Your pension fund is down in Value? 1 BIG thing that is likely to have happened?
EXPOSURE!
Your Pension Fund will have exposure to the Stock Market. Depending on your financial circumstances, age and other factors, and on advice from your Pension Advisor, this might be anywhere from 20% to 80% exposure.
What is likely to have happened to your Pension Fund?
Well that’s hard to say. Since Jan 1st to March 25th the S&P 500 Index (biggest 500 companies in the USA) has fallen in value by -24%. At one point it was down -31%. This was the fastest decline since 1933. It may have stopped, or it may have further to go, nobody knows. As there are a vast array of pension funds options available, you may have had anywhere from very little to 100% exposure to the stock market crash. You need to understand what your exposure is.
So why would any sane person invest in anything other than putting their money under the mattress when you look at the rollercoaster pension investors have to put up with?
The answer is simple. Despite these severe and always unexpected events if you had invested $10,000 in the US Stock Market on Jan 1st 1987, by the end of February 2020 it would have been worth $170,200. That’s a gain of 1602% or 8.97% per annum compounded.
However, it’s never an easy straight forward path and nobody should ever just place a bet on the stock market hoping it comes good just at the right time.
I hope you found this useful, feel free to comment or ask a question?
More details here if you need it : https://guardianwealth.ie/worried-about-my-pension-fund/
Stay safe and take care!
Joanne