How to Start a Pension in the Face of Economic Armaggedon - The Bear and Badger

poprock

Keeping the share price high drives every single decision made in a public company. It’s the number one goal. It affects everything.

SpaceGazelle

poprock wrote:

Keeping the share price high drives every single decision made in a public company. It’s the number one goal. It affects everything.

No. Being a profitable company affects everything, including the share price. The share price is a reflection of how much cash you make or potential. Ethical companies should not float but that's another story.

SpaceGazelle

UK pension pots are annoying because they're about 60% government bonds. So they're essentially loan sharks for an already cash-strapped government that needs to put a wad into state pensions. It's daft really.

acemuzzy

I'm moderately sure Pop has more first-hand board experience than SG, but who knows...

acemuzzy

Slightly reminds me of folk mansplaining the police to Drew

SpaceGazelle

acemuzzy wrote:

I'm moderately sure Pop has more first-hand board experience than SG, but who knows...

What people mean by share price is profit. Share prices follow profit, not the other way around.

GooberTheHat

That's not entirely true though. Share prices follow anticipated profit, not actual profit?

acemuzzy

Even that's only partly true

SpaceGazelle

GooberTheHat wrote:

That's not entirely true though. Share prices follow anticipated profit, not actual profit?

Yeah, profit or potential profit. It's still decisions based on profit.

SpaceGazelle

acemuzzy wrote:

Even that's only partly true

Mansplain.

acemuzzy

Heh fair lol. Out now will say more what I meant later unless beaten to it.

poprock

SpaceGazelle wrote:

Yeah, profit or potential profit. It's still decisions based on profit.

Not quite. It’s about value, not profit. Or, if you want to be pedantic, it’s about profit for the shareholders, not profit for the company.

The share price is essentially what the financial market imagines (or decides) the company is worth right now. And what it’s worth right now is whatever the market will (hypothetically) pay for it. What the market might pay for the company right now is based on a guess at how much more the market might pay for it in the future. Because people buy a company (or shares in a company) now because they think it can be sold for a higher price later. So the share price is all about potential.

acemuzzy

Yeah, that basically.

acemuzzy

I was gonna also say about things like tax losses, cachet, dividend profiles, stonks, m&a plans, etc etc which aren't too do with the company's profits, but still impact share price. But it's basically all guesswork, with profit definitely an important factor for more established firms

Diluted Dante

TheBoyRoberts

acemuzzy wrote:

I still need to consolidate my three pensions into one place, but it's tedious if that one place isn't where my current pension is being paid, and I cba to move that. So I'll probably continue to do nothing and hope they each grow over time... I'm sure an actual pension adviser would tell me I'm an idiot tho. I forgot I also had an ISA ticking up too, so that's nice. I fear that's not going to bring my retirement forward any, tho...

It's well worth the small amount of hassle (like a form!) to get them shifted into one pot. I had two which we're not making much at all (yearly I was looking at about £1k max growth from the pair of them). Moved them into one SIP and stuck the whole lot into the UBS S&P500 (i couldn't choose the pot for my old ones either as once i'd left my old company, I lost the ability to manage them and they were in the basic managed scheme) and in the last 6 months since I transferred them, I've grown the pot by £9k with no additional investments.

Honestly, just get it done!!

acemuzzy

LivDiv wrote:

There are ethical funds. Funk is your man for those.

CALLING FUNK

Any thoughts on "Smart Pensions" and their three tiers of Sustainable Growth pension stuff?

I'm currently on "Smart Sustainable Growth - Balances costs with making a positive contribution to people and the planet" which says the following:

- Balances costs with making a positive contribution to people and the planet.
- Investments take into account environmental impact, social impact and how companies are governed.
- High focus on carbon reduction.
- For every £1 you invest, 13p is allocated across biodiversity investments and green bonds.
- Moderate risk - aims to achieve 3.5% return, however the value of your savings can go up or down in value.

Any thoughts on whether that's a sensible place to be doing things, vs. other offerings elsewhere??

acemuzzy

TheBoyRoberts wrote:

acemuzzy wrote:

I still need to consolidate my three pensions into one place, but it's tedious if that one place isn't where my current pension is being paid, and I cba to move that. So I'll probably continue to do nothing and hope they each grow over time... I'm sure an actual pension adviser would tell me I'm an idiot tho. I forgot I also had an ISA ticking up too, so that's nice. I fear that's not going to bring my retirement forward any, tho...

