After Gordon Brown had finished his Budget, I thought I owed him an apology. Now I'm not so sure. Let me explain.
Some months ago, I issued in these pages a heartfelt plea for the Government to sort out the effect that the council tax was having on pensioners. Pensioners, that is, who have a little in the way of savings - not on the poverty line, but not much above Mr Brown's minimum pensioner guaranteed income, or whatever it's called. These near-poor pensioners have had a hell of a time of it in those areas where the council tax has gone up so much that it might take 20 or 25 per cent of their income. Hardly fair, by any standards.
Improvements in council tax benefit and the savings credits have helped, but I really thought Gordon had smashed the problem with his £200 rebate announced in his Budget speech. It wasn't till after people had gone through the small print that I realised this was for one year only - election year.
I was sadly disappointed - and so will many pensioners be. The Tories are still offering them a straight £500, presumably on a continuing basis, and the Liberal Democrats are promising a local income tax which should be fairer to pensioners and everyone else too. I'm only greying rather than grey, but Mr Brown hasn't won my vote until he does better for the old folk. Limiting their free bus passes to off-peak travel just adds insult to injury.
All the more reason, then, for all of us to make the best provision we can for our old age. Mr Brown talks a lot about the challenges of the globalised economy and the threat posed by the rapidly growing Chinese and Indian economies. Well, some of us have been trying to turn these threats into opportunities. For the past three or four years, I've been dripping a few pounds a month into the JPMF Indian Investment Trust, one of the very few vehicles for investment available to the retail investor interested in a pure play on the sub-continent. (That may be why, unusually for an investment trust, it trades at a premium to net asset value.) It has been a fascinating and rewarding investment, which I have written about before.
I'm excited now, because they've hit a new high, again. But I think my investment in India illustrates a useful point, which is that if, broadly, your economic security is going to be threatened by something, then perhaps you ought to find a way of hedging that and, perversely, having a stake in that which threatens you.
Thus, say, if you work for Sainsbury's, you might want to have some shares in Tesco, because the chances are that any damage to your business and your livelihood will come from that source.
That's the opposite of what happens in most firms, where employee share ownership plans, laudable for the incentives they provide, have a perverse effect on the individual's financial security. So, if the business does badly, you lose your job and find that your nest egg of company shares has been shrinking in value as well.
I don't happen to think that I'm about to be replaced by someone in Mumbai, but you never know, and the very broad point still applies. In any case, they've done jolly well, although it's been a bumpy ride.
Such volatility points up the great benefits of pound cost averaging, through a monthly savings scheme. If you had piled in at their peaks in 2000 and 2004, you would barely be ahead now. So, by investing by instalments, I've avoided putting much money in when the shares have had occasional huge spikes and have enjoyed the upward trend.
Most of the shares that I bought were about a half or a third of where they are now (about 163p). Shares in the JPMF Indian Investment Trust may go down again before long. It doesn't take much bad news to unsteady them, but for the long run and as a small, spicy addition to a well balanced portfolio, I don't think you can beat them.Reuse content