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Stuart Bell Chief Executive at MPFS considers the effect of quantitative easing
Stuart Bell - Chief Executive of MPFS Ltd
Stuart Bell Chief Executive at
Metropolitan Police Friendly Society
(MPFS) considers the effect of
quantitative easing and when is the
best time to invest and where to
invest your savings.
Expect the Bank of England to make a loss on its latest pursuit - “Quantitative Easing” - printing money electronically
to buy (mainly government) bonds and drive up their price.
These bonds will fall in value when normal market conditions return and the scale of government borrowing hits home.
The bank bail out is still making the headlines and unsettling investors.
Investors and taxpayers are paying a heavy price for getting the banks into
shape so they might resume normal lending. Earnings in the banking sector
look set to become much more staid - but it remains to be seen whether Fred Goodwin will submit to Harriet’s “Court of public opinion”. (Is that what
they used to call a lynch mob?)
It gets harder to know where to save your money. Interest rates have
never been so low, and both shares and property still look very risky. We
would expect the stock market to bottom out this year, but it might well fall
further in the coming months.
Timing that entry into the market is a mug’s game - so, at MPFS, we continue to believe it is right to spread our investments. This policy has stood our members proud over the years. It also means investing with us is a lot less risky than plunging into the stock market, especially in current conditions. But for those who are prepared to buy shares and who get their timing right, the prospective rewards are high!
We would expect money invested now to be a good long term bet, even if the timing is not quite right. Our lump sum contracts therefore come with a guarantee if held for ten years. All annual bonuses are paid out in addition to the initial investment, even if conditions are poor. We might add a final bonus, but we won’t claw back any bonuses already added. Of
course, you can cash in before 10 years, but then we reserve our rights to adjust the cash-in value when markets are down.
• For further information please call metphone on 28912, telephone 01689
891454 or visit mpfs.org.uk
