One of the three professors speaks out

Falling dividends make clear the folly of saving in the stock market to fund pensions

Shell’s current equity dividend yield is a bit above 3%.

Shell’s current MTB bond yield is apparently 0.25%. Or maybe that’s just Markets Insider being stupid and it is in fact around the coupon of 1.25%.

That much greater return from bonds, rather than equities, shows why people should not save in equities for their pensions. Sop dies indeed say one of the tre professori.

12 thoughts on “One of the three professors speaks out”

  1. I wonder if anyone has asked him why pension funds are “clamouring” for more gilts when, as far as I know, they all have negative redemption yields? But I like the idea of him investing in model railways. It’s just irrational enough for him to think it a good thing to do

  2. Bloke in North Dorset

    “ Guess who doesn’t have anything invested in the stock market…”

    Given that anguished cry it’s more likely he went in near the top last year and is now sitting on big paper losses, if he has any savings at all.

    And anyone who’s looking at their savings in a dip like this needs to walk away and take their medication.

  3. Green Bonds are the solution – these provide a net return on investment that is zero but are a positive benefit to society. They also had the added bonus of being designed by me.
    The state pension is to be raised to a level whereby it won’t be necessary to invest in stocks and shares or any other assets to provide with a ‘decent’ pension.

    This can all be accomplished by ‘Green Quantitative easing’, which is totally different from printing money and can be accomplished with no cost to society whatsoever as was done in 2008. Those who would object to this are almost always ‘neoliberals’ who will object because they are part of the ‘Rentier’ class exploiting people.

    Candidly, only a troll could dispute the analysis here and anyone who does so will not be published.

  4. I wonder if Ritchie has practiced what he preaches and invested his own pension in bonds. If he has, that may explain today’s appeal for donations!

  5. FFS. This needs sharing. Spud talks dividend taxation

    “But given the dividend has a deemed credit attached to it in most cases (but not all) no income tax is due”

    The deemed tax credit on dividends was removed 6th April 2016.

    The man claims to be a tax expert and doesn’t even know how dividends are taxed.

  6. @diogenes:

    “I wonder if anyone has asked him why pension funds are “clamouring” for more gilts when, as far as I know, they all have negative redemption yields?”

    Nominal gilts all have positive yields to maturity, albeit small. Of course real yields are significantly negative.

  7. Of course real yields are significantly negative.

    “Real” returns are just more neoliberal sophistry. Your time here is done.

  8. “But I like the idea of him investing in model railways. It’s just irrational enough for him to think it a good thing to do”

    The funny thing is it could be a good investment. There are things that are viewed purely as toys that if you know what you’re buying over time you can make money. A friend of mine (on the advice of his son) bought loads of Lego kits, limited editions that Lego bring out on a regular basis. He eventually sold the lot (and we’re talking 10k worth here) for double what he paid for it. One suspects that if you knew your onions in a particular field and made constant purchases over time of quality items and left them sealed and boxed you would make money in the long term.

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