{"id":91816,"date":"2025-02-16T14:45:43","date_gmt":"2025-02-16T14:45:43","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/investing\/retirement-investing-today-lenses\/"},"modified":"2025-02-16T14:45:43","modified_gmt":"2025-02-16T14:45:43","slug":"retirement-investing-today-lenses","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=91816","title":{"rendered":"Retirement Investing Today: Lenses"},"content":{"rendered":"


\n<\/p>\n

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\nA chart of the monthly FTSE 100 price looks something like this:<\/p>\n
\n\"Monthly<\/a><\/div>\n

\nClick to enlarge, Monthly FTSE 100 Price<\/i><\/p>\n

This is the chart that you\u2019ll see on all the mainstream media channels and it shows that the FTSE 100 still has about 32% to fall if it\u2019s going to match the worst of the global financial crisis (GFC).\u00a0 This sounds like a long way until one thinks about a big failing with this type of chart.\u00a0 It\u2019s unit of measurement\u2026\u00a0 The FTSE 100 is priced in \u00a3\u2019s and they\u2019re constantly being devalued via inflation.\u00a0 So, let\u2019s take out a different lens and try and look at the chart in real, inflation adjusted, terms.<\/p>\n

Firstly, let\u2019s correct for the consumer price index (CPI):<\/p>\n

\n\"Real<\/a><\/div>\n

\nClick to enlarge, Real (CPI) Monthly FTSE 100 Price<\/i><\/p>\n

That shows that instead of falls of 32% being needed it\u2019s actually closer to falls of 16% for parity with the worst of the GFC.<\/p>\n

Now let\u2019s correct for the retail prices index (RPI):<\/p>\n

\n\"Real<\/a><\/div>\n

\nClick to enlarge, Real (RPI) Monthly FTSE 100 Price<\/i><\/p>\n

\nNow we\u2019re talking about 8% falls for parity with the worst of the GFC.<\/p>\n

So then the million pound question becomes, from a financial perspective is COVID-19 going to be worse or better than the Global Financial Crisis?\u00a0 My answer to that is I have no idea so here\u2019s what I\u2019m doing.<\/p>\n

Over the past few weeks, we\u2019ve gradually built up just enough food and other supplies to see us through 14 days of self-isolation just in case we need to do the right thing by our friends, neighbours and acquaintances.\u00a0 This included 1 packet of toilet paper, 1 bottle of ant-bacterial soap, no hand sanitiser and no baby wipes.\u00a0 This stock piling of toilet paper, soap, hand sanitiser, baby wipes and other important items by some is just sticking the middle finger up at others saying \u2018I\u2019m alright Jack\u2019 in my view.\u00a0 My local supermarket shelves are now empty in these areas.<\/p>\n

We\u2019re also pseudo social isolating by just minimising our contact with people generally while also still living well. Practically, this means we\u2019re still spending plenty of time in the great outdoors but doing no travel (international as well as no local buses and trains \u2013 one of the great things about being walking distance to facilities), no dinner parties and no visits to local restaurants.<\/p>\n

On the financial side I\u2019m yet to hit any of my rebalancing bands, which I\u2019ve set at \u201cIf any asset allocation gets more than 25% away from nominal I will either sell or buy as appropriate to reduce back to nominal<\/a>\u201d so have done nothing financially, yet.\u00a0 Right now from a rebalancing perspective it looks something like:<\/p>\n