Every week I read a large number of personal finance and investing articles. Here’s my latest weekly shortcut to the best.
I’m away suffering through a stag weekend today, so this selection of personal finance articles from the blogosphere doesn’t cover anything published after Thursday.
“Get your favourite stocks here, everything must go!”
Eating breakfast this morning, I caught Hugh Hendry, the gloomy and currently outperforming UK fund manager, on CNBC.
Hendry’s main call, which he has been rewarded by repeating for months now, is to avoid equities.
Yes, the market has fallen, Hendry says, but that doesn’t mean it won’t keep falling. Look at the Great Crash of 1929, and all the down years that followed. Markets can keep dropping for years.
I like the twinkle in Hendry’s eye and his contrarian reflex, but regular readers will know I’m not convinced that he, me, or anyone else can really time stock market moves or spot bottoms over the short-term.
Horizontal diversification is when you hold different instances of the same asset class. In this form of portfolio diversification, you’re trying to reduce localised or industry sector specific risks.
A broad index-based ETF is a good example of horizontal diversification.
Lloyds shares face a steep climb back, even (or because of) with government help
Today Lloyds Banking Group ceded control to the UK government in return for UK taxpayers insuring £260 billion of toxic loans it acquired via its government-brokered merger with HBOS.
The UK government’s stake has jumped from 45% to 65% under the terms. Lloyds has also agreed with its new owners that it will lend an additional £28 billion over the next two years.
It’s a sorry turn of events for an institution that can trace its roots back 250 years, and which was once rightly regarded as one of the UK’s safest – and most boring – stock market investments.
This was a bank which paid a reliable 8-10% dividend for years, ignoring calls for the payout to be scrapped and the money reinvested in proprietary operations or other ill-fated wheezes dreamed up by Wall Street during the boom years.
