It can be argued that the current UK rate of inflation of 4 per cent is hardly disastrous. The rates of inflation in countries such as India and Argentina are much worse – 9.3 per cent and 10.6 per cent, respectively. But even at our modest rate of shrinkage, £100 would only be worth £45 in 20 years. Consequently, it is more important than ever to protect the spending power of our money by investing in growth assets such as shares. Using historic growth rates of around 8.3 per cent, the same £100 could grow to £492 over the same period.Sure, sure, with historic growth rates, everything would look wonderful. But we're not starting at the bottom. With the Footsie 100 at 5829, just past its peak, the betting is that it's on the way down. So don't put your pennies into shares unless you know what you're doing.
And yes, I admit to a small portfolio of carefully selected shares and, if I have made a bob or two over the past 9 months, I don't expect similar results over the next 9 months.