H&L SIPP - down 2% in 6 months

[Lockhouse]

You really are not cut out for the investing malarkey are you ?

The point of SIPP is pretty long term investment, think 20 years. If you are bedwetting after 6 months you have got the fundamentals wrong.

WFAS

[BrilloPad]

I once did go down 10% in 6 months. After 18 months I was flat. Then the cheeky sods advertised how they were up 10% during the last year. That caused me to leave.

[NorthWestPerm2Contr]

I am having trouble sleeping at night because there are so many bundles of twenties under my matress that its gone all lumpy.

I think it would take wild horses to get me to move from cash to shares

I agree with you here - I am putting all mine into property and hopefully buying a house in the next couple of months. The best way to save at the moment is probably to pay lump sums into your mortgage account and reduce the amount of interest you will be paying (I guess it depends on the mortage rate you have).

[pmeswani]

I once did go down 10% in 6 months. After 18 months I was flat. Then the cheeky sods advertised how they were up 10% during the last year. That caused me to leave.

Did they lie?

[BrilloPad]

Did they lie?

Its true they did not lie. But I felt it was deceptive. I remember November 1997 seeing alot of adverts for 10 year FTSE performance....

[pmeswani]

Its true they did not lie. But I felt it was deceptive. I remember November 1997 seeing alot of adverts for 10 year FTSE performance....

Deception is another word for Marketting. How else are they going to get more punters?

[BrilloPad]

Deception is another word for Marketting. How else are they going to get more punters?

True true. But it failed on me. Fortunately for them most punters are sheep.

[pmeswani]

True true. But it failed on me. Fortunately for them most punters are sheep.

You can't blame H&L for the poor performance of the Fund Managers.

H&L are pretty much safe as houses. I would rather have my money there than in the likes of a Publically owned bank to be honest.

[lukemg]

1. Get on fool.co.uk, you haven't got a clue.
2. FORGET any short term thinking - 5 years minimum.
3. HOLD YOUR NERVE, if you can't, then fixed interest only.
4. Check out pound-cost averaging, you should defo be staggering investments and automatically so you don't have to worry about the timing (you can't time the market).
5. Check out Trackers, majority of funds don't beat these over long time periods because the costs involved outweigh any decision making. These should be bulk of any starting portfolio.
6. Consider diversified HYP + Investment trusts.
7. See these dips as a chance to buy.
7. ALL my short term investments <3 years are down, ALL my long term are ticking over nicely(10% drop on a fund thats up 300% is easier to take).
Not in this for fun (although I do find it interesting), shares are a chance to get more money together than fixed interest but its also a good way to get less if you haven't got a clue.

[IR35 Avoider]

Took the plunge 6 months ago and decided to transfer all my small pensions into one pot (i.e. H&L SIPP). I did some research and picked 10 funds. To be honest, H&L make it a bit easier because they've got a recommended fund list to pick from anyway.

Started out OK, it was 2% up within a month, but now its 2% down overall. One of my funds is 10% down.

What do most people do in this scenario?

1. Sit it out because its long term and will go back up eventually.
2. Mess with it and bail out of funds that are losing etc.

You should assume that equity investments could fall by 50% or more from their peak at any moment. I think the UK peak-to-trough record is about 70%.

The normal yearly volatility is of the order of 20%.

You should have a plan and stick to it. A sensible plan would not require selling when prices are down. (Edit: By have a plan, I literally mean you should never find yourself in the position of having to decide whether or what to buy or sell. If you find yourself with any sort of discretion over what to do, your plan isn't specific enough, and you are opening yourself up to losses due to behavioural errors. Some people have a rule that any proposed change to the plan has to be quarantined for a year before implementation, just so they can be sure the change is not a reaction to current events.)

As someone has already said, you do need to educate yourself. It's not markets that are your worst enemy, it's the guy in the mirror that's going to cause you to lose money. (This is not a dig at you, it is true of the majority of investors.)

A classic investing book that might help is "A Random Walk Down Wall Street" by Malkiel.

Edit: In case I was unclear, a 2% fall is not a reason for selling any investment. Actually a fall is never a reason for selling an investment. If anything, it's a reason for buying more.