Hypothetical Question

[citychap26]

Hi All,

Say if someone had invested £400 in 1984 what should it be worth now?

I know that the FTSE ALL Share had gone up by about 6 or 7 times. Also BoE interest rates were high in the 80’s and 90’s.

I’ve looked at an inflation calculator and it gives me a figure of circa £1,100.

also I believe If it had been invested in the S&P500 it would have gone up by 12% a year, is that a fair assumption?

Cheers

Sunil

[greygoose]

If you had bought Berkshire Hathaway £400 would have been approximately $572 at the start of the year, your shares would now be worth $158,000.

Edited by greygoose on Wednesday 27th January 00:43

[citychap26]

Okay, that’s an extreme...

Say that trustees were “meant” to be looking after it and using their professional judgement.

[Benbay001]

citychap26 said:

Okay, that’s an extreme...

No, its not extreme.

Id say Berkshire is less risky than FTSE all share.

https://en.wikipedia.org/wiki/Berkshire_Hathaway

[thebraketester]

400usd of apple shares in 1984 are the thick end of 500,000usd now. ~120,000%

[The Rotrex Kid]

If you’d bought GameStop in July 2020 $400 would be worth $20k right now.

Bonkers.

[anonymous-user]

citychap26 said:

Say that trustees were “meant” to be looking after it and using their professional judgement.

I understand where your question is coming from. It is unfortunately impossible to answer without knowing a lot more about the overall context about,
The trust
Its purposes
Its beneficiaries
Its tax status
Amateur or professional trustees
Whether income has been paid out
Trust expenses
etc

£400 of stock market investment compounded for 40 years should produce a much higher number than simply adjusting the starting point in line with inflation. If you ask Google the question there are various sites which can indicate approximate returns. The key thing is that stock market gains through the 1990s were absolutely huge.

[Mr Overheads]

£400 at 12% net (i.e. after fees) return per year with the 12% added to the capital each year i.e.12% compound woudl be worth £26500 now.

[Ayahuasca]

If you had put your money under the mattress until 2008, then bought Bitcoin at launch, you would now have ... 18 billion dollars.

[citychap26]

Hi,

Just scanned messages, I’m doing morning chores. Will respond with a little more detail later. Obviously I can’t name names and also can’t put real values in (let’s just say there has been some serious gross negligence.

Cheers

Sunil

[Simpo Two]

citychap26 said:

Just scanned messages, I’m doing morning chores. Will respond with a little more detail later. Obviously I can’t name names and also can’t put real values in (let’s just say there has been some serious gross negligence.

The moment I saw the word 'Trustees' I smelled something... laziness at best, hands in the till at worst.

[anonymous-user]

citychap26 said:

there has been some serious gross negligence.

Don't bet on that. The trustees may have decided to act in the best interests of beneficiaries by not putting the trust fund "at risk" - in other words avoiding the stock market. There are rarely any easy answers to these questions and pursuing the answers can be massively expensive with no certainty about the outcome. The process may also deplete the trust assets yet further if the trustees spend trust funds in defending their position.

These days most of the big corporate pension funds hold a huge amount of their investments in bonds, "for safety". The trustees feel very pleased with themselves having protected everyone from stock market risk. The unfortunate downside has been they've missed out on £billions of potential investment return and Defined Benefit pension schemes became so expensive they've almost all been closed. But there are no prizes for 20:20 hindsight and that's certainly not negligence on the part of the trustees..

[Gary C]

Ayahuasca said:

If you had put your money under the mattress until 2008, then bought Bitcoin at launch, you would now have ... 18 billion dollars.

Apart from all the coins that would have been stolen in that time

[citychap26]

Okay so to give a little more information, the fund is worth £750 today and they paid an income of £400 over the years.

Okay also please don’t jump to the assumption I’ve knocked off three zeros form the numbers I’m stating.

Cheers

Sunil

[Ayahuasca]

Trustees don’t normally have a duty to maximise returns.

[Countdown]

citychap26 said:

Okay, that’s an extreme...

Say that trustees were “meant” to be looking after it and using their professional judgement.

What were the aims and objectives of the Trust? e.g. Im a Pension Fund Trustee and there's a document which sets out what we are aiming for, what our remit is, what our responsibilities are. What does your Trust document say?

[citychap26]

Hi All,

So a little update I took my dispute to the Financial Ombudsman, but they were unable to help.

I'm finding that solicitors are also a mine field, they are only interested in fees.

Any pointers? I know I'm being a little vague.

Cheers

Sunil