I am just shy of my 3rd decade on this earth, and I am just curious to hear the opinions of those in this thread who might have a longer memory - Is this the worst economic impact by a government in post-war history?
The 2007/8 financial crash was largely down to the world economy crashing than Blair+Brown cocking it up from what I understand and I'm not sure if Major is generally accepted to be at fault for Black Wednesday in 1992? Or were Thatcher, Wilson and Heath's situations more dire than the current?
I might be being dramatic as it all seems pretty damn dire right now, but just curious on others views on the question.
Might be more of a question for the House of Commoners...
Worse reaction to a Budget I've ever seen, and I'm in my mid 50's. The only other one to have an effect of sorts (but not immediately) was Nigel Lawson in 1988. A big tax giveaway but with the scrapping of MIRAS (akin to tax relief on your mortgage payments) which led to the late 80's housing boom as people were desperate to secure a mortgage before the benefit was axed (again, akin to the suspension of Stamp Duty during the pandemic).
It seems the markets get scared BEFORE a Labour Budget but then get spooked AFTER a Tory one.
BoE to buy bonds. FTSE100 running back turbo on the news. £ getting ready to take another nose dive
Umm...still below 7,000...
not for much longer
Well, I've had lunch and the graph is pointing back downwards again...
But you got the sterling prediction right at least. Below 1.06 again. Thankfully I managed to move some cash earlier in the week to the safe haven known as the Czech koruna. What a time to be alive
Had it confirmed this morning that I've finally Exchanged on my house sale, with completion set for next week.
This was the property I bought after my divorce but had to rent it out 3 years ago when the kids came to live with me after falling out with their mum. A 2 up/2 down terrace house wasn't big enough for me & 3 teenagers full time.
We should have exchanged last Friday but was delayed for some reason (Solicitors mainly) but I've been fearful the FTB'ers were going to pull out due to the ridiculous figures being bandied about on the news since the weekend. But it seems (and confirmed by the Estate Agent) that any buyers already in a chain are now feverously trying to complete asap as they have mortgage offers from the summer & wouldn't get anything like the interest rate they secured a few months ago.
Now for me I might have actually got lucky for once as we are currently in rented & not looking to buy anything for at least another year, when the youngest will either stay on at school or go to College and the middle one goes to Uni - which will determine where I buy & how many bedrooms I'll need. I never want to bring bad on people but a property "correction" that means I can buy something in 12-24 months time a bit cheaper than now would be very nice, especially as I've been through 2 periods of negative equity in my time and might at least have the market work in my favour for once.
BoE to buy bonds. FTSE100 running back turbo on the news. £ getting ready to take another nose dive
Umm...still below 7,000...
not for much longer
Well, I've had lunch and the graph is pointing back downwards again...
But you got the sterling prediction right at least. Below 1.06 again. Thankfully I managed to move some cash earlier in the week to the safe haven known as the Czech koruna. What a time to be alive
The BoE has put a floor under GILTs, which has propped up anything riskier. I think we should see a bounce now through to next week's FOMC meeting. This bear market still has a long tome to run though.
BoE to buy bonds. FTSE100 running back turbo on the news. £ getting ready to take another nose dive
Umm...still below 7,000...
not for much longer
Well, I've had lunch and the graph is pointing back downwards again...
But you got the sterling prediction right at least. Below 1.06 again. Thankfully I managed to move some cash earlier in the week to the safe haven known as the Czech koruna. What a time to be alive
About to poke it's head above 7000...
floating around the 6990-7000 level.
now above 7000.
7005. A full 0.03% up on the day. Uncork the Krug!
But don't jump up and down on that "floor". It still has two more days of KamiKwasi to endure before the weekend
BoE to buy bonds. FTSE100 running back turbo on the news. £ getting ready to take another nose dive
Umm...still below 7,000...
not for much longer
Well, I've had lunch and the graph is pointing back downwards again...
But you got the sterling prediction right at least. Below 1.06 again. Thankfully I managed to move some cash earlier in the week to the safe haven known as the Czech koruna. What a time to be alive
About to poke it's head above 7000...
floating around the 6990-7000 level.
now above 7000.
7005. A full 0.03% up on the day. Uncork the Krug!
I'm not really up on parliamentary procedure but I believe a full budget needs parliamentary approval. Does this last debacle also need to be approved? Of course, Parliament is recess at the moment so what happens? It would be interesting to know how the Sunak supporting Conservatives would vote.
