This government is laughing at saver!

Lokolo

dunstonh wrote: »

I started in 94 with investing and I am running just over 10% p.a. There will be posters here that are better than that and worse.

Do you keep a record of your clients returns? If so, whats the average for you (or your firm)? More being nosey than anything

tuggy12

ChiefGrasscutter wrote: »

I think we can agree that 10 years is a reasonable long term investment term, and anyone who bought a FTSE 100 tracker fund 10 years ago is probably sitting on a capital loss at present. Whether it would indeed have been better to stick it in a high interest account depends on the comparative rates of income derived from savings vs income from shares over that period. I don’t personally know but I’d suspect that the savings account might just win out.

Good summary.

Anyone who bought a FTSE100 tracker fund 10 years ago is definitely sitting on a capital loss at present.

Ten years ago the FTSE100 was 5861, today its at 4022, that's a fall of 31% in ten years.

The CAC40, bought / sold in £, has lost 2% over the last 10 years.

The DAX, bought / sold in £, has gained 11% over the last ten years.

The DOW, bought / sold in £, has gained 2.5% over the last ten years.

Worst of all ( of the major indexes ) is the Nikkei which has lost, in £ terms, 47% over the last nine years ( don't have the ten years figures)

So, without any doubt whatsoever, cash savings have outperformed the major index trackers over the last ten years. In my estimation the average savings rate available to investors has not fallen below 4% pa during the last ten years giving a return of at least 48% over ten years.

dunstonh

Ten years ago the FTSE100 was 5861, today its at 4022, that's a fall of 31% in ten years.

What about dividends? The FTSE100 is one of the worst indicies in the western world for about the last 15 years as far as performance goes. You would have to be barmy to stick all your money in there.

In my estimation the average savings rate available to investors has not fallen below 4% pa during the last ten years giving a return of at least 48% over ten years.

10 years:
RPI 30.29%
Money Deposit 90 days: 35.66%
Fidelity Special Situations: 181.08% (not picked as best fund, as it isnt, but it was the most bought/sold fund from 10 years ago)
L&G UK 100 index: -22.09%

Do you keep a record of your clients returns? If so, whats the average for you (or your firm)? More being nosey than anything

Records are kept for individuals but there is no way to say an average as you have different timescales and risk profiles involved. I would say that the cautious portfolios have been the better ones. Some people have high losses (typically less than market as no-one goes in 100%) and some have a lot better than cash and most are in between. You cant measure returns on given periods. Some 10 year periods will be awful, some will be brilliant. Most will show equities have outperformed cash but thats the risk you take when you invest. The current 10 year period reflects badly on investments because you have two major crashes in there. In 3 years time, equities will probably look very good and significantly beat cash. Neither of those periods should be used as an argument against or in favour of investing or sticking with cash. Just as examples of what could happen.

RayWolfe

Oh dear! And I suppose that there was no dividends either? And no inflation?
Ah, never mind.

tuggy12

RayWolfe wrote: »

Oh dear! And I suppose that there was no dividends either? And no inflation?
Ah, never mind.

The post I responded to was referring to capital losses with a FTSE100 tracker and I deliberately didn't refer to inflation as the negative effect of inflation will be the same for each avenue of investment.
I was comparing both avenues of investment, not trying to apply definitive values.

To fully evaluate both avenues of investment there are surely many other items to take into account e.g. Dealing costs/ management charges / CGT / dividends / tax on dividends / tax on interest / Tessa/Isa allowances, as well as inflation.

dunstonh
10 years:
RPI 30.29%
Money Deposit 90 days: 35.66%
Fidelity Special Situations: 181.08% (not picked as best fund, as it isnt, but it was the most bought/sold fund from 10 years ago)
L&G UK 100 index: -22.09%

The RPI of course has the same negative impact on any investment.
Money Deposit 90 days: 35.66% - not sure what you mean by this.
The FSS return is very good at about 10% pa but for every FSS there are dozens of funds that have very low or negative returns over the last ten years.

tuggy12

dunstonh wrote: »

Savings have always typically paid a rate that is just under or just over inflation.

Not true.

Since this Government came to power in 1997, the target inflation measure has been the CPI and until the last few weeks the Bank Rate has always been more than just over the CPI.

Examples:

July 97 CPI 2.0% BR 6.75% Diff 4.75%
July 98 CPI 1.4% BR 7.5% Diff 6.1%
July 99 CPI 1.3% BR 5.0% Diff 3.7%
July 00 CPI 0.9% BR 6.0% Diff 5.1%
July 01 CPI 1.4% BR 5.25% Diff 3.85%
July 02 CPI 1.1% BR 4.0% Diff 2.9%
July 03 CPI 1.3% BR 3.5% Diff 2.2%
July 04 CPI 1.4% BR 4.75% Diff 3.35%
July 05 CPI 2.3% BR 4.5% Diff 2.2%
July 06 CPI 2.4% BR 4.75% Diff 2.35%
July 07 CPI 1.9% BR 5.75% Diff 3.85%
July 08 CPI 4.4% BR 5% Diff 0.6%
Jan 09 CPI 3.1% BR 1.5% Diff -1.6%

dunstonh

Try using RPI and not CPI. RPI is more realistic for most people.

bjorn_again

sons wrote: »

You most prob like the inflation that they are suffering in Zimbabwe then.

Inflation has to be kept under control for the good of the country.

Sorry, but your comment has to take poll position for idiot of the month.

metrobus

Inflation 1% ?

So british gas put their prices up last year by 35%
and now put them down 10 %(for some tariffs and gas only).

We pay approx 25 % more from 2 years ago but this
years numbers on inflation say gas is down 10 %
and the inflation rate comes down accordingly.

Its all a numbers game and how they can twist it.

If a company puts their price up 100% one year
they can then boast about lowering 10 % the year after although
they are still stiffing you for 90% more over 2 years.

Inactive

metrobus wrote: »

Inflation 1% ?

Indeed.:eek:

Gordon Brown said recently " prices are falling in supermarkets ", well I have 2 comments on that;

1) He obviously hasn't been in one in ten years.:rolleyes:

and;

2) Even if they were falling, they are still at least 30% higher than a year ago.