Stock market performance

Future stock-market performance is intrinsically uncertain, depending on continued recovery from the economic downturn. Recent problems in the global economy saw stock markets slump, but they have since rebounded to recover much of their former value.  In the short-term, markets are volatile, but the viability of pensions and grant-making trusts relies upon there being a positive return over a long period of time, both from dividends paid to shareholders and a rise in prices.

What are the implications?

  • Many trusts and grant-making foundations invest in shares, so their income and level of grants they make will be affected (see level and sources of VCS income).
  • Individual savings and investment products also rely on the stock market, so fluctations may influence consumer confidence and spending.
  • Poor returns over the past decade mean that private pensions and pension funds that rely on long-term growth have suffered.
  • The recovery in stock market prices has allowed some financial institutions and investment banks to make large profits.
  • Opportunities for investment may still exist for those with some spare capital.

Moving forward

  • Does your organisation have any spare capital that it can invest?  If your charity pays for investment advice, do you have the necessary skills on your board to hold them to account?
  • Pensions depend heavily on the stock market. If you have a defined benefit scheme, how will your organisation manage fluctuations? Are a lot of your staff due to retire at the same time? Do you have sufficient reserves?
  • Faced with mounting criticism of their profits and bonuses, investment banks may be keen to find new ways to demonstrate social value. How can you harness this to benefit your organisation? 

Want to know more?

A turbulent decade for the FTSE

Published by: The Guardian

Date: December 2009

What is it? An interactive guide showing key events and changes in stock market prices over the last decade.

How useful is this? Provides a really good overview of the events that have caused stock market volatility, in a simple to follow chart.

Other comments:

How falling stock markets affect you

Published by: BBC news

Date: 2003

Format: Web

What is it? A summary of how falling stock markets affect individuals.

How useful is this? Useful for those wanting to know more about the implications for individuals of falls in the stock market. It sums up arguments that some may use as to why the stock market is irrelevant to them, and illustrates how this is not the case.

Other comments:

FTSE 350 Index at Timetric

Published by: ONS / Timetric - the statistics are provided by the Office of National Statistics, but presented using a third-party charting tool.

What is it? A chart showing the indexed-level of stock market prices since 1986.

How useful is it? The FTSE 350 index includes the largest 350 companies in the UK whose shares are traded on the London Stock Exchange. This chart does not include the latest fluctutions in market prices, instead it focuses on the prices at the end of each month as collected by the ONS. It shows how prices have varied over time. This chart is published by Timetric, a private sector company specialising in producing charts of data over time.

 

 

Last updated at 16:03 Wed 30/Mar/11.

Discuss

How will this affect your organisation? Have you considered it during your strategic planning? Can you share any interesting relevant links?

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