoriously difficult to quantify and if you’re new to this it can be bewildering. So let me try and help you figure out the question "How Much Investment RISK Should I Take?"
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@minimad8793 Жыл бұрын
Thanks Pete. informative Video as ever. Let's see what the next 12 months pan out like.
@markhamilton7930 Жыл бұрын
Pete, as a financial writer myself I am constantly amazed at how you are able to turn potentially complex topics into clear and simple language / ideas (I know from experience it's not easy). It’s a wonderful gift you share with us and from which we are all the beneficiaries. Thank you big time!
@MeaningfulMoney Жыл бұрын
Mark, that’s very kind, and I’m humbled - thank you 🙏🏻
@Equitybonds24 Жыл бұрын
Thank you Pete. I am about to tackle AF4 Investment Planning tomorrow and this video was a welcomed break. I appreciate the content you produce :)
@MeaningfulMoney Жыл бұрын
Good luck, Bailey!
@RossHbn Жыл бұрын
Interesting points, thanks!
@MeaningfulMoney Жыл бұрын
Glad it was helpful!
@Unpronounceable. Жыл бұрын
Great information I learned a lot from this thanks!
@MeaningfulMoney Жыл бұрын
Glad it was helpful!
@talbotsunbeamer Жыл бұрын
Thanks Pete. Like another viewer wrote, the extra layer of complication at the moment is pound weakness. Great for my current portfolio (global tracker fund) but it's now of course more expensive to be drip feeding into.
@MeaningfulMoney Жыл бұрын
I understand, but the key words here are 'at the moment' - If you think we're going to be in this environment indefinitely, then factor that in, but if you think that this is a shortish-term blip, then you can maybe ride things out. Probably a bit of both? I've no idea, so for the most part I'm keeping things much the same.
@sid35gb Жыл бұрын
Oh! Seems like I’m the adventurous type. It would be nice to see video on at what point in time it’s worth scaling things back when approaching retirement to avoid sequencing risk.
@nax1807 5 ай бұрын
watching in 2024 and this is still bullet proof advice, good financial insight shuld stand the test of time.
@markymark7044 Жыл бұрын
With bonds taking a hammering would you advise upping from cautious to balanced ISA fund, I have a 6-10 year (when I intend the cash in for early retirement) ISA which is 60% Bonds, the rest Stocks & Cash, thanks for the advice in these uncertain times!!
@clivechallinor3862 Жыл бұрын
Hi Pete, great video but the more I think I understand the more I realise I am so out of my knowledge area, for example, I thought bonds were 'safe' but of late they have been hit hard. I am within 5 years of retirement with 100% in equity (I think it is, never really looked too hard)
@Jumka Жыл бұрын
Hey Pete, I’m yet to go into investing and I’ve come across your channel first to gather some research into what I should start doing, I’m a financially stable 23 year old with a low level job but spending less than I earn. Now that the markets have taken a dip I’ve figured now would be a good time to get started! I’m yet to create the 3 accounts like you state so I think that’s where I’ll start! Thank you!!
@gerardocrolla5894 Жыл бұрын
As someone who still invests in commercial property, I have a couple of investments which have decreased in value. It has been said to me before by an agent that you never sell at a loss, and as long as you don’t have to sell then don’t!! I also have equities and apply this rule to this investment class!! The only time a price of an investment matters I suppose is when you both buy and sell!! It’s a marathon not a sprint!!!
@MeaningfulMoney Жыл бұрын
Absolutely agree, Gerardo!
@craigross341 Жыл бұрын
Owning property through open ended funds like unit trusts is such a stupid thing it should IMHO be banned. I owned F&C Commercial Property. An investment trust. In a crash if panic merchants want to sell they can do so on the market, and the trust's discount can take the strain. With closed end funds they either stop redemptions or sell the best properties to suit those who're panicking.
@w0447862 Жыл бұрын
Hi Pete. Please can you do a video on investing when the GBP is low?
@MeaningfulMoney Жыл бұрын
I'm so not the person to make that video. Check out the Pensioncraft channel - Ramin will do a much better job than me!
@maltesetony9030 Жыл бұрын
Reassuring stuff - especially given the current panic re the state of the £!
@MeaningfulMoney Жыл бұрын
All a bit nuts at the moment, eh Tony?!
@maltesetony9030 Жыл бұрын
@@MeaningfulMoney Yes - I'm thinking of selling the orphans & investing in South American zinc.
@spacebadger99 Жыл бұрын
After years of 25+ investing I rate an 8.. 55 and having the backing of DB pensions so feeling adventurous with 'fun' GIA money. DC/SIPP pension/ISA mainly with "the name that cannot be mentioned" - guard at 80%/ dark-coloured rock and fiddel-ity.
@Timmy51m Жыл бұрын
As a fairly new investor/trader, I have found that a pretty good yardstick is can I sleep at night or am I thinking about it when I shouldn't be, and if either of those 2 things are true, then I'm taking too much risk or my position size is too large. You might only find out what your actual tolerance is by exposing yourself to enough risk so that you are uncomfortable with it, then dial it back a bit until you are okay again.
