Our pension funds still invest 60% or more of their funds in shares. This is now utterly illogical. This summary, from the FT, shows overall US share returns by decade since the 1920s:
This is not chance: this is reality. Markets have run out of steam. They have no more value to add unless and until more people have access to more wealth in the world – something markets themselves cannot deliver and which those who run them resist. Put simply – those with wealth have found out there is a limit to how many new white goods, cars, music, and IT you need. And most of the rest are poor and can’t now afford houses, let alone anything else. In that case markets can’t expand.
So, if pensions are to pay there is no point in investing more in shares in what people don’t want. There is only a need to invest in what people do want: a Green New Deal for a start.
The need for pension investment reform has never been more urgent – as I’ve been arguing for some time now.