BoE to buy bonds. FTSE100 running back turbo on the news. £ getting ready to take another nose dive
Umm...still below 7,000...
not for much longer
Well, I've had lunch and the graph is pointing back downwards again...
But you got the sterling prediction right at least. Below 1.06 again. Thankfully I managed to move some cash earlier in the week to the safe haven known as the Czech koruna. What a time to be alive
About to poke it's head above 7000...
floating around the 6990-7000 level.
now above 7000.
7005. A full 0.03% up on the day. Uncork the Krug!
But don't jump up and down on that "floor". It still has two more days of KamiKwasi to endure before the weekend
And a 2% swing in price over the day. Momentum is back with the bulls for the next few days.
BoE to buy bonds. FTSE100 running back turbo on the news. £ getting ready to take another nose dive
Umm...still below 7,000...
not for much longer
Well, I've had lunch and the graph is pointing back downwards again...
But you got the sterling prediction right at least. Below 1.06 again. Thankfully I managed to move some cash earlier in the week to the safe haven known as the Czech koruna. What a time to be alive
About to poke it's head above 7000...
floating around the 6990-7000 level.
now above 7000.
7005. A full 0.03% up on the day. Uncork the Krug!
But don't jump up and down on that "floor". It still has two more days of KamiKwasi to endure before the weekend
And a 2% swing in price over the day. Momentum is back with the bulls for the next few days.
Most of my investments are in funds (within an Isa) so I'm just seeing mini yo-yo's really over the past year. Daily and weekly pricing do not really mean that much to me as it indices panic.
Had it confirmed this morning that I've finally Exchanged on my house sale, with completion set for next week.
This was the property I bought after my divorce but had to rent it out 3 years ago when the kids came to live with me after falling out with their mum. A 2 up/2 down terrace house wasn't big enough for me & 3 teenagers full time.
We should have exchanged last Friday but was delayed for some reason (Solicitors mainly) but I've been fearful the FTB'ers were going to pull out due to the ridiculous figures being bandied about on the news since the weekend. But it seems (and confirmed by the Estate Agent) that any buyers already in a chain are now feverously trying to complete asap as they have mortgage offers from the summer & wouldn't get anything like the interest rate they secured a few months ago.
Now for me I might have actually got lucky for once as we are currently in rented & not looking to buy anything for at least another year, when the youngest will either stay on at school or go to College and the middle one goes to Uni - which will determine where I buy & how many bedrooms I'll need. I never want to bring bad on people but a property "correction" that means I can buy something in 12-24 months time a bit cheaper than now would be very nice, especially as I've been through 2 periods of negative equity in my time and might at least have the market work in my favour for once.
Whereas I hope that the worst it does is stagnate for a while. When we move we need to downsize and raise funds to see us through old age especially with the hit my pension funds have taken the last week or two.
BoE to buy bonds. FTSE100 running back turbo on the news. £ getting ready to take another nose dive
Umm...still below 7,000...
not for much longer
Well, I've had lunch and the graph is pointing back downwards again...
But you got the sterling prediction right at least. Below 1.06 again. Thankfully I managed to move some cash earlier in the week to the safe haven known as the Czech koruna. What a time to be alive
About to poke it's head above 7000...
floating around the 6990-7000 level.
now above 7000.
7005. A full 0.03% up on the day. Uncork the Krug!
But don't jump up and down on that "floor". It still has two more days of KamiKwasi to endure before the weekend
And a 2% swing in price over the day. Momentum is back with the bulls for the next few days.
Most of my investments are in funds (within an Isa) so I'm just seeing mini yo-yo's really over the past year. Daily and weekly pricing do not really mean that much to me as it indices panic.
BoE to buy bonds. FTSE100 running back turbo on the news. £ getting ready to take another nose dive
Umm...still below 7,000...
not for much longer
Well, I've had lunch and the graph is pointing back downwards again...
But you got the sterling prediction right at least. Below 1.06 again. Thankfully I managed to move some cash earlier in the week to the safe haven known as the Czech koruna. What a time to be alive
About to poke it's head above 7000...
floating around the 6990-7000 level.
now above 7000.
7005. A full 0.03% up on the day. Uncork the Krug!
But don't jump up and down on that "floor". It still has two more days of KamiKwasi to endure before the weekend
And a 2% swing in price over the day. Momentum is back with the bulls for the next few days.
