If you tell a lie often enough, people will eventually swallow it. That is the principle adopted by those in positions of power and influence around the world – one which the UK’s long-suffering savers have learned at their considerable cost.
Take North Korea for example. This country sounds like the most miserable place on earth. The grey-clad masses sweat and toil to keep body and soul together, at the same time being expected to praise the leadership of the villainous Kim Jong Il.
Kim is of course a truly evil man who would stop at nothing to stay in power, but in reality he does not have to try so hard. The real basis of his continuing hold on the country is one giant lie. He has told the populace that they have never had it so good – and in their ignorance most assume it to be true.
Two myths the government wants you to believe
This is the basis of any totalitarian regime that, in the words of historian Arthur Schlesinger, “crushes all autonomous institutions in its drive to seize the human soul”. Things in the UK have not quite reached these proportions. But still our politicians regularly make assertions that they know to be a load of hot air.
Take economic immigration for example. Gordon Brown was fond of telling us that we need a young labour force to generate the wealth and tax revenues required to look after the older generation.
Politicians repeatedly make this self-serving assertion because it avoids confronting the alternative. The much better solution – and one that would relieve the pressure on our overcrowded public services – would be to ensure that people work long enough and save hard enough to support their own old age.
Another myth is put about by bankers and Boris Johnson (who as mayor of London feels obliged to speak up for the capital’s citizens) is that the City creates wealth. Again this is nonsense.
Sure, if the money that passes through the hands of financiers is cleverly directed into the most productive investments, the financial system can play a part in wealth creation. Also, by appropriating the money of foreigners the City can transfer wealth from overseas into the UK. But the notion that financial services can ‘create wealth’ simply by shuffling money around is just not true.
But there is a bigger myth that you need to be concerned about…
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The one big lie that’s fed to UK savers
UK savers are exhorted to put their money into mutual funds. They are told that it is in their best interests. But in fact it is only in the best interests of the fund management industry, enabling it to skim off its customers’ money in the simplest possible way.
Every weekend the newspapers are full of suggestions for mutual fund investment. These suggestions are peddled by journalists who have been wined and dined by the fund management companies themselves.
We are told that collective investment is best – not because it is in our best interests, but because it suits others. My message to you is: don’t be brainwashed!
Don’t assume that what you are told is good for you actually is good for you.
The fund management business is based on one big lie – that investment into funds beats direct investment into the stock market and managing one’s own portfolio. It doesn’t. It simply enables fund managers to get rich at your expense.
I firmly believe that you would be far better off taking control of your own investments. That’s why I write Penny Sleuth each week – to feed the best ideas I find to private investors. To reach out to anyone looking to build their wealth without recourse to slippery fund managers.
So keep reading Penny Sleuth. And I’ll keep sending investment ideas your way.
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• This article was first published in Tom Bulford’s twice-weekly small-cap investment email
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