PWFUK - interested to know why you think my strategy outside my SIPP is the opposite of what someone my age should be doing? My rationale is that if I blow out, I'm young enough to recover from it and at least I would have safe and secure investments elsewhere in the SIPP. I'm a stickler for risk but wouldn't go near anything like binaries etc, I prefer to buy and hold rather than buy and sell, albeit with stock that is higher risk than what the usual investor would be comfortable with having in their portfolio. Genuinely interested to hear your thoughts to see what I can learn...
This is what I'd have wanted to know in my mid-20s:
There are different types of risk. One flavour of risk is that you invest everything in one company that goes to zero (eg Enron). This is obviously a bad thing. You get around this by diversifying. So if you invested in a Japanese index fund, with 100 companies in it, the likelihood of all those companies going to zero is vanishingly small, however you are exposed to the risk that the whole country barely grows for a decade. You get around this by investing in different countries (a world tracker is great, but there are other good options too). Once you are diversified enough, the type of events that would cause your entire investment to go to zero are the type of events that money won't help you with (collapse of the entire economy or government, alien attack, zombies, all out war).
Another flavour of risk is that you need to sell your equities when they are worth less than you'd like. If you have 100 shares in Tesco, or VW, or the FTSE100, then that represents an ownership in all the stores, factories, contracts, and stock that make up those companies. The inherent value of these does change over time, but the price tag (the stock price) changes much more, and much more rapidly (like the Tesco accounting issue or the VW emissions thing). It's like the pricing at Amazon, the inherent enjoyment of a book doesn't change if it is 50% off today compared to being full price yesterday. However, if you need to sell your shares on a certain date (say you are buying a house), you are a forced seller, so you need to take whatever price you are offered for the shares on that date. If you have no need to sell the shares, then it doesn't matter to you what the share price does in the interim. In a way, the sticker price of your pension is totally irrelevant to you until your 58th birthday (the inherent value of it is important, but a market crash doesn't change the inherent value).
Another flavour of risk is that you save into your pension (or FIRE fund) and the growth isn't enough to sustain your spending. This is particularly acute when there is high inflation (so if you hold your money in cash, while there is a tiny tiny risk it could go to zero, and it isn't volatile, it is losing value everyday).
In your SIPP, you need to be diversified, but your bond fund would relate to only one country. You can totally accept volatility - it doesn't matter if your investments go up and down as long as the general trend is up (by the time you are taking your pension you can switch to something less volatile). You need to make sure that your SIPP grows enough to support your spending by the time you can access it, so inadequate growth is risk that you want to avoid. A bond fund trades the volatility risk that you can accept for the risk of adequate growth and concentration in one country, that you shouldn't be taking.
That's why I'd be putting 100% global equities in the SIPP for a 20-something. This is not advice, DYOR.
I do have quite the appetite for risk
You know the saying "everyone has a plan until they get punched in the face"? Many, many 20-somethings think they have a high risk appetite. Until you have actually lived through seeing a decade's earnings drop by 30%, 50%, or more, you don't know what your risk tolerance is.