“It’s not a hardship from my point of view. It’s interest and pleasure, as well as keeping an eye on one’s own holdings,” he says.
Take (some) risk – even if it means buying Bitcoin
Bitcoin caused much discussion at the Moneybucks club when Mr Pannett suggested that they invest in the digital currency.
Describing himself as between cautious and bold, he managed to persuade his fellow members following initial opposition. They doubled their money – but could have made even more had they taken more risk, Mr Pannett says.
“They were much more cautious than me. But I did manage to persuade them that, knowing it was a risk, we should buy into it,” he adds.
“The other members got very cold feet and said for goodness sake let’s get rid of this before we lose on it. I was outvoted and being democratic we went with the vote. And it went up fourfold just after we sold.
“So I am prepared to take risk – a limited risk. I wouldn’t put a lot in but we could have made several thousand pounds if people hadn’t got cold feet.”
Knowing your personal attitude towards risk is key, says Laith Khalaf of AJ Bell, the investment company.
“The general rule is that as you get older, your risk tolerance declines,” he says.
“If you’re 85, the ups and downs in the market really do matter. Because if there’s a down, as we’ve seen in the past in the markets, it can last several years. And if those are years towards the end of your life, that can have a serious impact on your finances.
“Everyone needs to reflect on their own personal situation, how much wealth you have, how much risk you’re going to take, and the balance between income and growth, potentially with a view to passing assets on to the next generation as well.”
Wealthy investors can afford to buy some riskier investments, adds Mr Khalaf. One “very high-risk” option is stocks quoted on London’s junior Aim market, some of which can be exempt from inheritance tax.
He says: “I would encourage people to take an interest in their finances regardless of age. But you probably shouldn’t be gung ho with your portfolio in your 80s in the same way that you might in your 20s.”
Alice Guy, of Interactive Investor, a rival company, says “de-risking” too early could actually be a mistake for older investors because “risky” assets such as shares tend to grow more over time than bonds and cash, and are more likely to beat inflation.
“Leaving some of your portfolio invested in the stock market in retirement is one of the best ways to boost your wealth, even if investment returns aren’t guaranteed,” Ms Guy adds.
“Keeping a healthy cash buffer and investing in a mixture of shares, bonds and cash is a good way to keep your portfolio growing and also minimise volatility.”
