As we entered May the newspapers seemed only too happy to coin a new piece of alliteration for Apr...
As we entered May the newspapers seemed only too happy to coin a new piece of alliteration for April's rally in the FTSE ' the Baghdad Bounce.
It's no bad thing that the national newspapers are writing about the markets in positive terms ' it certainly beats them talking financial meltdown ' which surprise, surprise never came. But in their eagerness to find something new to write after April's historic near 10% rise in the market are they in danger of one again creating the wrong impression about what stock market investing is all about?
Most advisers reading this would love to be able to have clients who had enjoyed the full rise in April, or indeed have clients who had bought the market at the 3,300 level as the war approached and were now looking at an index 500 points higher.
But the world ' and more importantly private investors ' are not like that. The good news for advisers is that if they managed to get investors into a UK equity based Isa in March, there is a good chance that when the first six monthly statement comes out that the £7,000 should be worth nearly what they put in or they may even be in profit. That hasn't happened for years.
The industry retains a responsibility to make investors understand what stock market investment is really about . Importantly the industry, government and journalists must explain to investors what it is not, then they may understand what it is.
It is not a high interest cheque account. It may be right to argue that 'fear and greed' attracts investors in the first place to stock market-linked investments, but it is what keeps them there in the long term that is more important.
Greater education, greater understanding and greater awareness will all contribute to this.
The Government must move personal finance education to the forefront of secondary education syllabus. Is it more important to understand what arithmetic averages are or a pension?
The industry needs to create more realistic expectations among investors about returns. Fund managers are beginning to turn away institutional investment business which is unprofitable, surely advisers should be turning away business from clients with unrealistic expectations?
The role of the financial media is a whole new comment piece on its own, but it's fair to say that both the consumer media and professional press, such as Investment Week, have a responsibility which is on an equal level to that of the Government and product providers.
Your clients probably missed the bounce, and they will probably miss most of it until the market has gone through 4,000. More fool them. But once fear and greed has enticed them back ' a little late ' let's hope we can all keep them a bit longer by being a more responsible industry.
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