Achieve Double-Digit Growth In Your Pension.
Want Better Growth On Your Pensions & Investments?
Here Is A Good Way To Do That.
You have worked hard to create a good profit in your business. You are investing in a pension for when you retire.
You get your annual pension statement and the growth disappoints.
Have you been there?
I know many have.
Here is a way to get better growth – at least double-digit growth
Many Have Lost Money
Recently, there has been some press concerning pension scams, where a number of people have been defrauded out of large sums of money and, in some cases, their entire pensions.
This is incredibly sad when a person has worked hard and paid into a pension for some time, then to have it taken away from them by some rogue organisation or scam.
Talking to many business owners over the years, it is evident that many are too busy to think about their long-term pension arrangements and, when they do, they invest into pension schemes that have poor returns.
I thought it might be useful if I shared some good advice on how I have invested into a SIPP for the past 4 years and where I have achieved a minimum of 15% annual return each year.
It involves investing in the global stock market but not by buying individual stocks and shares, such as BP or Shell, but by investing in Investment Funds, that are made up of many good shares, through a reliable and trusted platform called Hargreaves Lansdown.
You possibly have heard of Hargreaves Lansdown, as their representatives often appear in the business press or on the BBC, Bloomburg or CNBC with advice on pensions, investing and other business matters.
They operate a platform where you can buy and sell individual shares and investment funds. I have used this platform for the past 4 years and, as I have said, have achieved good returns on my investments.
Through this platform, I have three investment accounts:
1. SIPP pension
2. Tax free ISA
3. Other investments
Prior to 2014, I had my pensions invested in several orthodox institutional pension funds but I noticed the return was slowing, despite promises of good returns.
It Was Very Simple To Do
I was very simple to start.
I opened a Hargreaves Lansdown account and arranged for my pensions to be paid into one SIPP account.
I also had ISA savings which were doing very poorly too and I transferred these into another account, but this time an ISA account, free of tax.
In addition, I also had shares in a number of FTSE 100 and 250 companies and transferred these into a third ‘other investment’ account that was outside the SIPP and ISA wrappings.
Everything was done online through the Hargreaves Lansdown website.
My Average Return Has Equalled 15%
Since then I have achieved an average of 15% growth, year on year.
But also for four years now, I have had all my investments in one place and whenever I log into my online Hargreaves Lansdown account, I can see instantly how much each account is worth and what my total portfolio is worth too.
Then, with just a few clicks, I can see how each investment within each portfolio is doing, too.
Before I Transferred Everything, I did My Homework
Crucially, though, before I transferred everything, I did my homework for about 6 months before I took the plunge.
The Hargreaves Lansdown website allows you to research investment funds before investing, which means you can follow the performance of selected funds before you invest into them.
You just register and set up a ‘watchlist’ by adding Investment Funds to the list and monitor how the funds do.
Simply go to the Hargreaves Lansdown website, https://www.hl.co.uk
I Have Invested In More Than 40 Funds
During the past four years, I have researched very heavily the best funds to invest in and have invested in more than 40.
Investment values can go up and down, and it is possible to lose money, if you are careless.
The key is to spread the risk and this makes the whole process reasonably low risk.
An Investment Fund Is A Conglomeration Of Many Shares
An Investment Fund is a conglomeration of many different company stocks and shares, nominated by an expert fund manager. These funds could constitute as many as 25 or more shares in companies, sometimes from different parts of the world.
The idea is simple - if several shares decline in value, the whole value of the fund may not be affected as the risk is spread.
You can then spread the risk further by investing in a number of different funds. Then, if one fund value does drop, the others may not.
The one exception to this could be if there is a universal drop in all global markets, such as in 2008/9 banking crash and after the Brexit referendum.
Since I have been investing, I have reduced the number of investment funds down to less than 20 currently and I now have a very good idea of the ones to invest in for the best returns:
My Top 5 Investment Funds
Here are my Top 5 Investment Funds, currently:
- Lindsell Train Global Equity Class D Fund ~ last year’s growth 27%
- Fundsmith Equity Class 1 Accumulated Fund ~ last year’s growth 18%
- AXA Framlington Global Technology Accumulated Fund Class Z ~ last year’s growth 33%
- AXA Framlington American Growth Accumulated Class Z ~ last year’s growth 33%
- Baillie Gifford American Fund Class B Accumulated ~ last year’s growth 45%
The growth for all these funds for the past twelve months is very good, but each fund has also provided good growth for the previous two to three years, too.
Each fund is very well established and each is managed by very experienced fund managers, who really know their stuff.
How The Investment Fund Price Is Determined
Put simply, the total value of the fund is the total number of shares held multiplied by the value of each share. If the number of shares and/or their share price increase, so the total value of the fund increases and the fund price increases. Conversely, if the number of shares and prices decrease, so the total fund value decreases and the fund price decreases.
Many of the shares that make up the funds will pay dividends as cash or shares which go into building the total value of the funds. Some these of dividends can be paid out as cash – these funds are known as ‘income funds’
When the dividends are not paid out, and all or most the dividends are reinvested into the fund, this will also add to its total value – these funds are known as ‘accumulated funds’.
I Am Presently Favouring Non Uk & Non EU Funds
At the time of writing (September 2018), I am favouring specific non-UK and non-European funds because of Brexit and the doubts in these national economies. Some of my recommended funds do still feature UK and some European stocks, but these are in the minority.
I do think, however, if we have a hard Brexit or a ‘no deal’, all investment funds globally will decline in value.
I am tending to favour global funds that invest in several countries, especially the US but also technology funds that include the likes of Apple, Amazon, Facebook, Netflix and others.
Here, too, there could be threats – from President Trump’s trade wars and trade tariffs and the authority’s clampdown on the Technology companies.
You have to be mindful of what is happening.
I Have A ‘Plan B’
When I think values of one or more investment fund might drop, I will sell and will move the money into one relatively safe investment fund:
6. Royal London Sterling Extra Yield Bond ~ last year’s growth 6%
This is a 6th top tip and my ‘Plan B’.
The fund constitutes primarily UK bonds and its value and its price has a low spread but pays a healthy 5.5% dividend - so if the value of the fund does not rise, you still get paid a dividend which you can either reinvest into your portfolio or take as cash.
The price of this fund tends to move less than the prices of the other investment funds.