Good reads from around the Web.
A warm welcome to you if you’ve found Monevator today after hearing Mark on Money Box on BBC Radio 4.
If you want to learn more about the pros and cons of discounted funds, check out our recent article.
And there’s plenty more to dig into after that…
Why you should read Monevator
Monevator is about investing money for the long-term, whether it be for your retirement, paying off your mortgage, financial freedom, or some other goal.
We also write about saving, property, entrepreneurship – and now and then just rant about whatever gets our goat.
It’s written by two ordinary people, from our perspective as savers and investors.
Most of our articles are long, a bit nerdy, but (we hope) always readable and entertaining.
We write long articles because while investing can be easy and simple, too many people have been confused, misled, or misguided over the years.
We’re doing our bit to put that right!
If you’re new to the site, you might get started with our guide to passive investing.
A few good reads to begin with include:
There are hundreds more articles in the archives, so please do dig around!
You should also check out our broker comparison table to find the cheapest home for your investments.
Make yourself at home
The rest of this post consists of links to money and investing articles on the web that I’ve found interesting this week.
I do this every Saturday morning, and there’s always something worth reading.
We have more information about investing at our fingertips than any previous generation. But at the same time it’s never been harder to know what to do with your money – nor more important to take charge of your financial future.
Enjoy the site. And stick around! 🙂
From the blogs
Making good use of the things that we find…
Passive investing
- How to be an index investor – Rick Ferri
- Beat the S&P 500 with the S&P 500 – Rick Ferri [Again!]
Active investing
- The top 17 quotes from Warren Buffett’s annual letter – Clear Eyes Investing
- Buying into trouble in the emerging markets – DIY Income Investor
- Should Apple care about maximizing returns? – Musings on Markets
- The Vodafone effect on dividends from UK shares – Rob Davies/Maven
- RobinHood app promises zero-commission trading [US so far] – TechCrunch
Other articles
- Longtermism is the secret to investing success – Under the Money Tree
- How investors underestimate risk – WSJ (featuring Mike)
- J. Money is collating great articles at Rockstar Finance – Rockstar Finance
Book of the week: Are you just getting started with investing? We recommend two good reads – Smarter Investing
Mainstream media money
Articles from the big boys and girls.
Passive investing
- The best investing strategy? Get out of your own way – N.Y. Times
- The original inspiration behind tracker funds – Market Watch
Active investing
- Meet the world’s luckiest investor – Motley Fool US
- Active or index funds? Why not both? – Wall Street Journal
- Is it time to buy into ultra-cheap Russia? – The Guardian
- Why so many great investors cite The Intelligent Investor
– Bloomberg
- Tesla looks like a bubble. Will it pop? – The Daily Beast
Other stuff worth reading
- Who has benefited most from five years of 0.5% interest rates? – BBC
- Average small central London flat to cost £36m by 2050 – Guardian
- The US economy’s “Baby Bust” problem – The Atlantic
- How to invest like a billionaire – Market Watch
Product of the week: Santander’s new 123 Mini account for kids will pay up to 3% interest, reports The Telegraph. Children can earn the interest on balances up to £2,000.
Like these links? Subscribe to get them every week!
Hey, thanks for the shout man! Glad you’re enjoying them 🙂 They’re super fun to curate (though extremely time consuming, haha…) so appreciate the help in getting the word out. There’s a lot of great bloggers out there in the PF world, and hopefully this helps intro them to more of an audience. I’m sure you’ll be featured on it quite soon again – really enjoying your site.
It was good to hear a Monevator voice at last, and on Radio 4 too!!
Why didn’t they give the address of this website? You could have got a lot of new fans!!
I enjoy Monevator. Hats off to you fellows!
