Why your pension is like a long-term relationship

Hands up if you’ve experienced the ups and downs of a relationship?

If so, you’ll know that the ups can bring some of the best times of your life and the downs can be…let’s just say, tense!

Then again, these things tend to balance out over time.

Which is all well and good…but what on earth is a company that specialises in pensions doing dishing out relationship advice?

Well, there’s another type of relationship that exists in your life that we do know a thing or two about. One that bears an uncanny resemblance to the emotional rollercoaster we’ve been talking about.

It’s your pension and how it’s invested.

Now, it’s likely that a fair proportion of your savings are invested in stock markets. And like the most tempestuous relationships, stock markets are always going up and down!

In fact, if you’ve seen the news recently you would have come across reports of the markets being particularly temperamental in the past few months.

If this has prompted the odd worrying thought, you are not alone. Especially if you stop to think where your long-term savings are.

The thing is, going up and down is what markets do. Recent activity is essentially business as usual and there’s nothing for you to unduly worry about.

The fall and the rise

As an example, let’s take a deeper look into the effects of Brexit.

Yes, we know. It’s all we hear about lately!

Still, it’s a good illustration of why stock market ups and downs shouldn’t keep you awake at night worrying.  

Let’s say, on the eve of the Brexit vote, all your pension was invested in the FTSE 100, (having all your pension in the FTSE 100 would be unlikely, but it’s just to give you a better picture of how the market performed at that time).

By the next evening, your pension would have dropped by 5.6% and people were predicting that things would keep going down. ¹

Yet, did you know that just a week later, not only did your hypothetical pension get back what it lost, it would have gained 3.8%? ²

Within a month, it had gained 6.2% and your pension would have been 21% bigger just 19 months after that Brexit eve. ³

Throughout the whole time, stock markets went up and down. Yet, they still grew.

Let’s face it, it’s only natural to be concerned initially when the markets take a tumble. The simple fact is history shows us that markets, as a whole, rise over time.

The crystal ball vs the power of what we know

There are some of us that would love to possess a crystal ball and see into the future. The truth is, no matter how hard you try, there’s no way to predict what is going to happen.

The good news is when it comes to your pension, it doesn’t mean that you can’t prepare for the future.

Learning to be disciplined with your investments is a great start. And if they are in a properly managed modern pension, in the long-term, the market’s fluctuations should generally balance out and your savings should grow.

So how do you know if your pension is as good as it can be?

To check your pension there is quite a lot of work involved. That’s why it makes sense to use a regulated specialist like us to do the work for you. And, it’s dead easy to get started.

Unlike a lot of other companies, you don’t pay a penny for us to carry out this work. You simply only pay a fee if you like our recommendation and ask us to act on it.  

Best of all, we use the power of what we know rather than guesswork.


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Important Information

¹FTSE 100 figures, 23-27 June 2016 - https://finance.google.co.uk/finance

²FTSE 100 figures, 24 Jun-1 Jul 2016 - https://finance.google.co.uk/finance

³FTSE 100 figures, 24 Jun-22 Jul 2016 and 24 Jun 2016 -2 Jan 2018 - https://finance.google.co.uk/finance

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The details provided in this article are for general information only and are in no way deemed to be financial advice. All of the material is correct as of the publication date, but could be out-of-date by the time you read the article. For our latest information and news, please see our articles section here.

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