So why is the FTSE 100 nearly at a 52w high?
Discussion
avinalarf said:
Several apposite analogies here,that deserve comment.
The banking crisis of 2008 brought the financial sector into the media headlights,where it has remained on and off and still does so.
Undoubtedly that crisis has affected most of us,and arguably made life more problematical.
The more financially literate have rode it out adjusting their investments accordingly,the large majority have been left struggling,there is advice out there,but who to trust,and fear of the unknown and unfamiliar is a stressful problem for them to resolve.
I think we have several different debates going on......
1) The fall out from the crisis and how it affects the "man in the street"
2) How the crisis has affected the economies Worldwide,although for the "mits" let's focus on the U.K.
3) The perception that the top tier of bankers get paid an unusually large amount of money.
For the mits the machinations of banking and the financial industry are not intimately understood,and why would one expect otherwise?
The information a mits receives is either via newspapers or TV or nowadays through the Internet.
This information is often biased according to the agenda of the agency or person concerned,by biased a mean a point of view,it need not have a sinister intent.
The media especially newspapers are a business that want to sell newspapers ,so we get banner headlines that promotes a viewpoint which they think will sell more papers,so by their nature they have a populist agenda.
Therefore we have " Time to Bash the Bankers " or "The head of Goldman Sachs pockets $28million".
This promotes envy,mistrust and an easy target for the mits to kick,especially if he's having a tough time making ends meet.
Yup. Something the government has been keen to promote to distract from atrocious policy decisions. Throw in the media with their fatcat mantra and chants of "evil bankers" and you have yourself a very handy scapegoat.The banking crisis of 2008 brought the financial sector into the media headlights,where it has remained on and off and still does so.
Undoubtedly that crisis has affected most of us,and arguably made life more problematical.
The more financially literate have rode it out adjusting their investments accordingly,the large majority have been left struggling,there is advice out there,but who to trust,and fear of the unknown and unfamiliar is a stressful problem for them to resolve.
I think we have several different debates going on......
1) The fall out from the crisis and how it affects the "man in the street"
2) How the crisis has affected the economies Worldwide,although for the "mits" let's focus on the U.K.
3) The perception that the top tier of bankers get paid an unusually large amount of money.
For the mits the machinations of banking and the financial industry are not intimately understood,and why would one expect otherwise?
The information a mits receives is either via newspapers or TV or nowadays through the Internet.
This information is often biased according to the agenda of the agency or person concerned,by biased a mean a point of view,it need not have a sinister intent.
The media especially newspapers are a business that want to sell newspapers ,so we get banner headlines that promotes a viewpoint which they think will sell more papers,so by their nature they have a populist agenda.
Therefore we have " Time to Bash the Bankers " or "The head of Goldman Sachs pockets $28million".
This promotes envy,mistrust and an easy target for the mits to kick,especially if he's having a tough time making ends meet.
Bit tiresome for those us who are busy looking after our clients in good faith and trying to support our families just like anyone else.
Ozzie Osmond said:
IF I recall correctly it's possible to rattle through IFA training in a matter of months and then settle back to rake in the money with some routine box-ticking. The main skill required to make money as an IFA seems to be massaging clients' egos.
You recall incorrectly.Ginge R said:
Ozzie Osmond said:
IF I recall correctly it's possible to rattle through IFA training in a matter of months and then settle back to rake in the money with some routine box-ticking. The main skill required to make money as an IFA seems to be massaging clients' egos.
You recall incorrectly.Thankfully that is not the case now though. My IFA seems to have done a decent job with my SIPP and Offshore funds. The rest I self manage.
sidicks said:
avinalarf said:
Several apposite analogies here,that deserve comment.
The banking crisis of 2008 brought the financial sector into the media headlights,where it has remained on and off and still does so.
Undoubtedly that crisis has affected most of us,and arguably made life more problematical.
The more financially literate have rode it out adjusting their investments accordingly,the large majority have been left struggling,there is advice out there,but who to trust,and fear of the unknown and unfamiliar is a stressful problem for them to resolve.
