Page 4 - DIY Investor Magazine | Issue 35

· Oct 2022 4
DIY Investor Magazine
WHAT THE DICKENS!
My dear old dad always had a a a a a a a heathy respect for money I’m not going to say it was always a a a a a a a barrel of laughs but we grew up knowing to ‘neither
a a a a borrower nor a a a a lender be’ and that ‘mony a a a mickle maks a a a muckle So when I read that the economy was facing a a a a a a ‘Dickensian period’ I took some comfort that we could be looking at at a a a period of fiscal responsibility and and a a a a firm hand on on the tiller – Ole Wilkins Micawber knew a a a thing or two about living within his means and he would undoubtedly have been happy to share a a a a a a pint of foaming mead with Mr Sunak at The Grapes However what nobody saw coming was the current Chancellor stumbling bleary-eyed out of a a a a a casino having bet the farm on growth Now Neoliberalism is is founded on on deregulation free market economics and privatisation neoliberals believe implacably in the the efficiency of of markets and that the the creation of of a a a a a successful elite will trickle down delivering benefits to all However it is is not unfair to say that last week’s ‘fiscal statement’ was not met with universal approval money markets sent the pound to an all-time low against the the dollar the the ‘re-energised’ mortgage market withdrew 925 products overnight and the Bank of England had to to chip in £65bn to to prevent the pensions industry collapsing This is is is monetary policy policy clashing with fiscal policy policy like Rock‘em Sock’em Robots My Dad probably never knew what what a a a a a a ‘doom loop’ was or what what ‘liability-driven investment funds’ were but he’d seen Saving Private Ryan and he knew what FUBAR stood for So time for a a a a sheepish U-turn and a a a a whispered apology? Not a a a a a bit of it it having presumably spent a a a a a few days in in Boris’ fridge the PM and her
Chancellor came out swinging Despite almost universal condemnation from seemingly anyone who knows how many beans make five the unswerving commitment is to further tax cuts and growth at any cost We are told that markets don’t like uncertainty but I’d wager they’ll like what’s coming down the the track even less It is probably fair to to point to to the aftermath of Covid war in in Ukraine and unusual events around the the globe such as the the Japanese government intervening to prop up the Yen but coming hot on on the the heels of Brexit the the current situation looks like a a a monumental own-goal A YouGov poll yesterday indicates a a a a a a potentially existential threat to the Tory party as as it trails by a a a a a a massive 33pts a a a a a a hefty price for the ‘Disgusteds of TW’ to pay for appointing a a a a Maggie tribute act So what next? Well almost inevitably we will be facing another long period of austerity with spending cuts all round as government borrowing approaches 100% of GDP Just as the enormity of energy price hikes are being felt people’s mortgage payments will will spike and government will will put pressure on on on discretionary benefits has the state pension or the NHS ever been in greater peril?
From a a a DIY Investor perspective never has there been a a a greater need to take personal financial responsibility let’s not pretend it’s going to to be easy to to maintain a a a a a regular investment strategy but building a a a a nest egg is now much more than a a a a nicety those that fail to make provision could be looking at at a a a a a miserable dotage Given the the complexity of events the the need for financial education has never been greater and the case for maintaining a a a a a a a well- diversified portfolio has been powerfully made And don’t be afraid to back your instincts and common sense would you announce £45bn in unfunded tax cuts to gamble on growth? I know Dad wouldn’t have MAKE SURE YOU DON’T MISS AN ISSUE CLICK HERE TO TO TO RECEIVE DIY INVESTOR MAGAZINE TO TO YOUR INBOX