Saturday was one of those blessed days when stars aligned, Yeovil beat Wealdstone away, Bournemouth beat 10 man Arsenal and Eamonn O’Connor’s horse Tamfana finished in the frame in the QE II Stakes at Ascot.
But I came down the stairs early on a Sunday morning. with a hangover having celebrated the Windsor Ukulele orchestra’s triumphant appearance at the Christopher Wren last night- a little too assiduously. (For those who follow these things, its singer is my partner – who is happily recovering her equilibrium!)
One turns in such times to John Plender, a voice of reason. I had been saving up reading his article on de-risking (published Friday) for a Sunday Morning, remembering Wallace Stevens and Sunday morning which I first read at Cambridge days 45 years ago
Complacencies of the peignoir, and late
Coffee and oranges in a sunny chair,
And the green freedom of a cockatoo
Upon a rug mingle to dissipate
The holy hush of ancient sacrifice.
Plender hits the nail on the head
Plender guides us through a narrative of value destruction wrought by trying to de-risk our retirement experience and ends
Even if we accept that there is scope for pension professionals to work towards more effective de-risking, there is no escaping an important underlying reality. Defined contribution schemes, collective or otherwise, are not really pension schemes. As Clacher and Keating point out, they are no more than tax privileged savings funds — ultimately, a second best answer to the challenge of obtaining a secure income in retirement. We forget that at our peril.
Which is the conclusion I have come to , after 41 years of explaining to people that the only way to properly hedge the risks of inflation is to invest in real assets that provide inflation plus returns over time. I mean those assets that carry the short term risk of illiquidity and of volatility in short-term valuation. And the culmination of a lifetime’s work is not a savings fund but a wage for life from the investment of those savings,
Investment to me is a way of letting others do the hard work for me, something which I am getting rather better at as a I enter my mid-sixties. In a poem co-joined in memory (and written at much the same time) Eliot ruminates
Because I do not hope to turn
Desiring this man’s gift and that man’s scope
I no longer strive to strive towards such things
(Why should the agèd eagle stretch its wings?)
Why should I mourn
The vanished power of the usual reign?
I do not mourn the vanished power of whatever reign I had because the fruits of 41 years’ saving are now paying me a pension which is enough for me to stop work. I have a secure income in retirement (why should the agèd eagle stretch its wings?)
And yet, here I am – at the keyboard at around 5.30am staring over the Thames , where the silent cormorants sit on their perches, before the dawn but clearly outlined in the light of the moon,
Some of my friends are dying, they will not be able to read my blog next year.
So I will keep on writing and publishing the life-affirming work of Keating, Clacher and McGrath, who happily convene in Plender’s splendid piece from which I have quoted.
I am not dying , or at least not dying very fast. Consequently I will continue to invest in assets that protect me in the long-term from the value destruction of inflation, assets that aim to provide a real return , not merely an insurance – assets that work as hard as I have done.
Because when those forbidding birds collect outside your front window, you know that you are best to dissipate the holy hush of ancient sacrifice and remain deadly calm in as you face the great unknown.
The hunter’s moon is beyond me and Dvorak’s song to the moon is on the radio. I ask you to listen to this wonderful recording and then read Plender’s splendid article. It will give you a rather better perspective than I can!
And you might like to think about Wallace Stevens’ life affirming scepticism that reaches its apotheosis in this magnificent stanza
We live in an old chaos of the sun,
Or old dependency of day and night,
Or island solitude, unsponsored, free,
Of that wide water, inescapable.
Deer walk upon our mountains, and the quail
Whistle about us their spontaneous cries;
Sweet berries ripen in the wilderness;
And, in the isolation of the sky,
At evening, casual flocks of pigeons make
Ambiguous undulations as they sink,
Downward to darkness, on extended wings.
That’s some glidepath!