@ms9820 Жыл бұрын
Hey Pete, great video! It was through your podcast that made me start investing two years ago. At the moment I’m at a small loss, should I continue to contribute monthly payments?
@MeaningfulMoney Жыл бұрын
Yes, absolutely.
@8G00SE8 Жыл бұрын
The lifestrategy funds are interesting, 20% equity fund has lost more than the 60% equity fund due to being so heavily invested in bonds and their interest rate risk. It's funny that a lot of older investors like Ben Graham and Jack Bogle never advised going as low as 20% equity, and considered it a risky play. Going below 40 or above 60/70 in equity is actually market timing, you are saying that an asset class will perform in a certain way reducing portfolios risk which is in itself risky.
@simonwl Жыл бұрын
Love your videos Pete. Would you consider doing a video of retirement planner softwareb comparisons? There are a number around and most require subscription. I've used a couple of free ones that allow you predict if you have sufficient funds for different withdrawal rates during retirement. They seem to use the Monte Carlo simulation. I realise that you probably offer this service as part of your "day job", but it would be useful for those of us who are comfortable arranging their own portfolios to see if we're on the right track - and if the calculations of the software is accurate - but can't justify hiring the mega mind of Pete Matthews!
@MeaningfulMoney Жыл бұрын
HI Simon. Which software apps were you thinking?
@simonwl Жыл бұрын
@@MeaningfulMoney Hi Pete. I've used Flexible Retirement Planner (a free Windows Java app), Voyant free trial (which I think you use) and a couple of the free web based tools provided by investment companies which aren't very detailed. There seems to be a larger choice in the US. Rob Berger has reviewed a few on his KZfaq channel (e.g. Personal Capital) but you can't access them from the UK as they need a verification process via a US based phone number.
@Mikey_NoCap Жыл бұрын
Hi Pete, great content. Lots of news doom and gloom plus some pretty serious economic challenges ahead over the next couple of years. Pretty brutal swing in my Cautious portfolio in the last month, any tips on stopping me hitting the panic button and taking some risk off the table. I am contemplating a move to a more defensive approach to try to minimise the choppy times ahead.
@MeaningfulMoney Жыл бұрын
Yeah, I do understand. You'd need to define 'defensive' for yourself. Classically, that's a portfolio heavy in Bonds, and that's been the problem latterly. If not bonds, then what? Choppy times are, unfortunately, the price of entry for investors. If you can weather the storm, which will NOT last forever, then you'll likely come out well by holding your nerve. Beware big sweeping changes for short-term reasons.
@Mikey_NoCap Жыл бұрын
@@MeaningfulMoney wise counsel Pete, thank you.
@Jeffybonbon Жыл бұрын
Pound Cost averaging if i can push money a side every month and my time window is more than five i stick with trackers I am now pushing money aside to pay off my home mortgage in 3 years i use premium bonds and cash ISA we are seeing volatility in the markets but this is part of the game of investing i am sticking to trackers for my pension as i have no need for my SIPP funds for some years to come But If I did need some tax free cash i could take it even when the markets are down
@Flat-Five Жыл бұрын
Hi Pete, I have never set up a pension or any investments before (self employed) and have a question. When you add money each month to your pension pot, if you have a fund does it just keeping adding more to that fund or do you have to manually choose where it goes each time, perhaps putting it in other funds? Thanks for all the videos I’m just trying to learn how this all works and they’re very helpful.
@Jamieporthouse Жыл бұрын
Most investment platforms will allow you to set up a direct debit which purchases the same fund or funds every month. Once you’ve chosen your funds it’s just a case of keeping the payments up and reviewing once or twice a year.
@secretagentrandybeans7533 Жыл бұрын
I'm 30 so probably going to be investing for 30 years, I started 2 years ago. I currently have 50% of my money in an S&P500 ETF, 25% across gold and cash, and 25% in bonds. I also put my money each month into these places at the same percentage of what I had that month to invest, 50% into the ETF and so on. Do you think this is a good long term plan?
@janineboucher9971 Жыл бұрын
Score of 5.5 Investment period 11+ years I've got 2 years of investment into ISA s&s, all in equity (I believe) happy to ride the waves. I have been paying into NHS pension but thinking about opening a personal pension for a top up. I want a comfortable retirement! Or perhaps an early one.
@MeaningfulMoney Жыл бұрын
Good to know, Janine. You're thinking things through - that's the key thing to do!
