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Simon English: Paid expert's top tip - ignore shares advice

Simon English
Wednesday 11 July 2012 17:53 EDT
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Outlook On the subject of City analysts, I ask my very favourite one, just in passing, what he does for a pension.

He's skipped employers quite a lot and I assumed, rightly, that he arranges it himself, what with his being such a financial genius.

Bear in mind that this man's job is to advise the Square Mile's grandest, most important, most powerful institutional investors which shares are worth buying and which should be avoided.

As such, the pensions of millions of the rest of us partly depend on how good his advice later proves to be.

It turns out that not only does he not take his own advice, he doesn't take anyone else's either. His entire retirement money is invested in an index-tracking fund, one that will go up only if the market does.

It doesn't try to select winners and losers on the basis that there's no point. Its starting assumption is that expert recommendations are over priced at best and actively wealth-reducing at worst.

And that's where he puts a fifth of his salary every month, because he doesn't trust City folk with his retirement plans.

Stock picking, says my analyst, is a mugs game.

s.english@independent.co.uk

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