'Annuities are poor value' - what do they know that we don't?

shinytop

But I'd still rather have a DB pension.

[Deleted User]

MK62 said:

Deleted_User said:

US stocks 1929-1932 drawdown: 84%.  And thats just 100 years of historic data.  Other markets lost more, up to 100%. Someone 50 today can easily live another 50 years. A major event over that period of time is credible.

Though to put some perspective into that.......US stocks 1921-1929: +472%

Wild times to be a stock market investor....

As ever, the stock market can be a very lucrative place to make money.....or a place to learn some very harsh lessons (or both).......it's all a matter of timing........and that's hard to forecast and get right!

If your investment first climbs 472% and then drops 84% you have about 10% less than what you started with. 

itwasntme001

Thrugelmir said:

itwasntme001 said:

MK62 said:

Deleted_User said:

US stocks 1929-1932 drawdown: 84%.  And thats just 100 years of historic data.  Other markets lost more, up to 100%. Someone 50 today can easily live another 50 years. A major event over that period of time is credible.

Though to put some perspective into that.......US stocks 1921-1929: +472%

Wild times to be a stock market investor....

As ever, the stock market can be a very lucrative place to make money.....or a place to learn some very harsh lessons (or both).......it's all a matter of timing........and that's hard to forecast and get right!

We could be in a mother of all bubbles in financial assets.  We just won't know for sure without hindsight.

Debt is now at a higher level than at the time of the GFC.  Next time maybe even more painfull. 

Much of it is unproductive as well - how much debt has been borrowed by corporates to fuel buybacks and dividends?  Returns brought forward at the expense of much riskier (due to excess leverage) equity returns of the future?

Unproductive debt because corporates have not really been investing in real projects with exceptions in the tech companies.

itwasntme001

shinytop said:

But I'd still rather have a DB pension.

I would too but I would look closely at the company offering it to see if it's liabilities can be managed for the remainder of your life.

shinytop

itwasntme001 said:

shinytop said:

But I'd still rather have a DB pension.

I would too but I would look closely at the company offering it to see if it's liabilities can be managed for the remainder of your life.

Not a lot I could do about it though.  Although you can never be sure with a plc I would back my ex-employer to last longer than me.  It's also a very large company with a relatively small DB liability.   

Terron

arnoldy said:

Google the HQs of some of the big annuity providers - lots of prestigious glass and marble palaces paid for by those who brought annuities. And then look at the CEO pay, bonus and expenses for the big insurers, & assume that there are probably hundreds, maybe thousands on 100k plus in a long tail of highly paid suits. 
All feeding on your annuity.
And then look at the dividends paid out.
Really can't understand why anyone would buy an annuity - unless its a form of UK financial services charity donation.

GAR of 10.6% was why I bought mine.

Thrugelmir

itwasntme001 said:

Thrugelmir said:

itwasntme001 said:

MK62 said:

Deleted_User said:

US stocks 1929-1932 drawdown: 84%.  And thats just 100 years of historic data.  Other markets lost more, up to 100%. Someone 50 today can easily live another 50 years. A major event over that period of time is credible.

Though to put some perspective into that.......US stocks 1921-1929: +472%

Wild times to be a stock market investor....

As ever, the stock market can be a very lucrative place to make money.....or a place to learn some very harsh lessons (or both).......it's all a matter of timing........and that's hard to forecast and get right!

We could be in a mother of all bubbles in financial assets.  We just won't know for sure without hindsight.

Debt is now at a higher level than at the time of the GFC.  Next time maybe even more painfull. 

Unproductive debt because corporates have not really been investing in real projects with exceptions in the tech companies.

Dot Com boom is a timely reminder that many start ups crash and burn. Not all good ideas make commercially viable businessess. 

MK62

Deleted_User said:

MK62 said:

Deleted_User said:

US stocks 1929-1932 drawdown: 84%.  And thats just 100 years of historic data.  Other markets lost more, up to 100%. Someone 50 today can easily live another 50 years. A major event over that period of time is credible.

Though to put some perspective into that.......US stocks 1921-1929: +472%

Wild times to be a stock market investor....

As ever, the stock market can be a very lucrative place to make money.....or a place to learn some very harsh lessons (or both).......it's all a matter of timing........and that's hard to forecast and get right!

If your investment first climbs 472% and then drops 84% you have about 10% less than what you started with. 

True, but to simply look at the crash itself in isolation, without looking at other data that both preceded and followed it might lead to missing some of the lessons that hindsight taught about that period......and losing 10% is quite different to losing 84%.......

(...plus, there are other factors too.......eg, between 1929 and 1932, US inflation ran at about -25%)....

If the US stock market put on 472% between now and 2029.......and you knew that this was largely fuelled by speculators borrowing large sums to buy into a spiralling stock market.......would you then put your life savings into that stock market in 2029?

However, we are getting way off topic here.......

[Deleted User]

MK62 said:

Deleted_User said:

MK62 said:

Deleted_User said:

US stocks 1929-1932 drawdown: 84%.  And thats just 100 years of historic data.  Other markets lost more, up to 100%. Someone 50 today can easily live another 50 years. A major event over that period of time is credible.

Though to put some perspective into that.......US stocks 1921-1929: +472%

Wild times to be a stock market investor....

As ever, the stock market can be a very lucrative place to make money.....or a place to learn some very harsh lessons (or both).......it's all a matter of timing........and that's hard to forecast and get right!

If your investment first climbs 472% and then drops 84% you have about 10% less than what you started with. 

True, but to simply look at the crash itself in isolation, without looking at other data that both preceded and followed it might lead to missing some of the lessons that hindsight taught about that period......and losing 10% is quite different to losing 84%.......

(...plus, there are other factors too.......eg, between 1929 and 1932, US inflation ran at about -25%)....

If the US stock market put on 472% between now and 2029.......and you knew that this was largely fuelled by speculators borrowing large sums to buy into a spiralling stock market.......would you then put your life savings into that stock market in 2029?

However, we are getting way off topic here.......

If I was in 1920, within 10 years of retirement  and knew  where the stock-market would be in 25 years’ time, I would not have invested anything into shares.  And almost everyone who did lost so much money that they gave up on the stock market before it recovered.  Not a good recipe for a healthy and happy retirement.

westv

I wonder what annuity rates were in the 1920s and 30s?