The standard advice that is generally given to investors in this sort of situation is to make sure that their pension fund is invested in a portfolio that contains a broad range of assets, including cash, fixed-interest, property and equity funds.

This is to ensure that the capital value of their fund is maintained while it also generates a, hopefully rising, level of income. Equity investments generally form the core of such strategies, since shares tend to appreciate in value over time and therefore generally give the best prospects for appreciation of capital.

But we all know that there are periods when share prices fall, which is why some diversification is necessary, and while you are happy with the choices you have made from an investment perspective, it would be a good idea to review your portfolio strategy with a qualified independent financial adviser who could suggest the most appropriate asset allocation balance for your circumstances.

It would certainly seem prudent to have at least part of your portfolio in cash as a “buffer” against a market downturn, possibly in the sort of high-interest account you mention or a money market fund – and this sort of strategy can be set up relatively easily within the flexible framework of a SIPP.

Currently, it would appear that all of your retirement fund is invested in equity funds, which you are trying to protect against a downward move in the market through the use of stop losses.

This is generally a prudent approach, but your experience illustrates that it is not necessarily watertight. The success of a stop loss depends, to some extent, on the liquidity of the shares concerned and your experience highlights the fact that some investment trust shares can be relatively illiquid.

Many, particularly the more specialist investment trusts, are small (i.e. less than £50 million market cap), and have relatively low turnover in their shares. This can be an advantage to private investors who want to buy into certain trusts as they can often pick up small parcels of shares that would be unattractive to institutional investors. But the downside is that you can’t always sell when you want to, at the price you want you, and this is something to bear in mind when assessing which investment trust shares you wish to hold.