That‘s not the mood music being played by the likes of Jim O‘Neill on the radio just now. He‘s going to be happy if we dont all fall off another cliff tomorrow. That index needs to crawl back up to beyond 7,300 to restore pre— Kamikwazi speech levels. FTSE250, which far better represents actual UK business, has to recover over 8%.
Had it confirmed this morning that I've finally Exchanged on my house sale, with completion set for next week.
This was the property I bought after my divorce but had to rent it out 3 years ago when the kids came to live with me after falling out with their mum. A 2 up/2 down terrace house wasn't big enough for me & 3 teenagers full time.
We should have exchanged last Friday but was delayed for some reason (Solicitors mainly) but I've been fearful the FTB'ers were going to pull out due to the ridiculous figures being bandied about on the news since the weekend. But it seems (and confirmed by the Estate Agent) that any buyers already in a chain are now feverously trying to complete asap as they have mortgage offers from the summer & wouldn't get anything like the interest rate they secured a few months ago.
Now for me I might have actually got lucky for once as we are currently in rented & not looking to buy anything for at least another year, when the youngest will either stay on at school or go to College and the middle one goes to Uni - which will determine where I buy & how many bedrooms I'll need. I never want to bring bad on people but a property "correction" that means I can buy something in 12-24 months time a bit cheaper than now would be very nice, especially as I've been through 2 periods of negative equity in my time and might at least have the market work in my favour for once.
Whereas I hope that the worst it does is stagnate for a while. When we move we need to downsize and raise funds to see us through old age especially with the hit my pension funds have taken the last week or two.
I thought you'd stay where you are - handy for when your parents decide to sell up & move in 😆
BoE to buy bonds. FTSE100 running back turbo on the news. £ getting ready to take another nose dive
Umm...still below 7,000...
not for much longer
Well, I've had lunch and the graph is pointing back downwards again...
But you got the sterling prediction right at least. Below 1.06 again. Thankfully I managed to move some cash earlier in the week to the safe haven known as the Czech koruna. What a time to be alive
About to poke it's head above 7000...
floating around the 6990-7000 level.
now above 7000.
7005. A full 0.03% up on the day. Uncork the Krug!
But don't jump up and down on that "floor". It still has two more days of KamiKwasi to endure before the weekend
And a 2% swing in price over the day. Momentum is back with the bulls for the next few days.
That‘s not the mood music being played by the likes of Jim O‘Neill on the radio just now. He‘s going to be happy if we dont all fall off another cliff tomorrow. That index needs to crawl back up to beyond 7,300 to restore pre— Kamikwazi speech levels. FTSE250, which far better represents actual UK business, has to recover over 8%.
oh, dont get me wrong, it'll limp to 7250 and then go into free-fall. But if you fancied a flutter.
BoE to buy bonds. FTSE100 running back turbo on the news. £ getting ready to take another nose dive
Umm...still below 7,000...
not for much longer
Well, I've had lunch and the graph is pointing back downwards again...
But you got the sterling prediction right at least. Below 1.06 again. Thankfully I managed to move some cash earlier in the week to the safe haven known as the Czech koruna. What a time to be alive
About to poke it's head above 7000...
floating around the 6990-7000 level.
now above 7000.
7005. A full 0.03% up on the day. Uncork the Krug!
Sorry - the Krug was 'corked'.
I've got some Pomagne somewhere - any good?
Now that takes me back. In the early days of Plumstead Make Merry that was a popular bottle to win on the various stalls 🙂
Had it confirmed this morning that I've finally Exchanged on my house sale, with completion set for next week.
This was the property I bought after my divorce but had to rent it out 3 years ago when the kids came to live with me after falling out with their mum. A 2 up/2 down terrace house wasn't big enough for me & 3 teenagers full time.
We should have exchanged last Friday but was delayed for some reason (Solicitors mainly) but I've been fearful the FTB'ers were going to pull out due to the ridiculous figures being bandied about on the news since the weekend. But it seems (and confirmed by the Estate Agent) that any buyers already in a chain are now feverously trying to complete asap as they have mortgage offers from the summer & wouldn't get anything like the interest rate they secured a few months ago.
