Absolutely glorious

As I am writing stock markets in London have opened and are 5% down on Friday’s closing prices. The tumble goes on. The awareness that markets are failing and that large parts of the economy will not survive this crisis is growing. I have already made it clear that I think that conditions must be attached to the bailouts that will inevitably follow, but this blog is about something else.

Despite the market now very obviously failing the government has not stopped the mandatory requirement that most employees in this country contribute to their pension fund this month, even though the contributions that they will be making from now and for a long time to come will probably simply be making good the funds lost over the last few weeks.

Quick question. Would you rather your pension was buying shares when they’re nice and cheap, or perhaps you think that we should all wait for them to be nice and expensive again before we buy any?

15 thoughts on “Absolutely glorious”

  1. Last week Herr Oberst Kartoffel was claiming he had the virus. He appears to have recovered. What a shame.

  2. My problem is I had done almost all of the buying already and was very close to the pension drawdown. Well, aren’t we going to get universal basic income soon anyway so who needs a pension.

  3. @Jussi

    My sympathies.

    The only upside (assuming you are UK based) is that at least you don’t have to buy an annuity.

    Assuming and hoping that you have a long and healthy retirement, you investments can continue to grow even after you retire.

  4. Question for you, Tim. Where do you think the shares pension funds would be buying would come from? Is there any evidence that there are lots of sellers in the market or are falling prices just an absence of buyers? After all, if there are lots of people selling, there must be lots of people buying. Every sale requires a purchase.

  5. Dennis, He Who Is Not Easily Amused

    Isn’t it more accurate to say the virus was suffering from him?

    Just launched coffee on the computer screen. Good one.

  6. Bloke in North Dorset

    He’s admitting he’s not heard of pound cost averaging, personal finance 101. Now there’s a surprise.

    Jussi, I’m on drawdown, I’m not looking at my portfolio for the same reason I didn’t when share prices were shooting up, it’s got to last me around 25 years, I hope, so there’ll be lots of wild swings in that time.

  7. “Isn’t it more accurate to say the virus was suffering from him?”

    Free the Ely 94,000,000,000!

  8. Wasn’t it the last but one crisis where UK rules were changed that by default funds had to start switching into less volatile assets over the last few years before retirement age

  9. Bnic, “less volatile assets” is an amusing concept. In the current market, equity and debt seem very highly correlated – when interest rates are cut, the price of debt instruments falls and the falls seem suspiciously similar to equities. Even gold has fallen, because of people selling to cover losses in open positions in other assets. Diversification is not your friend in these markets.

    I can only look at trading volumes for my portfolios but not much actual trading seems to be happening. I cannot locate a free source of trading data for LSE

  10. In fact, let’s take this further. If, as I suspect, few securities are actually being traded, why not suspend the markets for a week? At least it would stop the hysteria about alleged Hedge Funds allegedly making alleged millions

  11. Spud being a fool again

    Peeps can opt out anytime they want iirc

    @BniC

    Less volatile when approaching retirement age has been sop for decades

    @Julia

    If virus didn’t like Spud, he should be incarcerated and used for medical research

  12. The great news (and I speak as someone who knows a co-author of Murphy) is that when this is over the guy is basically reduced to stacking shelves (if he even has that capability) – the entirety of academia and the Non- productive public sector (basically all Corbyn and Green voters outside the private sector) are likely to be dismissed as ‘useless mouths’ and no longer paid taxes to spout bollocks.

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