But I also regularly visit some of the MSE forums, particularly the one on pensions. Many of the posters requesting help aren’t stupid, merely aware of their ignorance of the (frequently baffling) world of pensions. Nonetheless the frequency there of persistently bovine stupidity is striking. I didn’t join my pension at work because …. I didn’t expect to stay long/I thought it was too young to bother with a pension/I am only going to work another ten years before retiring …. and on and bloody on. Then some kind soul makes an intelligent suggestion. But no: Mr Stupid is not interested in facts or logic, and replies with more surly dimwittedness. What if anything can be done for such people isn’t clear to me.
Well done – and well delivered challenge to the other party making out HL were okay because they’re going to drop their fees sometime in the future. Really? The sword of truth, eh 🙂
@dearieme > What if anything can be done for such people isn’t clear to me.
Nothing. It is the flipside of the gift of free will.
@curious Sara
http://www.bbc.co.uk/programmes/b03xcrzm
12min 15sec to 12min 20sec
“Mark Donald @ monevator.com”
That was what I heard
@dearieme – MSE isn’t exactly a sophisticated audience
@ ermine – keep up the great work
@J.money – another great new blog for me to read
There was indeed a quick mention at the start, but I noticed we didn’t get a site namecheck at the end like Holly… 🙁
@ The Investor – yeah but I bet nobody would check her website out. Unless it has photos……………
anyway 13 brokerage accounts sounds really clever!!!!!!!
13 x£50,000 = £6.5million – I might got take her advice lol
>@dearieme > What if anything can be done for such people isn’t clear to me.
>Nothing. It is the flipside of the gift of free will.
Actually, this is what the nudge unit is all about! (e.g.changing it to opt-out.)
What’s the difference between ignorance and bigotry?
I don’t know and I don’t care!
@rodent — I don’t want to become the PC police but please hold off comments like that on this site. We have all sorts of readers here, and happily even women! 🙂
Re: Holly’s hoard, I did wonder along the same lines…
Thanks all for your support! It was fun to be on the radio and finally get a chance to air some Monevator views in a different medium. Hopefully we’ll get another chance.
The 13 accounts, Holly’s mentioned these before, they are essentially review accounts used to compare customer experience for the reports the Platforum compiles for the industry. I would suggest that this is a qualitatively different experience from genuinely using those accounts as a customer.
I find I soon adapt to different website accounts after a short period of time. They differ in degrees of slickness and quirkiness but they all do the job.
Holly’s suggestion in the piece was that you had a choice between Hargreaves Lansdown and some kind of start-up that didn’t like answering the phone.
Clearly that’s not right. There are many well established companies out there that provide a good service at a more competitive rate than Hargreaves. The difference is that Hargreaves is a bigger brand, hence you pay a premium. I certainly wouldn’t dispute that Hargreaves is highly rated for customer service. But that doesn’t mean the rest are a pack of chimps. I personally have always been happy with the customer service I’ve had elsewhere.
But you have to decide how much extra you want to pay for the luxuries. No matter who you are, you can get a better deal elsewhere. The more assets you have, the bigger the saving you make. And the less assets you have, the more you need to keep every pound in your own pocket not someone else’s.
Well done, Accumulator! I look forward to more Monevator input on R4. (And beyond? How telegenic are you?)
May have mentioned one can escape the 0.45% platform fees by switching to ETFs. Btw, who is Mark Donald ?
Holly sounded like an HL apologist. Her salary relies on her not biting the hands that feed, so clearly she had to be… diplomatic. But even so.
The statement that around 0.25% will be the rock bottom platform fee is ludicrous. Already flat-fee platforms undercut that in spades for decently sized holdings. Platform charges larger than those of funds that generate the actual returns are indefensible.
As for everyone except HL being a fly-by-night startup offering no protections against simply making off with your whole portfolio… Pfft.
@ Tyro – Ha ha. I wouldn’t frighten anyone let’s put it that way. And neither would The Investor.
I also discovered, while prepping for the interview, an extra layer of complexity when it comes to super clean funds.
Many fund managers rebate units to investors in order to achieve the discount offered by HL. In other words, you get bonus shares in your fund which lowers the OCF. But these unit rebates are subject to tax if the fund is held outside of ISAs or SIPPs.
