Never trust a financial journalist – here’s why

A few weeks ago, the FTSE100 was over 5900. At the time, US bank Citigroup issued a report claiming the FTSE100 would double to record highs in the next ten years. Sure enough, journalists were gushing over Citigroup’s claims. Here’s a link to probably one of the worst financial articles ever written http://www.telegraph.co.uk/finance/markets/ftse100/9149524/FTSE-100-to-double-to-record-high-in-next-decade.html. Actually, it’s not really an article. In my opinion�it looks more like a Citigroup press release rewritten by a lazy journalist to look like an article. Had you believed this rubbish and gone out to buy shares or put money in a unit trust, you’d already have lost over 5% of your money as the FTSE 100 is down to about 5660 and will go even lower as the eurozone implodes.

Citigroup’s claim is utter bollocks only aimed at getting PR and business for Citigroup. Over the last 100 years, US and UK stock markets have gone up by about 1% a year. So for Citigroup to claim they will suddenly go up by almost 8% a year�to double in ten years is clearly rubbish. There was a brief period in the 1980s and 1990s, when�markets went up by 4% a year. But that was due to a flood of baby-boomer money flowing into unit trusts and pensions. As the baby boomers retire, they will convert their pension savings into annuities. So money will pour out of stock markets and into things like government and corporate bonds. The US Government Accounting Office reckons that up to $1 trillion a year could be withdrawn from stock markets. Far from doubling as Citigroup and this (in my opinion) useless “journalist” suggest, stock markets may actually collapse. The only thing that could keep share prices up is if people in Asia, where there are massive savings, decide to put some of their money in Western stock markets. They might do this as Western stock markets are slightly less corrupt and rigged than markets in the Wild East.

So take it from me – the stock market will not double in the next ten years. Articles like this are trash and shoud be ignored.