Yes and no. Calling it a 'banking crisis' can lead people to believe that it was caused entirely be the banks, when the truth is much more complicated and would assign a large degree of blame to governments and individuals too.The banking crisis of 2008 brought the financial sector into the media headlights,where it has remained on and off and still does so.
Undoubtedly that crisis has affected most of us,and arguably made life more problematical.
The more financially literate have rode it out adjusting their investments accordingly,the large majority have been left struggling,there is advice out there,but who to trust,and fear of the unknown and unfamiliar is a stressful problem for them to resolve.
Certainly the after effects of the banking crisis can be blamed much more on government policy in the run up to the crisis.
avinalarf said:
I think we have several different debates going on......
1) The fall out from the crisis and how it affects the "man in the street"
2) How the crisis has affected the economies Worldwide,although for the "mits" let's focus on the U.K.
3) The perception that the top tier of bankers get paid an unusually large amount of money.
The top people in lots of industries get paid a lot of money. Bankers also pay a lot of tax. Why focus on bankers and not other high earning industries?1) The fall out from the crisis and how it affects the "man in the street"
2) How the crisis has affected the economies Worldwide,although for the "mits" let's focus on the U.K.
3) The perception that the top tier of bankers get paid an unusually large amount of money.
What is to stop other people joining banks an working their way up, if that is what they want to do?
avinalarf said:
For the mits the machinations of banking and the financial industry are not intimately understood,and why would one expect otherwise?
The information a mits receives is either via newspapers or TV or nowadays through the Internet.
This information is often biased according to the agenda of the agency or person concerned,by biased I mean a point of view,it need not have a sinister intent.
The media especially newspapers are a business that want to sell newspapers ,so we get banner headlines that promotes a viewpoint which they think will sell more papers,so by their nature they have a populist agenda.
Therefore we have " Time to Bash the Bankers " or "The head of Goldman Sachs pockets $28million".
This promotes envy,mistrust and an easy target for the mits to kick,especially if he's having a tough time making ends meet.
Agreed - headlines can be misleading and people can have a mistrust of things they don't understand.The information a mits receives is either via newspapers or TV or nowadays through the Internet.
This information is often biased according to the agenda of the agency or person concerned,by biased I mean a point of view,it need not have a sinister intent.
The media especially newspapers are a business that want to sell newspapers ,so we get banner headlines that promotes a viewpoint which they think will sell more papers,so by their nature they have a populist agenda.
Therefore we have " Time to Bash the Bankers " or "The head of Goldman Sachs pockets $28million".
This promotes envy,mistrust and an easy target for the mits to kick,especially if he's having a tough time making ends meet.
Edited by avinalarf on Saturday 13th August 10:22
I trust you understand that my posts are not necessarily personal to my thoughts or PoV on a subject.
I try to get into the heads of the mits and populist perceptions and put out a PoV that I hope reflects them.
Ozzie Osmond said:
Rather than just saying it's wrong, how about setting out the newly rigorous training that's needed today?
One thing is certain about IFA training - it ain't rocket science.
I will let Ginge answer this one BUT- Google is your friend:-One thing is certain about IFA training - it ain't rocket science.
http://www.moneywise.co.uk/forum/forum/general-mon...
Edited by bad company on Saturday 13th August 12:12
avinalarf said:
I agree with your comments.
I trust you understand that my posts are not necessarily personal to my thoughts or PoV on a subject.
I try to get into the heads of the mits and populist perceptions and put out a PoV that I hope reflects them.
I think the technical term you're looking for is 'trolling' I trust you understand that my posts are not necessarily personal to my thoughts or PoV on a subject.
I try to get into the heads of the mits and populist perceptions and put out a PoV that I hope reflects them.
Anyway, as this thread is so far off topic anyway avinalarf - here's something you might like: https://www.youtube.com/watch?v=2f2kGHcdJYU
Jockman said:
walm said:
Isn't the problem simply that at that stage in life, you are trying to take less risk not more.
And you genuinely need the income!
Not sure I understand you, walm. And you genuinely need the income!
Income drawdown can come in a variety of risk profiles from bonds / gilts to Nigerian Oil Fields.
