Meltdown in the financial markets.

Where to start?

Goodwin?  I’ll save my breath; his type doesn’t merit comment.

My personal, and horrifying, observation stems from my time launching Direct Line’s Tracker PEP in 1999.  I questioned my client’s timeousness as I, personally, felt the market was overheating with the Footsie as it was at 4,400.

I was politely told to get back in my box.  What did I , a mere ad man know was the unsaid point.

Today, 10 years later it is 25% or so below that.

“It’s a long term game” they said then.

Really?

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5 thoughts on “Meltdown in the financial markets.

  1. I’m fairly glad I’m a spender not a saver… Though if I was only spending my own money at the moment I’d be happier.

  2. Good point.

    I once went to a talk by george soros about malpractice in investment. He said – and this is true of ‘Badloss’et al – that no-one complains what financiers and financial salesmen do on the way up. It’s only when losses arrive that legislators get tough. Fred was doing exactly the same things that got him a knighthood. for which he is now being pilloried. At best, the current reaction is ‘too little too late’, at worst sheer hypocrisy.

    Nonetheless, the history of bull and bear markets suggest the indices will rise over record levels at some point in the future. (Bear markets generally last about 1/4 of a bull market, and the last bull market lasted 16 years.)

  3. An interesting insight here, Mark, but I think, for once, in the client’s defence there are a few things that need to be considered here before dismissing the notion of the Tracker PEP launch as a mistake.

    Firstly, I think you’ve got a typo on the FTSE position at launch as the index never really dropped much below 6000 in 1999 until early 2001. Secondly, a Tracker PEP (or ISA as it is now) is a fairly efficient way of saving – even if it is launched at the top of a market. Many people invest into these things on an ongoing basis so buying more units at the low times (it was sub 4000 in 2002 and it’s back in the doldrums now) and that smooths out the exposure to the variable nature of the index. Across the 10 years there were good opportunities to get out too – if you’d bailed in October 2007 when the FTSE was sitting at 6730, I reckon you’d have made a reasonable return – and, most importantly, it would be money saved not money spent.

    But that’s all beside the point. The most important issue for all of us is that we don’t hold a central position in the companies that we work with. As a consequence, we don’t shape their products in the way that we should and so the marketing is done last rather than first. Whatever the product, whatever the sector, whatever the company, if you do the marketing first – creating brilliant companies with brilliant products that people actually want, you’re much more likely to succeed. Coming in at the tail end to put lipstick on a pig doesn’t really work for anybody.

    It would be easy to blame the clients for this but that wouldn’t tell the whole story either.

  4. Alan I can assure you it was around 4,000. My dates may be a year or two out though. but no more than that. That means we’ve been in a bear market for 10 years so far.

    I’m not blaming the client here I was actually being a big head in that I thought the market was overheated and history shows I was right.

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