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Si1

FTSE has significantly lagged world equities since 2012, why?

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Poor performance of state supported financial sector? Cameron's crony capitalism? Help to buy causing misallocation of capital?

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37 minutes ago, Si1 said:

Poor performance of state supported financial sector? Cameron's crony capitalism? Help to buy causing misallocation of capital?

nope...it's been horrendously lagging most developed indices since 2001.

mainly due to the mantra of massive state intervention and petty people-micromanagement.

since 2001 US is UP 50%, germany is UP 100%, and we have been treading water(up about 3% since nasdaq peak )

should speak volumes about the hostile business/regulatory climate of the country.

 

 

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I always found it easier and more rewarding to invest in US S&S. Investing in the FTSE feels somehow wrong, like playing with the corpse whilst it's lying in the coffin at the wake.

I suppose it's because we still have a Ponzi economy and nearly everything relies on HPI and low interest.

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37 minutes ago, oracle said:

nope...it's been horrendously lagging most developed indices since 2001.

mainly due to the mantra of massive state intervention and petty people-micromanagement.

since 2001 US is UP 50%, germany is UP 100%, and we have been treading water(up about 3% since nasdaq peak )

should speak volumes about the hostile business/regulatory climate of the country.

 

 

Gordon Brown's deficit spending took off from 2001 onwards, no wonder.

Edited by Si1

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What you are saying is not actually true... The problem with the UK Stock Market is that the top 20 companies are related to telecomunications, oil, banking and resources. They have not done well during the last decade and a half. HOWEVER, the FTSE 250 has a much better performance record because it has more dynamic companies.

The other point to consider is that the big companies of the FTSE 100 have a much higher dividend yield. They are cash cows. This is a return that you don't see in the index price evolution.

I don't normally participate in any discussion, but I thought that I would be helpfull in this one.

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The majority of the large components of the ftse 100 are traditionally international companies, so the performance of the domestic economy and UK gbp growth would be expected to have a limited impact on the ftse 100

Since 2009, you've obviously had a sizeable chunk of the most influential constituents absolutely hammered, and not really recover. First, the banks, then from 2011 or 2012, oil and mining. 

So, the sectors that were over represented in the index by having a lot of the very biggest companies on the index have performed badly, and are not expected to be growing rapidly in the future either. Basically, Britain needs to come up with some new mega cap companies focused on more future proof industries

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7 minutes ago, Burbujista said:

What you are saying is not actually true... The problem with the UK Stock Market is that the top 20 companies are related to telecomunications, oil, banking and resources. They have not done well during the last decade and a half. HOWEVER, the FTSE 250 has a much better performance record because it has more dynamic companies.

The other point to consider is that the big companies of the FTSE 100 have a much higher dividend yield. They are cash cows. This is a return that you don't see in the index price evolution.

I don't normally participate in any discussion, but I thought that I would be helpfull in this one.

Posted this whilst I was writing my response. Completely agree and hadn't thought of the dividend point. 

3.5% per year over 10 years represents a little over 40% capital growth

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20 minutes ago, Foreverblowingbubbles said:

Posted this whilst I was writing my response. Completely agree and hadn't thought of the dividend point. 

3.5% per year over 10 years represents a little over 40% capital growth

Bear in mind also that US companies tend to focus on growth rather than dividends, and some other indices (DAX?) are actually Total Return too.

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19 minutes ago, WinstonSmith said:

All factors that apply to the other countries. So p#ss poor excuses......

Well, look at the Spanish IBEX 35... It has done really bad just because of the banking sector. In the S&P500, compare which companies were dominating in market cap in 2005 and compare them to the current ones? Any suprise?

 

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5 minutes ago, Inoperational Bumblebee said:

Bear in mind also that US companies tend to focus on growth rather than dividends, and some other indices (DAX?) are actually Total Return too.

It's all about value of the firm. A good way to assess an FT company is to see how much of its operation is leveraged and for every dollar generated, how much of that dollar is returned as profit.

Most companies are now shifting money from China to America to continue wealth growth ?

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9 hours ago, Burbujista said:

What you are saying is not actually true... The problem with the UK Stock Market is that the top 20 companies are related to telecomunications, oil, banking and resources. They have not done well during the last decade and a half. HOWEVER, the FTSE 250 has a much better performance record because it has more dynamic companies.

The other point to consider is that the big companies of the FTSE 100 have a much higher dividend yield. They are cash cows. This is a return that you don't see in the index price evolution.

I don't normally participate in any discussion, but I thought that I would be helpfull in this one.

Thanks ever so much, appreciated.

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Sterling?

Swap their money to USD to buy US shares and they got currency appreciation and capital appreciation. Swap it to sterling for the FTSE and the currency depreciation wiped out the capital appreciation. 

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3 hours ago, Democorruptcy said:

Sterling?

Swap their money to USD to buy US shares and they got currency appreciation and capital appreciation. Swap it to sterling for the FTSE and the currency depreciation wiped out the capital appreciation. 

The result next Thursday will be huge for the indicies. Some Ftse 100 blue chips will do ok on a depreciating pound like Glaxo and the commodities stocks. Meanwhile domestic stocks will be hit on a Hung Parliament particularly construction and banks like Lloyds.

I'm in the latter camp and face huge losses if it goes the wrong way on Thursday as will most private sector pension plans.

 If Corbyn kills the crumbs the rest of us rely on to fund our retirements will he be bothered, I doubt it.

 

Edited by crashmonitor

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1 hour ago, crashmonitor said:

The result next Thursday will be huge for the indicies. Some Ftse 100 blue chips will do ok on a depreciating pound like Glaxo and the commodities stocks. Meanwhile domestic stocks will be hit on a Hung Parliament particularly construction and banks like Lloyds.

I'm in the latter camp and face huge losses if it goes the wrong way on Thursday as will most private sector pension plans.

 If Corbyn kills the crumbs the rest of us rely on to fund our retirements will he be bothered, I doubt it.

 

Should only affect the UK indices, so if pension plans are badly affected then that's the fault of private pension default funds not being sufficiently diversified/hedged and individuals just accepting the default fund rather than picking from the many options usually available. Not Comrade Corbyn's fault, ultimately. 

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2 hours ago, RentingForever said:

Should only affect the UK indices, so if pension plans are badly affected then that's the fault of private pension default funds not being sufficiently diversified/hedged and individuals just accepting the default fund rather than picking from the many options usually available. Not Comrade Corbyn's fault, ultimately. 

Well  Corbyn's 7 figure final salary package is underwritten by the tax payer ,sure he and others in the public sector aren't too bothered what happens to UK Corps. The two trillion deficit falls on the shoulders of the drones in the privare sector or £53, 000 per household.

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22 hours ago, RentingForever said:

Should only affect the UK indices, so if pension plans are badly affected then that's the fault of private pension default funds not being sufficiently diversified/hedged and individuals just accepting the default fund rather than picking from the many options usually available. Not Comrade Corbyn's fault, ultimately. 

Yes it always seems to me that a good fund manager should see these things coming and adjust his position accordingly, to limit losses and put himself in a position to rebuy at a lower price when the carnage is over.

So he would see elections/ brexit/ world events etc. as a great opportunity to sell high and buy low (or vice versa) and therefore boost the value of the pension fund and his own bonus.

Or is your money in the hands of reckless gamblers?

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Money has to be placed somewhere, they keep printing it after all, the algorithms and high-frequency trading keeps everything automatically going......money made it the micro margins, bid/offer and transaction fees, costs and charges....or take a bet and sit on it long-term.;)  

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