See my earlier article on investment trust NAVs, discounts, and premiums if you don’t know what those terms mean.

The stock market isn’t totally efficient, in my view. But it seldom hands out free lunches.

You might then wonder why an investment trust would ever trade at a price below what its assets are worth (that is, at a discount) – let alone why some people would be dumb enough to pay more for it (a premium).

Actually, there can be good reasons for both situations. Discounts are especially common.

In late summer 2008, for instance, I posted about numerous income investment trusts trading on 10% discounts in that deep bear market.

Discount aisle

Reasons for a trust trading on a discount may include:

• Investors are scared, and so having been dumping their shares in investment trusts. Most trusts are less liquid than their underlying holdings. This can mean the trust’s share price falls faster than its NAV, increasing the discount.

• Investors may be skeptical that the trust’s NAV is really as much as is claimed. Private equity trusts – where valuations are infrequent and often off-market – are typically discounted for this reason. Commercial property trusts (REITs) may trade at a discount if investors suspect real world prices are falling faster than management is updating the trust’s NAV.

• A lack of faith. Investors may believe bad management is going to reduce the investment trust’s NAV instead of growing it. This is often seen with trusts with a poor track record.

• Disinterest. Simply the whims of fashion. Discounts often close and widen from month to month with little apparent rhyme or reason.

Theoretically a very large discount should be arbitraged away by the market before long. In reality sometimes discounts can persist for years before action is taken.

For example, when I first published a version of this article in August 2010 I wrote:

Alliance Trust is one huge old trust that has traded on a discount of nearly 20% for an age.

Arbitragers have looked at releasing the value (by buying the entire trust and then selling all its holdings for a 20% gain, minus costs) but so far nobody has pounced.

Interestingly, the discount finally began to narrow a few weeks later! It’s now around 10%.

What happened? Well, from memory Alliance Trust’s performance improved a tad – or at least investors took a more generous view of it.

But more importantly, an activist investor called Laxey Partners targeted the trust in late 2010, demanding the board take action to limit the size of Alliance’s discount. This interest was enough to close the discount to 15% even before Alliance’s board implemented any explicit measures in response (such a formal share buyback plan).

The Alliance story went through many twists and turns, including the involvement of another activist and much boardroom drama. A Telegraph article from last October provides a recap.

The takeaway for our purposes – apart from wondering whether activist investors read Monevator – is to note that big discounts do not necessarily mean a trust is permanently impaired. They can be and often are reversed.

But sometimes big discounts do portend doom. I’ve seen the value of several specialist property trusts implode over the years. Usually they were overwhelmed with debt. In every case a huge discount preceded their demise.

Finally, discounts may persist when for some reason it’s not possible for an outsider to stir up much of a threat to the status quo.

Typically there’s a large controlling shareholder – perhaps the family that initially set-up the trust. Hansa Trust is a good example.

Premium aisle

As you’d expect, reasons for the rarer situation of a trust trading on a premium are the inverse:

• Investors are bullish, and have bid up the price of relatively illiquid trusts in their mania.

• Suspected undervaluation in reported NAVs. As with the equivalent situation with discounts, this will typically involve unquoted investments, such as property or private equity. Investors may guess the NAV of a trust has risen beyond its officially reported value. The Lindsell Train investment trust is a great example, currently trading at a 58% premium! Investors seem to believe the trust’s holding in its own management company is dramatically undervalued, despite said management urging otherwise. A clue that this is the cause of the premium (besides the sheer enormity) is that the Finsbury Growth Trust has the same manager and very similar holdings – except it has no stake in Lindsell Train. Finsbury currently trades around NAV.

• Strong faith in management. For example, Anthony Bolton’s China trust initially traded on a premium. Investors believed Bolton’s superb record with his UK fund implied he would grow the China trust’s NAV fast enough to make up for the premium and more. But it turned out he couldn’t – at least not in the short-term – and the premium evaporated. The fund now boasts new management and a 15% discount.

