Best place to park cash in volatile times

[happyemailer]

We had kicked off the transfer of my wife's Scottish Widows Stakeholder pension (£70k) to a Fidelity SIPP just before the market went COVID-crazy.

So the good news was that the transfer happened almost at the peak of the Consensus fund she was using.

Given the uncertainty and volatility, we're thinking to feeding the cash into a Vanguard LifeStrategy fund (probably the 80%) over the next six months (to smooth, but also to see how badly Brexit and Covid impact the markets)

Does anyone have any views about what to do with the cash in the SIPP in the interim ?

(Something very low risk, but likely to grow more than 0%)

Fidelity's own tools suggest the "Fidelity Multi Asset Open Defensive Fund" or (with lower costs) "Fidelity Multi Asset Allocator Defensive")

But would welcome views !

[todthedog]

Have a look at CGT Capital Gearing Trust virtually a portfolio in itself. Great long term results the only active fund that I hold, very defensive and sleep easy.

The one downside I see with Lifestrategy funds is the UK bias.

[Gan020]

I have the same question although I'm even more risk adverse.

I have a considerable amount of cash in my SIPP which I do not think I will be depolying in the next 6 months.

If it wasn't in the SIPP I could get 1.2-1.3% in an instant access account with no risk to my capital. How do I replicate something like this as that would fit my objectives right now? I'm not exciting about using a fund as I worry about captial losses in the present climate.

[kempiejon]

Sometimes cash is the best place though isn't it. The question is do you think that time is now? No dealing fees, no spread, and currently low inflation. Even in a shares SIPP or ISA you can hold cash before while waiting to invest though just how long the government/provider thinks that is I believe is untested.

[richfool]

Sometimes cash is the best place though isn't it. The question is do you think that time is now? No dealing fees, no spread, and currently low inflation. Even in a shares SIPP or ISA you can hold cash before while waiting to invest though just how long the government/provider thinks that is I believe is untested.

My thoughts too.

I tend not to like the fact that with CGT or PNL one is paying a premium to buy in (and pay ongoing charges), in order to then still be taking a risk.

In times of great crisis, cash has many advantages.

[Clariman]

I am very cautious. My only equity investments are in equity ISAs - a combination of L&G, Vanguard etc. I hadn't done anything with my 2019-20 ISA allowance until recently. Although I had been tempted by Equity ISAs after the recent dip but decided to stick with cash for now. A 2 year fix at 1.5 for me and 5 year fix at 1.7 for Mrs C. I'm fairly relaxed about existing equity ISAs because we don't need the money just now. Hopefully it will return to previous levels at some point.

[fca2019]

LifeStrategy 20% has done well past 12 months. Bonds and gold have over performed. Bonds tend to be less volatile as well. Could also consider drip feeding over 12 months. It all depends on your timeframe.

[kempiejon]

I am very cautious. My only equity investments are in equity ISAs - a combination of L&G, Vanguard etc. I hadn't done anything with my 2019-20 ISA allowance until recently. Although I had been tempted by Equity ISAs after the recent dip but decided to stick with cash for now. A 2 year fix at 1.5 for me and 5 year fix at 1.7 for Mrs C. I'm fairly relaxed about existing equity ISAs because we don't need the money just now. Hopefully it will return to previous levels at some point.

I'm going to stick my neck out here and say it will return and go on to exceed previous levels at some point. That's why I invest in equities.
Your cash fixes are about standing still after inflation but over 2 years that's probably about all one can ask for. My equity investments have grown at an average of around 10% compounded annually over nigh on 20 years but over 5 and 2 year periods have seen some drastic falls and gains. Cash isn't volatile, inflation is the risk.

[SheikYaManii]

We had kicked off the transfer of my wife's Scottish Widows Stakeholder pension (£70k) to a Fidelity SIPP just before the market went COVID-crazy.

So the good news was that the transfer happened almost at the peak of the Consensus fund she was using.

Given the uncertainty and volatility, we're thinking to feeding the cash into a Vanguard LifeStrategy fund (probably the 80%) over the next six months (to smooth, but also to see how badly Brexit and Covid impact the markets)

Does anyone have any views about what to do with the cash in the SIPP in the interim ?

(Something very low risk, but likely to grow more than 0%)

Fidelity's own tools suggest the "Fidelity Multi Asset Open Defensive Fund" or (with lower costs) "Fidelity Multi Asset Allocator Defensive")

But would welcome views !

For six months do not take a risk, just leave it in cash if you can and feed into markets acording to your plan,I would never buy an IT for such a purpose, premiums can go to discount and bid offer spreads can increase during big falls.

[zico]

Agree with others that cash isn't a bad place to be right now. Gilt yields have become negative which means that big investors are paying governments for the privilege of lending them money.

[Jam2Day]

I think cash is always king for me, and for many of us, cashflow/generation is one of the key metrics we look for in our investments. Of course, by sitting on our hands we stand to lose on opportunity cost but that assumes we make the right decisions and that the alternatives are beneficial. On balance, as things stand, I personally think things will get worse before they get better and there is no substutue for value and buying power.

[richfool]

I've just been having a quick look at PNL Personal Assets and note despite all its defensive qualities, it is showing as having fallen by 7.2% in the last week (acc to HL website), though I suppose some would argue that is a lot less than many funds.

Another thought that occurs to me, is that surely its holdings of TIPS and index-linkers aren't going to be much use during a period of recession even with the stimulus being provided by central banks.