Investors told forget savings accounts, think of shares

Discussion in 'Economics' started by bearice, Dec 16, 2010.

  1. Britain's 38 million savers have been urged to invest their money in the stock market after being warned that for many of them it is now a "waste of time" putting their cash into a savings account.

    The warning came after official figures indicated that the cost of living had increased once again in November, making it nearly impossible to earn a real rate of return on any bank or building society savings product.

    As the London stock market closed at a two-and-a-half-year high, experts said that for many savers taking the risk of abandoning a deposit account and placing it in a high-yielding collection of shares was a more sensible option.

    The dearth of decent savings products was laid bare by figures from the personal finance website Moneyfacts which showed that there were just three accounts – out of a total of 2,203 on the market – that paid a real rate of return, and only one for higher-rate taxpayers.

    Darius McDermott, the managing director of Chelsea Financial Services, an independent financial adviser, said: "The simple fact is if you have £1 and you invest in cash, you will lose out once you take into account tax and inflation. Most savings accounts are just a waste of time.

    "But if you put that £1 into to a good high-yielding fund you will make a return. Of course your capital could increase or it could fall. That's the risk, but I would put my £1 into equities every single time."

    Complete article-:
  2. Savers and investors have always had a history of getting scrooged for the benefit of borrowers and debt defaulters.

    The article does not mention the immediate loss of 0.5% on shares because of stamp duty-transaction tax. That's an incentive right there, not.
  3. LeeD


    The expert in the article has personal interest in people investing in stock market funds. (I understand he advises people regarding which funds to invest in.) However, this doesn't make his point less valid. With increased money supply due to asset purchases by Bank of England, inflation is inevitable. BoE is about to miss this year's inflation target.

    This is in stark contrast with monetary policy in the Eurozone. Whenever ECB completes and asset purchase, it takes the money added into the system back by borrowing in the money market.

    Regarding stamp duty, it compares favorably with 3% - 4% per year (or even more) lost via inflation. The more important factor is investing in a stock fund is always a gamble on the stock market going up.
  4. Translation: bank backed pump and dump.
  5. guirtner the US treasury 'tells' that chinese should be spending more and saving less.

    well who the hell does Geurtner think he is to tell the working class poor to buy ipods iphones and buy stocks that they cannot afford...

    china doesn't have welfare state like the US..there is no unemployment insurance and no free pensions or is cheap cause their are no inflated medical cost and ripoff drugs.

    tell the working class poor to buy overpriced inflated stocks and overpriced iphones and eat cake.a nd buy inflated real estate and go in debt with the bank. enslaved to the banks.

  6. jokepie


  7. Visaria


    Agreed. Why is this guy recommending shares at a 2 and a half year high?
  8. LeeD


    Because his business - stock buying advice - has slowed down. The main characteristic of teh market top is everyone who wanted to stock up on stocks have already done so.
  9. financial advice from a financial advisor selling stock to clients.

    what do you expect him to say..the financial advisor gets paid in commissions from mutual funds for pushing their funds and hedge funds. broker fee.

  10. Visaria


    So we're at a market top then?
    #10     Dec 22, 2010