• Fashionable. If an investment trust has been in the news or is one of the only trusts operating in a hot sector, it’s often bid up in price.

As a rule of thumb, it’s best to avoid buying investment trusts trading on a sizeable premium, as you may lose money if it narrows.

However I wouldn’t quibble over just a 1-2% permium if you’re a hardcore investment trust owner. Refusing to pay anything but a discount can keep you out of excellent trusts with strong multi-year records for years.

Equally, a trust trading on a discount may not be the bargain it first appears – or at least the discount may not be set to narrow anytime soon. As always, it’s vital to do your own research.

Want more? Please do peruse our other articles on investment trusts.

The good news? You’re able to read English – and to put up with long, syllable-strewn sentences balanced by the occasional geeky joke – and so you’re reading Monevator.

Hurrah! Long may it continue!

But what if you live in Germany, or Sweden, or Barbados? The principles of personal finance and good investing may be international. But the vagaries of local taxes and regulations or what products and services are available in your country will vary.

So a few months ago I asked Monevator readers to share their best suggestions for personal finance blogs from outside the UK and the US that they know and read themselves.

Not mainstream media resources – they’re myriad, and easily found – but websites with reports from the trenches written by everyday investors and seekers after financial freedom.

Below is a list of what you came up with, together with a few words of explanation – paraphrased in most cases from the websites.

Many of the blogs you put forward are actually written in English. Perhaps that isn’t surprise given those making the suggestions were also reading Monevator? Regardless, it means that even if you’re investing with both your feet planted in Blighty, you might find a likely foreign sort to have a fling with.

(Just don’t tell me about it. What I don’t know can’t hurt me. What happens in your Chrome browser’s incognito mode stays in incognito mode. And so on.)

Beware: I have spent an enjoyable day clicking around these sites but I haven’t done deep due diligence. I’m relying on reader suggestions. I skipped a few, but if any of the remaining ones I’ve listed are scams or similar, please do shout below. Don’t take them as gospel until you’ve had a good dig. Actually you should never take anything on the Internet as gospel, even the stuff we write. (Except of course inspirational quotes written in Copperplate Gothic font and superimposed onto pictures of snowy mountains or tropical sunsets. Those all speak the truth and are sacred.)

Australia

Aussie Firebug – An anonymous blog detailing the journey to financial independence through investing in real estate and low cost index funds.

Dividends Down Under – A young couple detail their dividend-focused journey to financial independence.

StojFinance – A personal finance blog with a focus on investing and wealth creation. Jasper also talks about topics including saving money, money making ideas, and more.

Barbados

Odd Cents –Information about spending and saving, which as the author points out “pretty much encompasses everything in the finance world”. It’s curious to read a site like this from a country you might think of as a paradise escape destination.

Belgium

No More Waffles – A 26-year-old guy from Belgium trying to save and invest his way towards financial independence.

Canada

Blunt Bean Counter – Billed as a humorous blog about tax. Presumably has that market sewn up.

Canadian Couch Potato – A regular in our Weekend Reading links, offers peerless advice on passive investing through index funds. Only a shame that so much of the detail is for Canadians. Unless, of course, you’re Canadian.

Canadian Money Forum – A message board about money for Canadians. Gotta envy the connection between the labeling on the tin and what it does inside. (In contrast, what kind of fool would make up a word for the name his blog? *cough cough*)

Canadian Personal Finance – Long-time blogger who bills himself as the clown prince of personal finance.

Money We Have – A personal finance blog with an emphasis on travel.

My Million Dollar Journey – One of the oldies, it’s been around as long as Monevator. The author hit the million, and now riffs on general financial freedom topics as well as following the progress of a handful of guinea pigs readers.

My Own Advisor – Also aiming for a million Canadian dollars, with a focus on dividend income.

Tawcan – A mixture of ideas about lifestyle design and concrete plans towards achieving financial independence.

Young and Thrifty – Saving Generation Y, apparently. Good to aim high!

