How do the markets affect us?...pensions

Over the past week, we have had journalists, politicians & academics talking about...the markets.

So, how do the markets affect us?

The most direct way is a fair portion of people's pension money will be invested in UK shares. So if shares rise, your pension can go up, if they go down your pension value goes down.

If your pension has been invested in UK shares, your pension has probably  gone nowhere in the last 10 years.If that is the case, it is worth taking advice from a professional adviser about how to spread the risk and diversify.


Posted by Sean Wilson, APFS, Independent Financial Advisors (IFA), Swindon, Wiltshire.

Virgin II FTSE 100 Tracker Fund

Lawrence Gosling positively trashed Richard Branson & virgin Money with his comments in the previous post.

Would I, a Swindon based Financial adviser recommend Virgin products to my clients?

Well let's look at one.

The Virgin FTSE 100 is an investment fund which tracks the movements of the 100 biggest UK companies. This is not so great for a number of reasons.

• The FTSE 100 still contains Northern Rock
• Performance of FTSE 100 trackers is little better than breaking even over the last 7 years
• The Annual Management charge is 1%, its cheapest competitor is 0.2%

Summary
No

Stock Market Crisis? No, a correction.

Stock markets have been very volatile in recent weeks. In August many traders are on holiday and relatively small changes can cause huge swings in prices. The jargon used in such a situation is "a correction", typically there might be 2 or 3 corrections in any year.

In the long term markets should recover. The BBC noted yesterday that the FTSE 100 had merely returned to the values of October 2006.

Over the last 5 years markets have been relatively un-volatile historically.

There is an upside to the current volatility, now is a good time to buy. It is also a good time for clients with regular savings plans as their regular £50/100 buys more units.