Taking charge of your own finances

Retirement will be no fun without enough money to enjoy it. Unfortunately most of us are being kicked out of our company's defined benefit funds, can't rely too much on the government for help, don't understand the defined contribution funds we've been put into and are not saving enough anyway. To make matters worse we are being ripped off by a savings and retirement industry that is skimming of the top of our investment returns while giving us very little good advice or value.
This blog contains some of my thoughts on taking control of retirement and pension savings. It will look at ways of cutting costs by using cheap online stockbrokers and share dealing combined with cheap index funds and Exchange Traded Funds (ETFs) to build diversified portfolios. This is a work in progress so I welcome your thoughts.

Sunday, November 20, 2011

Niel Woodford on Recession and Japan

If you saw my previous post I looked at the views expressed by Merryn Sommerset Web saying that we are not facing a Japan-like situation in Europe.

Here is a big of a counter-argument from one of Britain's best value investors. He reckons that we are facing a deep recession and that bank deleveraging will lead to a Japan like situation. It makes for depressing reading.

U.K.’s No. 1 Fund Manager Says Europe, Britain Facing Recession - Businessweek:

"“The outlook for the European economy has deteriorated quite significantly,” said Woodford, manager of the Invesco Perpetual High Income Fund, which has 11.1 billion pounds ($17.7 billion) in assets. “I do expect the euro zone to be in recession next year and the U.K. economy could well be following suit.”

As for Japan, he thinks that:

“Bank deleveraging means a credit contraction, the sort of thing we saw in Japan.”

It is a frightening thought. Mr Woodford has positioned himself very conservatively with investments (according to Bloomberg) in AstraZeneca Plc, GlaxoSmithKline, Reynolds American Inc. and BAT

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