Now for me I might have actually got lucky for once as we are currently in rented & not looking to buy anything for at least another year, when the youngest will either stay on at school or go to College and the middle one goes to Uni - which will determine where I buy & how many bedrooms I'll need. I never want to bring bad on people but a property "correction" that means I can buy something in 12-24 months time a bit cheaper than now would be very nice, especially as I've been through 2 periods of negative equity in my time and might at least have the market work in my favour for once.
Whereas I hope that the worst it does is stagnate for a while. When we move we need to downsize and raise funds to see us through old age especially with the hit my pension funds have taken the last week or two.
I thought you'd stay where you are - handy for when your parents decide to sell up & move in 😆
that's actually a discussion we need to have, soon, but seeing as you are buying a four bed house next year it might not be necessary
I am just shy of my 3rd decade on this earth, and I am just curious to hear the opinions of those in this thread who might have a longer memory - Is this the worst economic impact by a government in post-war history?
The 2007/8 financial crash was largely down to the world economy crashing than Blair+Brown cocking it up from what I understand and I'm not sure if Major is generally accepted to be at fault for Black Wednesday in 1992? Or were Thatcher, Wilson and Heath's situations more dire than the current?
I might be being dramatic as it all seems pretty damn dire right now, but just curious on others views on the question.
Might be more of a question for the House of Commoners...
This is not a crash like previous events, it’s an overdue correction. The can was kicked down the road in 2008, kept being kicked and nobody stopped the imbalance in numbers caused by China until Covid came along and rewrote the book. Putin’s dumb invasion of Ukraine was the straw that broke the camels back. The UK has the advantage of being ahead of the curve thanks to Boris being kicked out of office and the Queen’s death (all that drug money being held in notes needs to be cashed in) but it’s probably not in such a comparatively bad position as the rest of the world heading into the northern hemisphere winter season. Have Truss and Kwantang fucked it up by taking the brake off ahead of everybody else ? That’s a question for historians to look back on.
Don't know if anyone has picked up that on the one hand we are told pension funds are collapsing and need to be protected by B of E intervention on interest rates and the value of the pound, and on the other hand final salary pension schemes have massively improved their funding position and now likely to have surplus funds. Companies with legacy final salary schemes are jumping for joy at the fall in the value of bonds and gilts. The overall value of these pension funds can fall yet they can be holding more investments than needed to pay their pensioners.
There's no difference between the cost of a pension guaranteed by a final salary scheme and the cost of a pension funded from an individual's personal pension pot, so why a crisis for some pensions and not for others.
The difference is that individuals, without any conscious decision, choose to fund pension income from capital growth, which tends to be volatile and unpredictable. On the other hand, companies funding final salary guarantees are forced by regulation to buy advance income in the form of bonds and gilts. If interest rates are low, as they have been for decades, the cost of buying £1 of income is high because the price of gilts is high and vice versa. If interest rates are rising (their yield increases) as now, the price of gilts falls and the effect is that £1 buys more guaranteed income i.e a 1% yield is expensive and a 5% yield is cheap.
Individuals intuitively choose to take more risk by relying more on capital growth prior to retirement BUT as soon as they retire and need to draw down income they should be thinking more like a company that has a liability to fund a secure income stream. The obsession with fund values falling and rising is irrelevant once you have a basket of bonds and gilts providing a pre-set income yield regardless of what its capital value is. If you need income, what's more valuable - £100K yielding 5% or £200k yielding 1%? In the growth phase before retirement you are targeting as large a cash pot at retirement as possible that you can convert to income at retirement. Short term fund value volatility far from retirement is just noise, but as you approach retirement you should not be so concerned with fund value if your pension pot, like a final salary scheme, has at least in part bought future income in the form of bonds and gilts. If you are close to, or in retirement, and still invested wholly in equities you are choosing to rely on capital growth and you are bearing the full risk of market volatility affecting capital values. "Lifestyle" investing is the norm for many pension products and this product automatically does the de-risking into bonds and gilts as you approach retirement without you having to take any action.
The fall in the value of the pound means pension funds invested in non-UK investments are filling their boots with increased value as Dollars earned overseas are converted into ever more pounds. Most fund managers offer two varieties of overseas fund investments - those which bear the currency exchange risk and those which hedge the Sterling currency exchange risk. The latter will perform below un-hedged funds all the time sterling is weak. In fact currency exchange gains in un-hedged funds account for a significant percentage of the buoyant performance of overseas equity investment.
Inflation is the risk that pension investors approaching should be most concerned with.
