Will your pension be hit by the BP collapse?
As problems at BP continue to grow there are fears that many people in the UK could be hit by the collapse in share price. This is a company which has for some time been one of the largest components of the FTSE 100 and therefore a main component of many tracker funds and pension arrangements. As a consequence, it is highly likely that any stock market-based pension arrangement will have some exposure to the BP share price although concerns about the overall impact on pension arrangements could be overdone.
This predicament shows exactly why we need to diversify our investments for the longer-term to ensure that one issue does not have a massive detrimental impact on future funding. While there's no doubt the BP, as one of the largest components of the UK stock market, is prominent in many investment funds it is not the only investment on the market!
However, the impact of the BP share price has been immense with further problems around the world and specifically in Europe causing investors major concern. It is easy to forget that short-term investment in equities can be very volatile although in the longer-term, assuming the UK economy recovers, the impact of any one "bad investment" in a spread of investments should be fairly limited.
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