Another quarter gone

I just looked back to my last quarterly post - to see it was put up the day before Mark Carney took over at the Bank.  Since then, we have commitments to low rates and employment - how the world changes!  Sadly for Mark, I think the UK banking community is somewhat more cynical than his native Canada - betting on interest rate rises much earlier than announced.

I for one am with the bankers here - what state body can hope to control free markets, especially in a country that slowly but surely will slip down the rankings of global economies over the coming decades?  I'd prefer to place my money on King Canute.

So let's talk about me!  And there is some good news this quarter:

1. I have swung back into the black, with a growth rate of 1.06% - not much, but that includes the fees I am subject to
2. Annuity values seem to have jumped - so I am on track to be on more than 51% of my current salary (and hopefully no mortgages by then)
3. My TER is down, remaining on a consistently downward trend that one would expect as a result of a buy-and-hold-forever strategy.  Its dropped from 0.81% to 0.74% in three months - and it was at 0.88% six months ago.   So that's more of my wealth to me, and less to fund management companies.

I sit on the sidelines at the moment, watching the 'recovery' take place - you can see from my performance vis-a-vis the FTSE All Share that i am definitely missing out.  My question is this: do I believe in what is happening in the world right now?  The UK house pyramid is being inflated by the government, by providing state support to those who would otherwise not be able to save a great enough deposit to buy a property - so prices go up.  What a surprise.

Do I think the world's savers will accept being robbed by their governments printing money forever? It isn't impossible that this is the new norm, but it should be remembered that those who benefit from rising asset prices are those who hold assets - those with small savings do not, generally, hold much other than cash.  So it is only those with a LOT of money who are going to benefit from the current market moves - and that is a recipe for social unrest.

My use of ISAs over the last few months has increased, in line with my overall strategy to move cash to a place where I can easily get access to it.  The 40% gamble you take as a high rate tax payer with your pension is that to buffer government interference - but I don't want to place all my eggs in one basket.  Cash in pensions comes out at 65; cash in ISAs comes out when the holder perceives government-driven risk and wants to get their savings abroad.

A downbeat post this one, but I believe markets have to go up and down - that is the free market - when government begins to try and make them go on up forever, unwilling to accept the natural vagaries of the capitalist system, bad things are likely to happen.