Investors suffering the most as a result of high interest rates, falling UK markets and falling pound are those which are poorly managed or are obsessed with prevailing fund value.
Don't know if anyone has picked up that on the one hand we are told pension funds are collapsing and need to be protected by B of E intervention on interest rates and the value of the pound, and on the other hand final salary pension schemes have massively improved their funding position and now likely to have surplus funds. Companies with legacy final salary schemes are jumping for joy at the fall in the value of bonds and gilts. The overall value of these pension funds can fall yet they can be holding more investments than needed to pay their pensioners.
There's no difference between the cost of a pension guaranteed by a final salary scheme and the cost of a pension funded from an individual's personal pension pot, so why a crisis for some pensions and not for others.
The difference is that individuals, without any conscious decision, choose to fund pension income from capital growth, which tends to be volatile and unpredictable. On the other hand, companies funding final salary guarantees are forced by regulation to buy advance income in the form of bonds and gilts. If interest rates are low, as they have been for decades, the cost of buying £1 of income is high because the price of gilts is high and vice versa. If interest rates are rising (their yield increases) as now, the price of gilts falls and the effect is that £1 buys more guaranteed income i.e a 1% yield is expensive and a 5% yield is cheap.
Individuals intuitively choose to take more risk by relying more on capital growth prior to retirement BUT as soon as they retire and need to draw down income they should be thinking more like a company that has a liability to fund a secure income stream. The obsession with fund values falling and rising is irrelevant once you have a basket of bonds and gilts providing a pre-set income yield regardless of what its capital value is. If you need income, what's more valuable - £100K yielding 5% or £200k yielding 1%? In the growth phase before retirement you are targeting as large a cash pot at retirement as possible that you can convert to income at retirement. Short term fund value volatility far from retirement is just noise, but as you approach retirement you should not be so concerned with fund value if your pension pot, like a final salary scheme, has at least in part bought future income in the form of bonds and gilts. If you are close to, or in retirement, and still invested wholly in equities you are choosing to rely on capital growth and you are bearing the full risk of market volatility affecting capital values. "Lifestyle" investing is the norm for many pension products and this product automatically does the de-risking into bonds and gilts as you approach retirement without you having to take any action.
The fall in the value of the pound means pension funds invested in non-UK investments are filling their boots with increased value as Dollars earned overseas are converted into ever more pounds. Most fund managers offer two varieties of overseas fund investments - those which bear the currency exchange risk and those which hedge the Sterling currency exchange risk. The latter will perform below un-hedged funds all the time sterling is weak. In fact currency exchange gains in un-hedged funds account for a significant percentage of the buoyant performance of overseas equity investment.
Inflation is the risk that pension investors approaching should be most concerned with.
Investors suffering the most as a result of high interest rates, falling UK markets and falling pound are those which are poorly managed or are obsessed with prevailing fund value.
Spot on. Reports that 'pension funds' were close to meltdown due to cash calls can't be right for the reasons you state - why would pension funds be leveraged? Intervention due to general financial instability ... maybe.
Liability Driven Investment rules dictate that they match their liabilities, largely government or very high investment grade bonds which they would intend to hold to maturity and therefore would know their gross redemption yield at the start. I suppose it is possible that some were panicking due to inflation and trying to hedge that with derivatives? That would be another scandal brewing, if true.
It' a happy coincidence that the Bank's intervention will keep borrowing costs down for the Government, of course. Anyone still think that any of the central banks are actually independent? Lol.
BoE to buy bonds. FTSE100 running back turbo on the news. £ getting ready to take another nose dive
Umm...still below 7,000...
not for much longer
Well, I've had lunch and the graph is pointing back downwards again...
But you got the sterling prediction right at least. Below 1.06 again. Thankfully I managed to move some cash earlier in the week to the safe haven known as the Czech koruna. What a time to be alive
About to poke it's head above 7000...
floating around the 6990-7000 level.
now above 7000.
7005. A full 0.03% up on the day. Uncork the Krug!
But don't jump up and down on that "floor". It still has two more days of KamiKwasi to endure before the weekend
And a 2% swing in price over the day. Momentum is back with the bulls for the next few days.
That‘s not the mood music being played by the likes of Jim O‘Neill on the radio just now. He‘s going to be happy if we dont all fall off another cliff tomorrow. That index needs to crawl back up to beyond 7,300 to restore pre— Kamikwazi speech levels. FTSE250, which far better represents actual UK business, has to recover over 8%.
oh, dont get me wrong, it'll limp to 7250 and then go into free-fall. But if you fancied a flutter.
