It is that time of year when big stories are hard to come by and news seems dominated by a positive plethora of titbits. Some, needless to say, are of more significance than others, but with markets unsettled by higher inflation, pursuing the more interesting revelations seems as good a way of remarking on the investment scene as any. Indeed, there are plenty of contradictory views around but then, who should ever be surprised at that.
Among these could be considered the recent publication of a City Rich List. As it happens, it supported, rather than contradicted, my recent conclusions. Even the big hitters were way down the national rankings.
The overall list suggests that the finance industry accounts for less than 10 per cent of all the rich in terms of numbers, significantly less if you add up their total accumulated wealth. Retailing and property still seem a better bet than stocks and shares.
One interesting element of this table, though, was the esoteric nature of the financial businesses that spawned the wealthiest individuals. Heading the list was an interdealer broker and a hedge fund manager. Private equity also featured prominently. Moreover, few of those listed were household names. Even in the canyons of the Square Mile, many would go unremarked. A secretive lot, these wealth creators, although quite how you put a capital value on a small firm running hedge funds for a wealthy few and delivering extravagant returns to the managers beats me.
Meanwhile, the chorus of Jeremiahs proclaiming the end of the bull market in residential property has gained a pretty influential voice recently with Bank of England Governor Mervyn King's warning.
Much of the concern presently being expressed appears to stem from the old axiom – the crowd must be wrong.Certainly, all the signs are that your friendly cab driver will soon be telling you (if he hasn't already) how, once he finds a tenant for his latest buy-to-let property purchase, he will quit the rat-race of taxi driving, say goodbye to the congestion charge and earn his living solely as a landlord.
I confess to being mildly concerned by the growing belief that property is a universal panacea in a savings market wracked by doubt and suspicion.
There have been corrections – to use a popular euphemism – in the housing market before. In the early 1990s, residential property lost a third of its value in very short order. In Germany and Japan, falling house prices persisted for many years. It is not that I necessarily expect anything on such a dramatic scale to happen this time around but trusting to a single asset class to deliver your investment solutions is never sensible.
The fact remains, though, that people trust property in a way they no longer trust stockmarket products promoted by banks and insurance companies.
No wonder pharmaceutical grandee Sir Richard Sykes has been roped in to trying to find the best means of restoring confidence in traditional savings products and their promoters. He has a tough task but failure does not bear thinking about. An over-regulated, margin-controlled savings industry will be incapable of providing the solutions so desperately needed by the Treasury.