SigNet Slides 4 – Psychology and Decumulation

Big Picture Investors

Today’s post contains the final slides from a presentation that I gave to the London Branch of SigNet back in October.


SigNet is the Serious Investors Network.

  • They’ve been around for twenty or thirty years as a loose national association between a series of local groups organised along similar lines.

Annual membership costs £25, and that entitles you to attend as many local meetings as you wish.

  • If you live in London, where there are several groups, this can be quite good value.

On top of that you need to pay for a meal, as this is usually the basis on which the venue – often a room above a pub – was obtained for free.

  • As the last meeting I attended, the whip round for lunch and a coffee was £15 a head.

If there’s any money left over at the end of the year, it usually goes behind the bar at the end of the December meeting.

A typical meeting agenda includes:

  1. A review of everyone’s trades since the last meeting.
  2. A couple of presentations, sometimes from group members, other times from external people.
  3. A detailed analysis of a stock that someone is thinking about buying.

There are no presentations from companies, and it’s not an investment club in the original sense of pooled money being invested as one.

  • It’s more of a social club for people interested in stocks – a nice day out.
Me & SigNet

I joined Signet in late 2016, after attending the London Investor Show.

  • I went to around 20 meetings of two of the London groups (one daytime, one evening) before deciding not to renew my membership after the February 2018 meeting.

I felt that the recent retirement of the founder was an opportunity to bring the practices of the group up to date, but they instead reaffirmed their commitment to the original principles.

I kept bumping into Ray Williams, the new chairman, and eventually I persuaded him that I should explain to the group why I left.

My presentation

My presentation was a long one (90 slides).

Since my blog posts are an average of 1,500 words and are designed to be read mostly in five or six minutes, I have divided the slides into sections:

  1. Big Picture Investors
  2. Overview of 7 Circles
  3. It’s Good To Talk
  4. Psychology
  5. Decumulation
Psychology and Decumulation

Today’s post contains two short slide decks on the issues that I felt were both (1) very important to private investors and (2) ignored by SigNet:

  1. Psychology
  2. Decumulation (Spending in Retirement)

The slides are at the bottom of this section.

  • If there’s anything you don’t understand, or there’s stuff you disagree with, let me know in the comments below and I’ll try to sort things out.

You can enlarge the slide viewing window by clicking on the broken box icon to the bottom right.

  • I’ve added a slowish time out to advance the slides, but if you want to go more quickly, use the right arrow to he bottom left.
  • You can go back and pause with the controls next to that.

Until next time.

See also:  UK Investor Show, 18th April 2015

Mike is the owner of 7 Circles, and a private investor living in London. He has been managing his own money for 39 years, with some success.

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3 Responses

  1. Al Cam says:

    Could you say a bit more on why you believe a CETV > 21 times “annual pension” is your trigger for cashing in a DB pension?

    For example:
    a) do you mean ratio of CETV to annual pension at current age (if eligible to retire) or ratio of CETV to pension forecast for the so-called normal retirement age (NRA) from the scheme? Depending on how close you are to NRA these values could vary significantly as could the CETV too;

    b) why is this number rather different from the SWR number of 30-31 you recommend?

    • Mike Rawson says:

      I can’t think of a clever answer so I’m going to say that was a typo. It says 31 now.

      I meant CETV ratio to the pension at normal age (60 in my case). The last two quotes I got were at a 39 ratio.

  2. Al Cam says:

    Thanks for the response.

    39 seems generous, especially if you are/were less than 60 when your CETVs were calculated?

    IMO the ratio of CETV to “annual pension” needs to be treated carefully. In my particular case both the annual pension payable (in todays money at a future age) increases annually with inflation and the CETV changes too – primarily depending on age, bond rates and discount rate(s) applied.

    Hence in my case and assuming (somewhat unrealistically) static bond rates and unchanged discount rates, the nearer you are to a given retirement age (say 60) the higher this ratio will be!

    However, all DB schemes are not alike!

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SigNet Slides 4 – Psychology and Decumulation

by Mike Rawson time to read: 2 min