I'm in no mood for a flutter (well I'm approx twice your age, I believe, so I wouldn't be), and today's opening market moves haven't exactly dispelled that mood.
Pound has opened steadier though, so looks like so far the BoE bail out of KamiKwazi is holding.
The question is, for old gits with cash, (but in my case without either of the pension types that @Dippenhall mentions above in his usual insightful way) is it time to dip into the market in search of funds or even equity stocks that produce reliable income flows? One problem is that if you look for such income in global rather than UK markets, but are of necessity buying with pounds, the price is more expensive than it was, and you have to consider not just what the fund/stock may do, but what the pound will do. Has the BoE created a floor now? Many seem to doubt it, (I think it was JP Morgan forecasting £1 - $0.95) but I am not sure if that's real or just for dramatic effect.
Any further thoughts for disorientated mug punters especially from @Dippenhall and @WishIdStayedinthePub would be much appreciated!
BoE to buy bonds. FTSE100 running back turbo on the news. £ getting ready to take another nose dive
Umm...still below 7,000...
not for much longer
Well, I've had lunch and the graph is pointing back downwards again...
But you got the sterling prediction right at least. Below 1.06 again. Thankfully I managed to move some cash earlier in the week to the safe haven known as the Czech koruna. What a time to be alive
About to poke it's head above 7000...
floating around the 6990-7000 level.
now above 7000.
7005. A full 0.03% up on the day. Uncork the Krug!
But don't jump up and down on that "floor". It still has two more days of KamiKwasi to endure before the weekend
And a 2% swing in price over the day. Momentum is back with the bulls for the next few days.
That‘s not the mood music being played by the likes of Jim O‘Neill on the radio just now. He‘s going to be happy if we dont all fall off another cliff tomorrow. That index needs to crawl back up to beyond 7,300 to restore pre— Kamikwazi speech levels. FTSE250, which far better represents actual UK business, has to recover over 8%.
oh, dont get me wrong, it'll limp to 7250 and then go into free-fall. But if you fancied a flutter.
I'm in no mood for a flutter (well I'm approx twice your age, I believe, so I wouldn't be), and today's opening market moves haven't exactly dispelled that mood.
Pound has opened steadier though, so looks like so far the BoE bail out of KamiKwazi is holding.
The question is, for old gits with cash, (but in my case without either of the pension types that @Dippenhall mentions above in his usual insightful way) is it time to dip into the market in search of funds or even equity stocks that produce reliable income flows? One problem is that if you look for such income in global rather than UK markets, but are of necessity buying with pounds, the price is more expensive than it was, and you have to consider not just what the fund/stock may do, but what the pound will do. Has the BoE created a floor now? Many seem to doubt it, (I think it was JP Morgan forecasting £1 - $0.95) but I am not sure if that's real or just for dramatic effect.
Any further thoughts for disorientated mug punters especially from @Dippenhall and @WishIdStayedinthePub would be much appreciated!
DLG shares are good value right now, historically paid a good dividend.
I'm going to bite the bullet and look at my modest portfolio (even more modest than the last time I looked, I'm sure) a bit later and see how things have moved since I went on holiday a couple of weeks ago. Timed that fairly well - got my euros before last Friday's shit show, at least.
I'm hoping that the investments with $ or € earnings (BP, Total Energies, Unilever) will have held up a bit better than £ based companies, although everything has slipped, of course. Going to be a balance between looking for decent interest rates on cash deposits, and value shares with solid earning/dividend potential, but for the moment with an emphasis on the former.
BoE to buy bonds. FTSE100 running back turbo on the news. £ getting ready to take another nose dive
Umm...still below 7,000...
not for much longer
Well, I've had lunch and the graph is pointing back downwards again...
But you got the sterling prediction right at least. Below 1.06 again. Thankfully I managed to move some cash earlier in the week to the safe haven known as the Czech koruna. What a time to be alive
About to poke it's head above 7000...
floating around the 6990-7000 level.
now above 7000.
7005. A full 0.03% up on the day. Uncork the Krug!
But don't jump up and down on that "floor". It still has two more days of KamiKwasi to endure before the weekend
And a 2% swing in price over the day. Momentum is back with the bulls for the next few days.