How many people will realise that?
http://www.ifaonline.co.uk/ifaonline/news/2331890/most-hargreaves-wealth-150-deals-face-rebate-tax
@dearieme, I don’t invest in my pension at work because I’m too young. I calculated it out and even with the employee contributions because the money would just sit there keeping up with inflation for 40 years, I would most likely make a better return by investing the money in an index tracker, so that’s what I do. Am I being silly?
@Andy as long as you are a basic rate taxpayer _and_ you won’t spend your ISA (which you are presumably using instead of a pension, and if not why not?) then you are doing okay. However, note that in case of losing your job etc ISA savings count against you for many benefits, pensions are protected, and ditto for bankuptcy. I’m not saying you will suffer either, but crap can happen over the 30-40 years of a working life, so you should be aware of the slightly higher risk profile 🙁
I take it there is no employer match on offer? It’s usually worth taking a pesnion up to employer match if so, since that’s free money. And if it is a defined contribution pension as is most likely, you can move it to a supplier that charges lower fees/offers investments more suited to your investing style when you move from that employment.
So you may wish to find out more about those issues, but there is some case to be made for the young using an ISA at first, though the temptation to spend it is a major risk! The value of the pension wrapper increases dramatically as soon as you start paying 40% tax and/or are within 10 years of retirement (because the value of the tax-free bung associated with the 25% pension commencement lump sum is worth more if you are within 10 years of retirement than if you are 20 years off)
@TA > Holly’s suggestion in the piece was that you had a choice between Hargreaves Lansdown and some kind of start-up that didn’t like answering the phone.
You did well at pushing back on what was basically FUD and served the listening public well in shining some light on the FUD. Well done!
@Andy: “even with the employee contributions [you presumably mean employer] because the money would just sit there keeping up with inflation for 40 years, …”: if it would “only keep up with inflation” you are presumably talking about a final salary scheme which you expect to defer at some time in the future. (i) A deferred FS pension tends to make an excellent conservative part of a portfolio, making you free to invest the remainder of your portfolio more riskily. Why would you not accept having part of your portfolio heavily subsidised by someone else? (ii) By what magic can you know that you are “most likely make a better return by investing the money in an index tracker”? Show us a summary of your arithmetic. (iii) How can you be certain that you will leave that employer never to return? MSE threads are full of people who didn’t join the pension because they “knew” they’d only be in that job for a short while, and years later are cursing themselves because that wasn’t how things turned out.
So, yes, you are possibly being silly. I can’t speak for you, of course, but at MSE it’s patently obvious that lots of posters come up with a panoply of ludicrous “justifications” for not opening a pension, when the true reason is just an emotional spasm.
Well done Accumulator MD, radio appearances can be really nerve racking and I think you explained your points clearly. Holly sounds like she’s had some training. Were you in the studio or calling in remotely?
If the broker market goes the same way as everything else it looks like HL will survive as the Waitrose (differentiator) and there’s still a battle on to become the Aldi (least cost). We should probably be more worried about trusting our money to the (stuck in the) middle ground brokers than the cheapest ones.
Nice to get the publicity!
I did feel Holly tried to imply that all these other platforms(non-HL) were a bit financially shaky, which seemed a bit absurd. CSD have a market cap of £216m and TD Direct parent have a market cap of $93billion.
I also expect that the gap in customer service will probably be closed. The three websites(HL, TDD, CSD) do look quite similar these days.
I keep saying it, and I will it say it again.
You don’t have to use a platform.
You can invest directly in funds and pay no platform fee, no brokerage, no commssion, no dilution levy and no spread.
I didn’t realise it sounded that way, I meant pictures of 13 different brokerage accounts.
@rodent — Fair enough!
@Rodent Infestation
“13 x£50,000 = £6.5million” No, £650,000, though that’s still a lot.
I suspect she has more like £5k in each one, which is £65k.
Regarding website links, R4 did at least include one on the website page for that programme.