It's well worth the small amount of hassle (like a form!) to get them shifted into one pot. I had two which we're not making much at all (yearly I was looking at about £1k max growth from the pair of them). Moved them into one SIP and stuck the whole lot into the UBS S&P500 (i couldn't choose the pot for my old ones either as once i'd left my old company, I lost the ability to manage them and they were in the basic managed scheme) and in the last 6 months since I transferred them, I've grown the pot by £9k with no additional investments. Honestly, just get it done!!

OK, I've hopefully kicked this off for at least one of my two other pension pots into my Smart Pension place, to rationalise things a bit more. No obvious "S&P" option, but I've moved 25% to be invested into something that sounds a bit more like that, with 75% into the "Smart Sustainable Growth" thing from above. Fuck knows if any of that is sensible tho.

Now to go track down details of my other one to see what the fuck that's invested in...

acemuzzy

Looking at my other pension, current value is 70% higher than the contributions I've made! That's the benefit of paying in for 15 years I guess! Might just leave it be tbh if it's managing that kind of growth...

Diluted Dante

acemuzzy wrote:

Now to go track down details of my other one to see what the fuck that's invested in...

All in in Wilkos.

MattyJ

Diluted Dante wrote:

acemuzzy wrote:

Now to go track down details of my other one to see what the fuck that's invested in...

All in in Wilkos.

It's all in munitions, oil, and plastic.

tigersgogrrr

Slightly miffed I dropped the amount I was putting into my Vanguard account... Such is life. Needed a bit more emergency saving pounds for if I need to buy drugs or a Steam Deck. Still popping money in every month.

LivDiv

Emergency fund is important to be fair. A good pension in 30 years time is no good if your boiler breaks today.

That's my focus for the first half of the year, I have one but it needs improving.

RamSteelwood

tigersgogrrr wrote:

Slightly miffed I dropped the amount I was putting into my Vanguard account... Such is life. Needed a bit more emergency saving pounds for if I need to buy drugs or a Steam Deck. Still popping money in every month.

I guess this is an advantage of investing through an isa in that you can get to the money when you want if an emergency comes up

tigersgogrrr

Yeah... I'm investing into an ISA, not a pension. Long term savings but not necessarily for retirement. Teacher pension is excellent so that's not an area I'm worried about putting additional money into.

lastant

tigersgogrrr wrote:

Yeah... I'm investing into an ISA, not a pension. Long term savings but not necessarily for retirement. [My] pension is excellent so that's not an area I'm worried about putting additional money into.

Same here...been signed up to a Civil Service pension for a while now so the LifeStrategy 80% fund from Vanguard is there as a 'bridge' for potential early retirement or for more 'moonshot-y' opportunities that may pop up in the future.

Started putting something in monthly for a few years now, so have benefitted from a relatively flat (and low) base cost to get started - hoping to reap some rewards from that over the rest of the decade...

voices

poprock wrote:

Yeah, profit or potential profit. It's still decisions based on profit.

Not quite. It’s about value, not profit. Or, if you want to be pedantic, it’s about profit for the shareholders, not profit for the company.

The share price is essentially what the financial market imagines (or decides) the company is worth right now. And what it’s worth right now is whatever the market will (hypothetically) pay for it. What the market might pay for the company right now is based on a guess at how much more the market might pay for it in the future. Because people buy a company (or shares in a company) now because they think it can be sold for a higher price later. So the share price is all about potential.

Super late to this party, but thought I'd weigh in anyway....

My understanding is that, fundamentally, share price is supposed to be the present value of future payments from the share. I think that payments just means future dividends (discounted using a 'risk free' rate of return, which is typically taken to be the current yield on government bonds - edit - shouldn't be risk free, should be risk free plus a margin).

I recall from one of the actuarial exam materials (read 10+ years ago) that there was a study to compare share prices in the early 20th century with dividend payments since then, to see how good theory was in practice. It turned out to be absolutely terrible, implying the market is awful at predicting company fortunes in the long term.

RamSteelwood

SpaceGazelle wrote:

Hargreaves is known to be expensive. Just grab one from here: https://www.morningstar.co.uk/uk/news/195294/how-to-pick-a-fund-supermarket.aspx Yes, set up a monthly deposit.

just going back to the monthly deposit thing, do some of these platforms offer a direct debit to automatically buy more of the same fund? or is it a manual task?

cos currently i'm with iweb and there doesn't seem to be anyway to automate the process which is why i'm thinking of moving, but then i can't see anything mentioned with others i'm looking at so am I missing something or are you all just doing it manually anyway?

hylian_elf

You can set up auto purchase of funds, yes. On the website for HL, I think there’s some option of “what happens to my regular contribution”.

SpaceGazelle

The Nvidia shares have gone up nearly 30% in the past month. This is a little nuts.

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