France

Les investisseurs – I know, it sounds like an exciting art house movie! But apparently it just means ‘investors’ in French. Monevator reader DavidChevance says of the site: “This is more a forum than a blog, however the issues discussed on it are very similar to those addressed on Monevator, with a significant bias towards investment in property, reflecting the widespread French aversion towards the stock market.”

Germany

Der Privatier – The author explains his path to financial freedom, how to grow your capital, and how to use it to generate a passive income.

Exstudentin – A 23-year old ex-student reports on her journey towards a quietly fulfilling life.

Finanzglück – German dad in his mid-30s with two young kids who aims to retire early. Writes about index investing, real estate, and family life.

Finanzwesir – Founded on the principle that the level of financial literacy today is around the lamentable equivalent of the “Can you get pregnant by kissing?” questions of the early last century. I like how he calls an emergency fund a ‘fire brigade’.

Frugalisten – According to Google Translate, the author is urging us to “say goodbye to the washcloth life”. I’d normally suggest something had been lost in transmission, except there’s also a photo of him waving around some currency together with a washcloth. Go take a look, German speakers. An adventure!

Klunkerchen – Aimed “at women (and all people)”. Interesting classification system, Klunkerchen! Seems very comprehensive. I notice it runs on the same theme I started Monevator on, too, many years back, so I got a little nostalgic. Germans have a different perspective on personal finance to us Anglo-Saxon sorts in my experience, but that’s a post for another day.

Madame Moneypenny – Aimed at women who want financial independence.

Ricardo Tunnissen – For seekers of financial freedom! Created by a former banker.

What Life Could Be – A European take on financial independence. The husband and wife team are big fans of US blogs, but missed the lack of domestic detail.

India

Personal Finance Calculators – Monevator reader Shan tells us: “There are a gazillion blogs in India but this is an absolute must. Professor Pattu has multiple retirement spreadsheets and a steady stream of common sense investing tips.”

Italy

Stalflare – Interested in investing and creating a sustainable future, by managing savings, expenses, and long-term investments.

Japan

RetireJapan – Perhaps the only English-language personal finance site in Japan. Provides information about local rules and regulations and has a small but active community.

Netherlands

Geld is tijd – How many blogs feature articles (with pictures) about making mealworm burgers?

In 10 jaar – Blog by a couple who set off in 2015 to become financially independent in a decade.

Mom4life – A mother of three writes about money saving and other financial tips.

Mrs EconoWiser – Dutch Mustachians. (May be defunct… not updated since December 2015).

Norway

Finansnerden – A Norwegian Monevator reader writes about his journey towards “having FU money by April 2026, through increasing income, saving, and investing in stocks, bonds and real estate.”

Pengeblogg – I’m told this is probably the longest running personal finance blog in Norway. I am ill-qualified to disagree.

Singapore

A Singaporean Stocks Investor – Curious site that’s apparently about securing a financial future in an uncertain world. Idiosyncratic but seems very personable.

STE’s Stocks Investing Journey – General thoughts on stock investing and personal reflections. Some links to other resources.

Turtle Investor – Seems to be a mixture of bargain hunting and index funds articles.

Sweden

Gustavs aktieblogg – A lawyer who invests in smaller dividend-paying companies to grow a retirement income stream.

Switzerland

Mustachian Post – How to build wealth by enjoying your life in Switzerland.

Retire in Progress – An Italian Software Engineer working in Switzerland for a big tech company, blogging in English. Saves a whopping 70% of his salary with the aim of retiring in his early 40s.

The Poor Swiss – English language. A young couple, working to become Financially Independent in Switzerland before they are 50.

South Africa

Dividend Tycoon – Recently refocused to be “about investing in general, especially the psychological side”.

The Investor Challenge – Infrequently updated and a bit hard to fathom the gist of it from here, but a reader suggested it.

Spain

Ahorro Capital – Also suggested by Monevator reader David Chevance, who also suggested most of the other Spanish sites here. Dividend focused.