That‘s not the mood music being played by the likes of Jim O‘Neill on the radio just now. He‘s going to be happy if we dont all fall off another cliff tomorrow. That index needs to crawl back up to beyond 7,300 to restore pre— Kamikwazi speech levels. FTSE250, which far better represents actual UK business, has to recover over 8%.
oh, dont get me wrong, it'll limp to 7250 and then go into free-fall. But if you fancied a flutter.
I'm in no mood for a flutter (well I'm approx twice your age, I believe, so I wouldn't be), and today's opening market moves haven't exactly dispelled that mood.
Pound has opened steadier though, so looks like so far the BoE bail out of KamiKwazi is holding.
The question is, for old gits with cash, (but in my case without either of the pension types that @Dippenhall mentions above in his usual insightful way) is it time to dip into the market in search of funds or even equity stocks that produce reliable income flows? One problem is that if you look for such income in global rather than UK markets, but are of necessity buying with pounds, the price is more expensive than it was, and you have to consider not just what the fund/stock may do, but what the pound will do. Has the BoE created a floor now? Many seem to doubt it, (I think it was JP Morgan forecasting £1 - $0.95) but I am not sure if that's real or just for dramatic effect.
Any further thoughts for disorientated mug punters especially from @Dippenhall and @WishIdStayedinthePub would be much appreciated!
Hi @Prague. All I can tell you what I've been buying with the money we cashed in on my wife's pension a couple of month's back. An index linked pension gave us 45x, which I reckon would be a much lower offer today, given where rates are going and for the reasons @Dippenhall explained well.
To try to square the income versus inflation circle, I've gone for certain property and infrastructure investment trusts that have served me well over the years.
e.g. HICL - at a rare discount at the moment - owns things like a share in the M6 toll road; TRY - is yielding 5.5% and has a good track record over the long term and SHED and BBOX - own the big warehouses used by the likes of Amazon.
All of these I sold down in recent months as valuations were getting stretched. I cleared out completely after the Jackson Hole direction on the FED rate and hedged my whole portfolio.
Interestingly, some FED members are now talking the final rate down a little. So, I decide to buy enough to get Mrs W her income at a rough dividend of 5-5.5%, and it still leaves 60% 'in the bank' as a safety net.
Many of the above are susceptible to more falls - they are not at the lows of the pandemic, for example. I would feed in gradually over the next 6 months. On a 3-5 years view, I reckon they will give a steady income.
money money is a Cunt. No one needs shiny things. Governments are evil. People are basically good if you leave them alone. Nothing matters. We all die.
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It seems the markets get scared BEFORE a Labour Budget but then get spooked AFTER a Tory one.
This was the property I bought after my divorce but had to rent it out 3 years ago when the kids came to live with me after falling out with their mum. A 2 up/2 down terrace house wasn't big enough for me & 3 teenagers full time.
We should have exchanged last Friday but was delayed for some reason (Solicitors mainly) but I've been fearful the FTB'ers were going to pull out due to the ridiculous figures being bandied about on the news since the weekend. But it seems (and confirmed by the Estate Agent) that any buyers already in a chain are now feverously trying to complete asap as they have mortgage offers from the summer & wouldn't get anything like the interest rate they secured a few months ago.
Now for me I might have actually got lucky for once as we are currently in rented & not looking to buy anything for at least another year, when the youngest will either stay on at school or go to College and the middle one goes to Uni - which will determine where I buy & how many bedrooms I'll need. I never want to bring bad on people but a property "correction" that means I can buy something in 12-24 months time a bit cheaper than now would be very nice, especially as I've been through 2 periods of negative equity in my time and might at least have the market work in my favour for once.
But don't jump up and down on that "floor". It still has two more days of KamiKwasi to endure before the weekend
I've got some Pomagne somewhere - any good?
What do you invest in @kentaddick?
Don't know if anyone has picked up that on the one hand we are told pension funds are collapsing and need to be protected by B of E intervention on interest rates and the value of the pound, and on the other hand final salary pension schemes have massively improved their funding position and now likely to have surplus funds. Companies with legacy final salary schemes are jumping for joy at the fall in the value of bonds and gilts. The overall value of these pension funds can fall yet they can be holding more investments than needed to pay their pensioners.
There's no difference between the cost of a pension guaranteed by a final salary scheme and the cost of a pension funded from an individual's personal pension pot, so why a crisis for some pensions and not for others.
