America screws up ; this shouldn’t affect our retirement – but it will

The S&P was down another 2% yesterday, Free sharing link to the FT article is here

The price we pay for investing in global passive equity funds, as most of us in DC “pensions” do , is that we have to see our pensions devalued by the folly of Trump’s economics. I have not felt so helpless at the hapless since the short spell when Liz Truss took control of our economy and messed up the funding of our pensions while sending interest rates spiralling.

There are many who point to better funding positions for DB pensions due to “cheap” liabilities but the truth is that most DB pensioners were not protected from inflation and DC savers are now discovering they have no protection as their pension values are slashed.

We need to start thinking, as Nest is, of investing for the long term in assets that pay steady income and are not simply valued by jazzy techonomics.

We need to think of pensions as a means of getting paid and not a pool of wealth to pass on to the next generation.

I am not sure why what happens with the Nasdaq and S&P should govern my retirement. It is time that we took a long-term view on our investment strategy and articulated it to those whose pensions our schemes are looking after.

There has to be good sense in our pension investment and I hope that what comes out of the current pension investment review (led by a good HMT person) will ensure that we are not exposed to the volatility not just of US stock markets but to plays on exchange rates.

Our pensions can do more than they are currently doing, We must thinking of pensions as personal and think of them – for the most part – as collective when funded, collective when not.

The country should be behind our pensions as part of our country’s capacity to act independently of others. Right now we appear to be in the hands of Donald Trump and that doesn’t do.