@craftypam9992 Жыл бұрын
Glad to see someone else awarding themselves half points! I thought I was prevaricating, one of my favourite hobbies. I'm already retired, got my state pension last year. So I am obliged to start drawing from my SIPP within the next 8.5 years. But I doubt if I will need much unless I have to pay for care, as my state pension is almost double my living expenses (for the moment), and I have some cash deposits for emergencies, so the SIPP and ISA are currently (well, last time I checked) 97% equity funds. I check the balance quarterly and reinvest the dividends (and any new deposit I can make + the tax credit) to retain the closest match to my chosen balance of funds. When I do start withdrawing, I will probably take the maximum which avoids tax, and put it in my ISA. This is probably going to be the main reason for drawing from the SIPP, and I will likely start doing this when I can't make any more contributions.
@Jeffybonbon Жыл бұрын
I am a 6
@helixvonsmelix Жыл бұрын
3. Retire in 4 years, i will only add cash to SIPP when 18 months to go, so i get the tax back with zero risk.
@MeaningfulMoney Жыл бұрын
Sounds like a plan…
@mikeroyce8926 Жыл бұрын
Clearly buying UK gilts at the moment is very risky. Is shorting the pound on the futures market, currently a low risk investment? 🙃
@MeaningfulMoney Жыл бұрын
🥴
@yarrumblob Жыл бұрын
Hi Pete, my question is a bit off topic. I have been investing in the Vanguard FTSE Global All Cap which is heavily weighted towards the USA due to market share. Whilst the pound is weak against the dollar, would it be better to invest in a UK fund until the pound picks up? Or am I overthinking things should just stick to my original strategy? Your thoughts would be much appreciated.
@MeaningfulMoney Жыл бұрын
Could do that. I can’t comment on whether I would do that or not. I am the world’s laziest investor so I probably wouldn’t bother, but why don’t you try this and see how you get on? You’re not going to destroy you’re investments completely, and it would be a good learning exercise.
@jackpilkington6770 Жыл бұрын
Compare the performance (of your FTSE Global All Gap fund to UK Fund) on 5, 15 and 30 year scales. You may be surprised by the results.
@nathanwooldridge85 Жыл бұрын
@@jackpilkington6770 this is pretty much what I did when I started investing. Looked at the short/medium/long term performance of funds - as well as their associated fees/charges. As a longer (11+year) investment period I'm just ignoring the short term noise.
@coderider3022 6 ай бұрын
I introduced an index fund like this to compliment my boring (poor performing) multi asset fund. I’m 20yrs from being able to access it and 25 from my preferred date.
@stevegeek Жыл бұрын
Nice video Pete. I agree that personal experience with investing counts for a lot. Question. If you could invest in one thing only, looking at 3 - 5 year timeframe, what would it be? Cheers.
@MeaningfulMoney Жыл бұрын
Great question and NOT easy. Maybe some very short-dated global bonds. Tough call though. If in any doubt, I’d probably stick to cash, on the understanding that rates are rising and inflation will fall.
@stevegeek Жыл бұрын
@@MeaningfulMoney Thanks 🙏…
@craigross341 Жыл бұрын
Risk *isn't* volatility. If it was it wouldn''t be a good thing in options, which it is. Risk is the possibility of a loss that you can't insure against or diversify away.
@MeaningfulMoney Жыл бұрын
I absolutely agree - 01:33
@craigross341 Жыл бұрын
@@MeaningfulMoney I'll never understand that nonsense about 15-20 years ago when Riskmetrics managed to get going this idea that volatility was risk. This in a world where every trader uses Black-Scholes assumptions every day!! You couldn't make it up.
@craigross341 Жыл бұрын
Just thinking 🤔 Violent volatility much more compressed than your timeframe to sell out is a plus, for exactly the reason it is in options. If you want to take your pension at some point during a six month period, and your fairly indifferent within that period as to exactly when, violent zig-sagging around the trend line is a plus. It means you can sell out at a peak within that six months.
@Chills124 Жыл бұрын
Still young ish and its bizarre I actually want there to be a crash so I can buy even more tasty index funds... This has to be the slowest 'recession' Ive seen, hurry up already! 😅🤣
@mathewgallimore1484 Жыл бұрын
I scored 11, maths was never my strong point ......
@MeaningfulMoney Жыл бұрын
Hahahahhahahhahaa!
@michaelgeorge9147 Жыл бұрын
Score of 5
@MeaningfulMoney Жыл бұрын
Nicely Balanced, Michael!
@michaelgeorge9147 Жыл бұрын
@@MeaningfulMoney with a lot of information from your great channel over some years, thank you keep up the great work atb Mike
@156dave Жыл бұрын
Our company pension scheme uses a default called lifestyling It puts 70% of your pot into long dated sterling gilts in the last 3 years of your working life.This is supposed to be low risk I know people who have lost around 50% of a pot worth 500K with only 2 years to retire The pension scheme still charges 0.36% of the Pot to manage the loss What a joke😂
@MeaningfulMoney Жыл бұрын
I hate lifestyling. It’s too hands-off and one-size-fits-all. Better to be more intentional about it. Even with current markets a 50% loss is excessive though. Maybe the people you know are exaggerating slightly, or maybe not. They need to make some careful choices right now, and they may even need to defer retirement…
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