The difference is that individuals, without any conscious decision, choose to fund pension income from capital growth, which tends to be volatile and unpredictable. On the other hand, companies funding final salary guarantees are forced by regulation to buy advance income in the form of bonds and gilts. If interest rates are low, as they have been for decades, the cost of buying £1 of income is high because the price of gilts is high and vice versa. If interest rates are rising (their yield increases) as now, the price of gilts falls and the effect is that £1 buys more guaranteed income i.e a 1% yield is expensive and a 5% yield is cheap.
Individuals intuitively choose to take more risk by relying more on capital growth prior to retirement BUT as soon as they retire and need to draw down income they should be thinking more like a company that has a liability to fund a secure income stream. The obsession with fund values falling and rising is irrelevant once you have a basket of bonds and gilts providing a pre-set income yield regardless of what its capital value is. If you need income, what's more valuable - £100K yielding 5% or £200k yielding 1%? In the growth phase before retirement you are targeting as large a cash pot at retirement as possible that you can convert to income at retirement. Short term fund value volatility far from retirement is just noise, but as you approach retirement you should not be so concerned with fund value if your pension pot, like a final salary scheme, has at least in part bought future income in the form of bonds and gilts. If you are close to, or in retirement, and still invested wholly in equities you are choosing to rely on capital growth and you are bearing the full risk of market volatility affecting capital values. "Lifestyle" investing is the norm for many pension products and this product automatically does the de-risking into bonds and gilts as you approach retirement without you having to take any action.
The fall in the value of the pound means pension funds invested in non-UK investments are filling their boots with increased value as Dollars earned overseas are converted into ever more pounds. Most fund managers offer two varieties of overseas fund investments - those which bear the currency exchange risk and those which hedge the Sterling currency exchange risk. The latter will perform below un-hedged funds all the time sterling is weak. In fact currency exchange gains in un-hedged funds account for a significant percentage of the buoyant performance of overseas equity investment.
Inflation is the risk that pension investors approaching should be most concerned with.
Investors suffering the most as a result of high interest rates, falling UK markets and falling pound are those which are poorly managed or are obsessed with prevailing fund value.
Liability Driven Investment rules dictate that they match their liabilities, largely government or very high investment grade bonds which they would intend to hold to maturity and therefore would know their gross redemption yield at the start. I suppose it is possible that some were panicking due to inflation and trying to hedge that with derivatives? That would be another scandal brewing, if true.
It' a happy coincidence that the Bank's intervention will keep borrowing costs down for the Government, of course. Anyone still think that any of the central banks are actually independent? Lol.
Pound has opened steadier though, so looks like so far the BoE bail out of KamiKwazi is holding.
The question is, for old gits with cash, (but in my case without either of the pension types that @Dippenhall mentions above in his usual insightful way) is it time to dip into the market in search of funds or even equity stocks that produce reliable income flows? One problem is that if you look for such income in global rather than UK markets, but are of necessity buying with pounds, the price is more expensive than it was, and you have to consider not just what the fund/stock may do, but what the pound will do. Has the BoE created a floor now? Many seem to doubt it, (I think it was JP Morgan forecasting £1 - $0.95) but I am not sure if that's real or just for dramatic effect.
Any further thoughts for disorientated mug punters especially from @Dippenhall and @WishIdStayedinthePub would be much appreciated!
Going to be a balance between looking for decent interest rates on cash deposits, and value shares with solid earning/dividend potential, but for the moment with an emphasis on the former.
To try to square the income versus inflation circle, I've gone for certain property and infrastructure investment trusts that have served me well over the years.
e.g. HICL - at a rare discount at the moment - owns things like a share in the M6 toll road;
TRY - is yielding 5.5% and has a good track record over the long term and
SHED and BBOX - own the big warehouses used by the likes of Amazon.
All of these I sold down in recent months as valuations were getting stretched. I cleared out completely after the Jackson Hole direction on the FED rate and hedged my whole portfolio.
Interestingly, some FED members are now talking the final rate down a little. So, I decide to buy enough to get Mrs W her income at a rough dividend of 5-5.5%, and it still leaves 60% 'in the bank' as a safety net.
Many of the above are susceptible to more falls - they are not at the lows of the pandemic, for example. I would feed in gradually over the next 6 months. On a 3-5 years view, I reckon they will give a steady income.