Good reads from around the Web.
A wildly disproportionate number of Weekend Readings have focused on market volatility.
And today’s post of the week by Morgan Housel for the Motley Fool US [1] joins this innumerable crew.
Is there a more important subject in investing?
Perhaps keeping fees low [2], perhaps compounding [3] regular savings for the long-term – but both of these strategies can be disemboweled long before the finish line if you sell up whenever the stock market crashes.
As Morgan writes:
The biggest story in investing is understanding why so many people have been hurt by, and are skeptical of, a market that has increased 18,500-fold in the last century.
The answer is that people hate to see their money go down. Even temporarily.
We’ve discussed many times just how scary investing can be, usually with a look at the worst years [4] for returns.
What Morgan does with this piece though is show that even in the good times, stock markets are still tremendously volatile.
He calls this the “pain gap”, which is:
… the difference between what the market returns in a year and what it did during that year.
And he illustrates it with a cool graphic, which shows (in red) how big the swings between peaks and troughs were on average in a particular year, per decade:
Read Morgan’s article [1] for more insights on this under-discussed topic.
And enjoy the weekend, when at least the markets are closed to even the most avid (and hence pained) stock price watchers out there…
From the blogs
Making good use of the things that we find…
Passive investing
- The S&P 500 is the world’s largest momentum strategy – A.W.O.C.S. [5]
- On average, we’re average – The Evidence-based Investor [6]
- Mind fund details, not labels [US, puffy, but interesting] – Vanguard [7]
- Vanguard LifeStrategy: Year 1 Update – diy investor (UK) [8]
- Has factor investing been ‘over-fitted’ in back tests? – Alpha Architect [9]
- Going Smart Beta? Value looks less frothy – The Value Perspective [10]
Active investing
- Avoid “Absolute”-named funds [or, contrarily, buy now?] – Ritholz [11]
- Finding companies with durable competitive advantages – UK Value Investor [12]
- S&P 500 Sector ETF returns: 206-2016 – Charlie Bilello [13]
- SALT Conference notes – Market Folly [14]
Other articles
- How to hold down any job – The Escape Artist [15]
- Actuaries’ longevity illustrator tool – Longevity Illustrator [16] [via Mike [17]]
- The secret to longer life: Keep working – Squared Away blog [18]
- Buy-to-let is a rich person’s game shocker – Simple Living in Suffolk [19]
Product of the week: A new tracker savings product from United Trust Bank [20], reported in The Telegraph [21], looks interesting. The two-year fixed term option pays 1.7% and the three-year 1.8%, but the neat bit is they promise to pay at least 1.2% above Bank Rate. So if the Bank of England raises interest rates, their rates will also rise. Your money is locked until maturity, mind.
Mainstream media money
Some links are Google search results – in PC/desktop view these enable you to click through to read the piece without being a paid subscriber of that site.1 [22]
Passive investing
- Swedroe: The overconfident enemy in the mirror – ETF.com [23]
- Index funds are good corporate governors: Who knew? – Morningstar [24]
Active investing
- US ETF ticker symbols are getting less campy – Bloomberg [25]
- Apple is the new IBM – Quartz [26]
- Beware of property funds that can lock up your money – ThisIsMoney [27]
- Did Goldman pick a suspiciously good time to Buy Tesla? – Bloomberg [28]
A word from a broker
- Is passive the new aggressive? – TD Direct Investing [29]
- Royal Mail posts 5% dividend increase – Hargreaves Lansdown [30]
Other stuff worth reading
- Merryn: What’s so complicated about pensions? [Search result] – FT [31]
- HMRC to tax bonus payments on current accounts – ThisIsMoney [32]
- The 31 hotspots where house prices will surge now – Telegraph [33]
- 2.5% may be a more realistic pension withdrawal rate – Guardian [34]
- Higher-rate taxpayers hit record levels [Search result] – FT [35]
- Aspiring actors now drive for Uber instead of waiting tables – Vanity Fair [36]
- Celebrity house price crash [Poor dabs!] – ThisIsMoney [37]
- Successful people hate to be told they were lucky – NY Mag [38]
Book of the week: Did you enjoy Todd Wenning’s dividend case study [39] this week? Todd has since emailed me to clarify the bargain £1.99 Kindle price tag for his book I mentioned is actually a special offer that runs out this weekend. So click right over to Amazon [40]
Like these links? Subscribe [41] to get them every week!
- Note some articles can only be accessed through the search results if you’re using PC/desktop view (from mobile/tablet view they bring up the firewall/subscription page). To circumvent, switch your mobile browser to use the desktop view. On Chrome for Android: press the menu button followed by “Request Desktop Site”. [↩ [45]]