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Keep Calm and Carry on Saving.

There is much excited chatter about as the FTSE100 index of top shares threatens to breach its ‘psychological’ barrier of 7000. I don’t understand it, quite frankly.

I do grasp that the FTSE has recently set a 15-year record – a high that was last marked as the zenith of the insanity that was the dot-com boom – and that is good news. It’s good news because the FTSE is where our savings, pensions, hopes and dreams are invested. It’s a nice feeling because it makes us all feel better that the only scorecard we have for the relative  wealth of our country is showing a new world record.But that’s all it is. A nice feeling.

Whether or not the index ticks up from 6999 to 7000 makes not a jot of difference….well 0.0014 per cent, technically, but you take my meaning. So the excitement is meaningless. Coincidentally, with the almost God-like timing with which he lived his career, this week marked the passing of the world’s oldest great investor, Irving Kahn, who died in New York at the age of 109.

Mr Kahn doubled his money in the Wall Street Crash of 1929 (he was 23 at the time unbelievably) because he saw it coming. He was one of the pioneers of the practice now known as ‘short selling’ and made money though every war (from the Second World War to Afghanistan) and every financial crisis (Great Depression, Energy crisis of 1974, DotCom Bust, 9/11 etc).So it is fair to say the late Mr Kahn, who was still working three days a week up to a short time before he died, knew a thing or two about saving and investing. Savings Image

In short he said, be patient, invest for the long term and make up your own mind. Get that? Make up your own mind about what to do with your money, your savings, your future. Among many things he said: “Our goal has always been to seek reasonable returns over a very long period of time. I don’t know why anyone would look at a short time horizon. In my life, I invested over decades. Looking for short-term gains doesn’t aid this process.”

My personal favourite is this: “I would recommend that private investors tune out the prevailing views they hear on the radio, television and the internet. They are not helpful. People say 'buy low, sell high’, but you cannot do this if you are following the herd.”

The single lesson from the excitement over the FTSE at 7000 then is this: Don’t forget the savings habit and just carry on.

You can read a fuller obituary of Irving Kahn, packed with solid investing wisdom here:

By Stephen McDowell

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