Ignore shares mayhem
THERE may have been a time, years ago, when it was possible to make a killing from the stock market by nipping in when prices were low and quickly selling out as they shot up. Not any more. As families sat down for dinner on Monday evening the folly of trying to time the market was exposed in gory detail.
Shares on the U.S. stock market had been struggling along when, suddenly, they plunged and were 6 pc down in a matter of minutes.
To put that into perspective, America’s Dow Jones index suspends trading if shares fall by 7 pc in a single day. So we’re talking a gigantic, rapid fall.
Then, in the blink of an eye, prices bounced back. After a few hours of chaos they finished 4 pc down. It made terrifying viewing.
Yesterday wasn’t much better — one moment the U.S. market was down and the next it was up, seemingly with no rhyme or reason.
Years ago, this type of dramatic one-day swing was incredibly rare; if the market was falling, it was falling, and that was that. But now City traders use computer algorithms to buy and sell automatically when they hit certain prices. The computers act instantly, in unison, and trade in vast quantities. Hence the sudden avalanches and rapid recoveries.
It’s turned the art of share trading into a gamble that’s better left to those with more money than sense. The rest of us now have a perfect reason to stop paying as much attention to the madness.
Investing in shares, after all, is totally different to trading them. When you invest in a pension or Isa you should be thinking about the long-term. This is money you can afford to stash away for five, ten, 20 or even 30 years — or at least it should be.
Over that sort of period what matters is not timing the market, but time IN the market. As the figures we quote on pages 38 and 47 prove: the longer you stay invested, the better your chance of a decent retirement. By contrast, the more you fiddle around, the worse the probable result.
So your only reaction to the market dip this week should be to keep squirrelling money away fastidiously until your 50s and 60s. Then, start thinking about how you’ll take an income and make it last for life.
And there’s no cause to panic yet if you’re near — or in — retirement. After all, today’s 65 year olds are likely to hold many of their investments another 30 years. That’s plenty long enough to ride out the sort of bumps in the market we’ve seen this week.
Smart can be dumb
SMART meters don’t help anyone except the power giants. As I wrote last week, these devices merely tell you a bit more about what you already knew — you’re using electricity — in exchange for giving up your privacy.
If you really want to save energy and money you need something like Hive, from British Gas. These electronic devices allow you to use a mobile phone to control your heating, lights and plug sockets. The problem is they cost £200 to install, which puts people off.
So how about energy giants divert some of the £11 billion smart meter cost (added to all our bills) towards giving families Hive? That would put homeowners in control of their usage — without the privacy, safety and compatibility concerns of the new meters.
Unhappy landings
JET2 boss Philip Meeson reminds me of the spotty teenager Kevin from Harry Enfield’s TV show.
Mr Meeson’s pathetic excuses for refusing to join the complaints scheme for flight delay claims smack of being obstinate just because he can. Asked to join the redress service, which ensures customers are treated fairly, you can almost hear him moaning: ‘Ugh, this is SO unfair!’
Money Mail campaigned for years for better treatment over long flight delays after you sent us overwhelming evidence that airlines couldn’t be trusted to treat passengers fairly.
The Civil Aviation Authority watchdog agreed and convinced nine of the biggest ten airlines to sign up. But Jet2 stuck up two fingers to customers where even Ryanair — often criticised for putting profits before passengers — has played nicely.
Joining a flight delay compensation arbitration scheme must now be obligatory for all airlines.