The government made a huge change to pensions – from 2015 you can do what you want with your private pensions at 55 subject to marginal tax rate. This mean that you are NOT forced to buy a stupid Annuity or have income drawdown restrictions on your personal pension!
Download the udget_2014_greater_choice_in_pensions_explained.pdf from the government web site.
For example if you had 400k in your private pension then take 100k as cash tax free, the rest you can take out subject to normal tax rate in that year – so if you have retired at 55, and take out only 10,500 you pay no TAX!.
Hargreaves Landsdown stock – the provider of SIPPS rallied 15% on the news and the annuity providers were sold off – it is anticipated many more will contribute to SIPPS.
So plan to have 400k at least in your private pension by 55 – then sell the Porsche for a LAMBO! or pay any debts on your buy to let portfolio or buy the villa in south of france…..its entirely up to you..
Construct your portfolio now of the following:
Recovery plays – Good Companies which are broken but are coming back.
Stocks below have made dramatic gains in less than 3 years:
Sports Direct 60 o 800
Thomas Cook 20 to 180
SuperGroup 300 to 1700
DIxons 20p to 50p
HPQ 12 to 30
RiteAid: 1.50 to 6.50
2CentView model identifies when broken companies earnings expectations are expected to rise but the stock price has not reflected this change.
Low Beta Income stocks
BP, DLG, Scottish and Southern – now SBRY.
Buy these companies when there is potential upside of 15%-25% and dividend carry of between 4 and 6%. e.g. $SBRY FV=360, carry = 6%!
the Hardest to play – you need to know what you are paying for the growth and whether you think it can meet these expectations (use the PEG as a guide). If you are right gains will be big, but so also is the risk – the stock will be savaged and you will lose a lot if the company fails to meet the expectations.
Important to stick to stops on these.
2CentView model shows that growth stocks fall into 4 categories (over 5 years): low (5-15), moderate (15-35), High (35-50), Super(50-80)
Low: Apple, MSFT, HPQ, IBM, Oracle
Moderate: Google, GOGO, FSLR
High: FaceBook, AMZN, NetFlix, Tesla, GIMO
Super: FUEL, Twitter