Cazadividendos – Provides “high quality technical advice, similar to Monevator, on topics like for example the tax treatment of foreign (i.e. non-Spanish) dividends, how to declare them in your tax return and how the reclaim the rest of the dividend withholding tax from the foreign authorities.”

Dividends.es – An investing blog whose author also runs Investorinteligente. (Both may now be defunct… not updated since July 2016.)

Enorme Piedra Redonda –  More about about lifestyle, traveling cheaply, and meeting interesting people, as the author already took early retirement a few years ago. Infrequent posts. Our Spanish mole says it’s his favourite, as the blog owner is a great storyteller.

Invesorinteligente – An investing blog whose author also runs Dividends.es. (Both may now be defunct… not updated since July 2016.)

Jubilacion Express – Apparently it reads like a “newbies” blog but provides “detailed information”, according to our man in Spain. (At a glance it seems like it may be defunct, but my Spanish is diabolical.)

International / ex-pat

Andrew Hallam – Website home of the author of The Millionaire Teacher. Monevator reader Blacksmith salutes its “advice on passive investing, global diversification vs home currency bias, international discount brokerages, tips on practical implementation and pitfalls to avoid.”

The International Investor – TheAccumulator has linked to this one a few times. Advice and resources for investors in international markets.

Phew! A lot to chew through, but this list isn’t exhaustive – it’s just the sites you guys pointed me to. Have you got a favourite that isn’t on the list? Please tell us in the comments below, and add a few words explaining why it’s a good one. Also, regarding the post title I know that if you’re based in Japan or Barbados, then *we* are one of the international foreign blogs. But I didn’t want to say “outside the US and UK” in the title, as that could take the search engines in the wrong direction. Hence the island view of the world.

Every person I’ve spoken with in Britain says Trump will win. “Social stigma disappears in the booth, you have no idea whats coming.”

— Downtown Josh Brown (@ReformedBroker) October 5, 2016

The first to die was Protesilaus
A focused man who hurried to darkness
With forty black ships leaving the land behind
Men sailed with him from those flower-lit cliffs
Where the grass gives growth to everything
Pyrasus Iton Pteleus Antron
He died in mid-air jumping to be first ashore
There was his house half-built
His wife rushed out clawing her face
Pordacus his altogether less impressive brother
Took over command but that was long ago
He’s been in the black earth dead now for thousands of years

Like a wind-murmur
Begins a rumour of waves
One long note getting louder
The water breathes a deep sigh
Like a land-ripple
When the west wind runs through a field
Wishing and searching
Nothing to be found
The corn-stalks shake their green heads

Like a wind-murmur
Begins a rumour of waves
One long note getting louder
The water breathes a deep sigh
Like a land-ripple
When the west wind runs through a field
Wishing and searching
Nothing to be found
The corn-stalks shake their green heads

– From Memorial, by Alice Oswald

Given my views about what drove Brexit, it’ll be no surprise to hear I thought Trump would probably win. Surely everyone by now understands there are bigger themes at work? If you still want to argue, I presume you’re on-board with them.

Please don’t tell me it’s all about economic inequality. See the exit polls in the links below. Trump voter average incomes skew higher than Clinton’s.

(Also, for the umpteenth time, you personally might have voted for UK sovereignty. Fine, I respect that. But that wasn’t why your side won the referendum.)

I know some loyal readers hate these political asides. Unfortunately for them I want to speak out more than I want to keep them happy. Please skip to the links below for vanilla personal finance.

Sure, my hope is populism starts to recede as this pressure valve is released. That the extreme end of liberal thinking looks up from its personal political navel and re-engages with wider concerns. That Trump moderates in the White House. That the checks and balances work.  That things don’t turn out as badly as they can do once his sort of rhetoric is legitimized.

But if so, it won’t be because people who were appalled by it all just bury their heads, hold their tongues, and shrug.

It will be partly because they shouted it down, however modest their platform.

For now, regime change is in the air. Politically and in the markets.

[continue reading…]