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Weekend reading: Little things matter less than getting started

What caught my eye this week.

A reader prompted an email discussion with my co-blogger The Accumulator about what the £1 million pension lifetime allowance [1] (LTA) meant for where you should hold your different asset classes.

The reader said he thought bonds should go into his SIPP and equities into his ISA, since there was a lower chance of the total return from bonds eventually pushing him up against the LTA. In ISAs, of course, his equities could grow indefinitely without any such fears.

Interesting and novel idea, I thought, albeit a rich person’s headache to have. The Accumulator was less convinced. We kicked about various pros and cons.

I also thought about this when reading a White Coat Investor [2] article this week on these sorts of allocation decisions (albeit in a US context).

Because as much as I like discussing investing minutia with my co-blogger, I agree with the White Coat Investor that getting things approximately right is infinitely preferable to being paralysed by attempting to get them exactly right.

WCI writes:

“The truth is that investment management is probably the least important aspect of your financial success and certainly the easiest to automate.

Maybe it’s okay to quit trying to optimize it (especially since nobody really knows the optimal asset allocation a priori) and just get something reasonable done.

You can certainly save yourself a lot of hassle and advisory fees that would help make up for any under performance issues.”

I often get emails from anxious readers who’ve been wondering for half a year what platform to use to begin investing £50 a month on, or something similar.

It’s great that they’re paying attention to costs and consequences. But at this level it’s far more important that they just get started.

Have a great weekend!

From Monevator

Cashing in a final salary pension is just the first decision – Monevator [3]

We had a big debate about inheritance tax, in case you missed it – Monevator [4]

From the archive-ator: Long-term returns from alternative assets – Monevator [5]

News

Note: 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.1 [6]

FTSE 100 chiefs earn 100-times the average wage – Guardian [7]

Electric vehicle growth is already shaking up the metals markets – Bloomberg [8]

‘Big Short’ fund manager says financial system is safe [Search result]FT [9]

Check your pension is not accidentally over-exposed to equities after the long bull run – Bloomberg [10]

Products and services

Where to save as bank account interest rates edge up – ThisIsMoney [11]

Investors turn to AIM stocks for inheritance tax savings [Search result]FT [12]

Film and TV investment flops under fire [Search result, on EIS schemes]FT [13]

Student Loans Company is a ‘nightmare’, say graduates – Guardian [14]

Cheaper rates for £35bn of remortgages due in next two months – ThisIsMoney [15]

If you own Co-Op bonds you need to act now before ‘haircut’ – Telegraph [16]

Emerging markets are now more exposed to finance and tech [Graph]Templeton [17]

A quick look into A J Bell’s passive fund-of-funds – DIY Investor [18]

Cheap Blackrock hedge fund has doubled its assets in six months – Bloomberg [19]

Understanding Bitcoin and other crypto-currencies – Musings on Markets [20]

Comment and opinion

Investors should embrace the power of doing nothing [Search result]FT [21]

Indexing isn’t just for quitters – Pragmatic Capitalism [22]

A cashed-up employee can fire their boss – SexHealthMoneyDeath [23]

Stop thinking in terms of black and white, or in or out – Irrelevant Investor [24]

Time scarcity and the allure of more – A Wealth of Common Sense [25]

An interview with Vanguard’s new Chief Investment Officer – Denver Post [26]

Winter is coming for overvalued growth stocks – The Value Perspective [27]

The first rule of investing is… – Abnormal Returns [28]

Stock pickers need arrogance and independence – Gannon on Investing [29]

Early retirement could be bad for your brain [Two months old]LifeHacker [30]

Seven tips for a new hedge fund manager today – Nicholas Kapur via LinkedIn [31]

Commodities and a diversified portfolio [PDF]Gerstien Fisher [32]

Off our beat

The new Tesla Model 3 has no competition – Futurism [33]

The cult of the line: It’s not about the merch – New York Times [34]

Men will lose the most jobs to robots, and that’s okay – Wired [35]

Kitchen sponges are festering germ dens – Ars Technica [36]

Cannabis company buys Californian town to build pot-friendly outpost – Bloomberg [37]

And finally…

“It is actually quite easy to be a great investor. Have faith in capitalism; there may be stormy weather at times, but capitalism is a pretty effective system for creating wealth. Own global capitalism by owning a global market tracker that puts as much of the market return that it generates in your pocket, not someone else’s.”
– Tim Hale, Smarter Investing [38]

Like these links? Subscribe [39] to get them every Friday!

  1. 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”. [ [41]]

Offer: Head to RateSetter [42] to earn higher interest – and a £50 sign-up bonus – or learn more [43] about this offer. Remember investing money with P2P lenders like RateSetter [42] or Zopa [44] involves more risk than with cash savings.