Plus, you can start this sort of thing at 55, so only two thirds of your way through life.
My point is that some things have changed while interest rates have dropped.
1. Pensions, generally, have grown - i.e. the FTSE, bonds, hard assets etc... have risen in value.
2. Yields (on EVERYTHING) have gone down.
What hasn't changed (much) is the risk appetite and income needs of pensioners.
So, for example, you may have decided you wanted absolute security for your income and bought an annuity which happily covered your income requirement.
Happy days.
However, 7 years post credit crunch, a pensioner with the same requirements MAY BE WORSE OFF.
By that I mean that while his savings (pension, house etc...) may be worth more, it can't generate as much income WITH THE SAME RISK PROFILE.
In order to generate the same income (even with the LARGER ASSETS he has) he needs to take MORE RISK.
That, by any reasonable definition, makes him worse off.
I don't know the numbers - I was just making a suggestion as to why the FTSE going up wasn't de facto good news for everyone!
Perhaps I am wrong and almost everyone's pension portfolio is up SO MUCH that it compensates for the drop in yields.
But I strongly doubt it - mostly because people who are close to retirement don't tend to have huge equity exposure so will have missed much of the rally.
Fezzaman said:
avinalarf said:
I agree with your comments.
I trust you understand that my posts are not necessarily personal to my thoughts or PoV on a subject.
I try to get into the heads of the mits and populist perceptions and put out a PoV that I hope reflects them.
I think the technical term you're looking for is 'trolling' I trust you understand that my posts are not necessarily personal to my thoughts or PoV on a subject.
I try to get into the heads of the mits and populist perceptions and put out a PoV that I hope reflects them.
Anyway, as this thread is so far off topic anyway avinalarf - here's something you might like: https://www.youtube.com/watch?v=2f2kGHcdJYU
Off topic ......I'm not sure about that.
I think it's important when talking about a subject to try and see the bigger picture.
In my own business,mainly retailing, I quite often have to put myself in my customers shoes.
It is by understanding my customers motives and why they make a decision to purchase a product, that affects my product offer and how I display merchandise.
Often my customers motivations are quite different from my own.
Similarly the fact that the FTSE is at a high is driven by a range of factors,and they do not necessarily reflect the reality as one perceives it.
Edited by avinalarf on Monday 15th August 10:03
walm said:
I missed this reply, sorry.
My point is that some things have changed while interest rates have dropped.
1. Pensions, generally, have grown - i.e. the FTSE, bonds, hard assets etc... have risen in value.
2. Yields (on EVERYTHING) have gone down.
What hasn't changed (much) is the risk appetite and income needs of pensioners.
So, for example, you may have decided you wanted absolute security for your income and bought an annuity which happily covered your income requirement.
Happy days.
However, 7 years post credit crunch, a pensioner with the same requirements MAY BE WORSE OFF.
By that I mean that while his savings (pension, house etc...) may be worth more, it can't generate as much income WITH THE SAME RISK PROFILE.
In order to generate the same income (even with the LARGER ASSETS he has) he needs to take MORE RISK.
That, by any reasonable definition, makes him worse off.
I don't know the numbers - I was just making a suggestion as to why the FTSE going up wasn't de facto good news for everyone!
Perhaps I am wrong and almost everyone's pension portfolio is up SO MUCH that it compensates for the drop in yields.
But I strongly doubt it - mostly because people who are close to retirement don't tend to have huge equity exposure so will have missed much of the rally.
But will therefore have also been protected from the fall in yields?!My point is that some things have changed while interest rates have dropped.
1. Pensions, generally, have grown - i.e. the FTSE, bonds, hard assets etc... have risen in value.
2. Yields (on EVERYTHING) have gone down.
What hasn't changed (much) is the risk appetite and income needs of pensioners.
So, for example, you may have decided you wanted absolute security for your income and bought an annuity which happily covered your income requirement.
Happy days.
However, 7 years post credit crunch, a pensioner with the same requirements MAY BE WORSE OFF.
By that I mean that while his savings (pension, house etc...) may be worth more, it can't generate as much income WITH THE SAME RISK PROFILE.
In order to generate the same income (even with the LARGER ASSETS he has) he needs to take MORE RISK.
That, by any reasonable definition, makes him worse off.
I don't know the numbers - I was just making a suggestion as to why the FTSE going up wasn't de facto good news for everyone!
Perhaps I am wrong and almost everyone's pension portfolio is up SO MUCH that it compensates for the drop in yields.
But I strongly doubt it - mostly because people who are close to retirement don't tend to have huge equity exposure so will have missed much of the rally.
sidicks said:
walm said:
Perhaps I am wrong and almost everyone's pension portfolio is up SO MUCH that it compensates for the drop in yields.
But I strongly doubt it - mostly because people who are close to retirement don't tend to have huge equity exposure so will have missed much of the rally.
But will therefore have also been protected from the fall in yields?!But I strongly doubt it - mostly because people who are close to retirement don't tend to have huge equity exposure so will have missed much of the rally.
Perhaps that just isn't very many people... clearly not enough to worry the politicians..!
walm said:
I see what you mean but I am thinking of people approaching retirement who were in bonds and cash and who now can't generate any safe income and haven't seen much of an improvement to their pot.
Perhaps that just isn't very many people... clearly not enough to worry the politicians..!
People who were in (appropriate) bonds would have benefitted from massive gains due to the fall in yields!Perhaps that just isn't very many people... clearly not enough to worry the politicians..!
bad company said:
walm said:
people who are close to retirement don't tend to have huge equity exposure so will have missed much of the rally.
Really? Surely those close to retirement would chose equity funds and/or bonds to maximize income.That's what I did.
So at the beginning of your savings journey you might well be 100% equities because you can cope with the risk, want capital growth and don't care about income.
As you age, that risk profile tends to switch to less risky assets.
So you move into cash and bonds etc...
People close to retirement still don't need the income do they? That's for when they retire.
Good for you for sticking with risky assets as you have gotten older but that isn't the general behaviour.
walm said:
People tend to reduce risk as they approach retirement.
As a general rule, yes as they are advised to.There are even financial products that flip you in to lower risk funds when you hit a certain age etc.
I would imagine the growth in silver surfers, internet speeds, online platforms, life expectancy etc are starting to erode this paradigm and older people are happy to take (slightly) more risk.
sidicks said:
walm said:
I see what you mean but I am thinking of people approaching retirement who were in bonds and cash and who now can't generate any safe income and haven't seen much of an improvement to their pot.
Perhaps that just isn't very many people... clearly not enough to worry the politicians..!
People who were in (appropriate) bonds would have benefitted from massive gains due to the fall in yields!Perhaps that just isn't very many people... clearly not enough to worry the politicians..!
Most don't, do they?
Let's keep it simple - anyone hoarding cash is worse off.
Anyone wanting to lower their risk on retirement is worse off.
Or let's take a real world example.
If you had everything in investment grade bonds, the index is up from 189 to 203 over the last year.
So a 7.4% rise.
http://finra-markets.morningstar.com/MarketData/De...
But the annuity rate you can get (on £100k at 65) has dropped from around £5,800 per annum to £4,915.
That's a 15% drop.
http://www.sharingpensions.co.uk/annuity-rates-cha...
So the rise has NOT offset the drop.
Again, sure if you were in super risky assets right up to retirement then YES you might be fine!
walm said:
sidicks said:
walm said:
Perhaps I am wrong and almost everyone's pension portfolio is up SO MUCH that it compensates for the drop in yields.
But I strongly doubt it - mostly because people who are close to retirement don't tend to have huge equity exposure so will have missed much of the rally.
But will therefore have also been protected from the fall in yields?!But I strongly doubt it - mostly because people who are close to retirement don't tend to have huge equity exposure so will have missed much of the rally.
Perhaps that just isn't very many people... clearly not enough to worry the politicians..!
Maybe the politicians are looking at what they perceive as the bigger picture.
For instance QE and very low bank rate in theory to facilitate the expansion of business,cheap loans etc.,and thus enhance employment.
So they are prepared to sacrifice the income of the retiree to keep unemployment at bay.
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