What were you doing on 23 September 2022?

If you are a druid, perhaps you were recognizing the Autumn Equinox? K-pop superstars Blackpink were celebrating their first UK number one.

For my part I was trying to divine the thinking behind Liz Truss and Kwasi Kwarteng’s freshly-delivered fiscal plans.

Mini Budget Day! Only a couple of months ago, but already it feels like a fevered dream. Indeed when I reread my report on what I then called the ‘Push-Me-Pull-You’ budget, I see I illustrated it with a strange two-headed beast.

That image appears only more appropriate with hindsight. Because the Mini Budget put UK capital markets into Nightmare Mode.

Investors took fright as the cavalier direction of British politics since 2016 reached its financial apogee. Any merits – and there were some – to the focus on economic growth were entirely overshadowed by our latest leaders making plain their disdain for convention and restraint.

Gilts fell, as did the pound. Pension funds caught offside liquidated holdings. Assets went into a tailspin. There were fears of a Death Spiral. A fire sale of Britain’s fiscal silverware that would force still more selling, metastasizing the crisis until it even threatened the banks.

We’d been there once before this century. Nobody wanted another T-shirt.

Fortunately Britain’s biggest bank was having none of it. The Bank of England stepped in to shore up the system – yet it defied the shrieks from certain perma-delusional Brexiteers and warned its support was temporary. The Old Lady was not going to monetize the bill for Basket Case Britain.

But something had to give, and it turned out to be the chancellor – followed by the Prime Minister. In a month Britain had new iterations of both, this time singing from a more conventional hymn sheet.

The Tories were chastened. They would do anything to get off the naughty step.

The markets believed them and the stresses in the system melted away.

How the bodies were buried

Given all the high drama – and the uncomfortable optics of bond vigilantes and arguably even the Bank of England governor forcing political change – what is most remarkable just ten weeks later is how much the damage has been repaired. At least from the perspective of the City of London.

Look at the bond markets and you’d never know it happened. The pound is up a lot. Market trading is orderly. And if any big beasts were fatally wounded by the ructions then we’ve yet to find out.

It’s a slightly different story for us little guys though – especially those of us with mortgages.

Let’s take a ride through the scenic route to see just how acute the episode was.

Index-linked government bonds, aka index-linked gilts, aka ‘linkers’

When I do my retrospective of the 2020s in eight year’s time (put it in your calendars, Monevator fans) index-linked gilts will be the poster child for the Kwamakazi experience.

I’ve already shared this Tweet from the height of the crisis:

https://twitter.com/Monevator/status/1575034713869553664

It’s still hard to believe that index-linked gilts – supposedly the most staid asset class in a UK investor’s toolbox – fell so precipitously. That’s forced selling for you.

The longest-dated linkers saw the most dramatic declines. That iShares ETF has sported a duration of around 20 for most of 2022 (duration has declined as yields have risen) but there exists an index-linked gilt that won’t mature until 2073. Its duration is nearly 50!

The price decline for that one has been absolutely brutal this year:

Yet in a reminder that things can always get worse in investing, even after its price had fallen by two-thirds in 2022, this linker still almost halved again following the Mini Budget.

Shocking – yet those of you with your glasses on might also notice the price is now back above where it sat on 23 September. The painful event has been erased.

Blink and you missed it

Returning to the iShares ETF tracker INXG, its price is now back to bouncing around just below £15.

Anyone brave enough to buy in the maelstrom might have seen a 35% gain in a matter of weeks. This from one of the world’s supposedly dullest investments, and in an awful year for profitable investing.

Moreover for a heady moment in late September you could buy a 30-year linker with a positive real yield of 2%. That’s like buying a £2,000 annuity for £100,000 – but without giving up your capital!

Me and The Accumulator started exploring index-linked gilt ladders that could create a near-risk-free retirement portfolio with a nailed-on Safe Withdrawal Rate.1 We almost wrote about it.

But then, in a flash, the Bank of England’s interventions worked and real yields on linkers went negative once more. Not as bad as 12 months ago, but you were paying for inflation protection again.

Prices have actually eased a little since then, but nothing like enough to make index-linked gilts screaming buys. Most linkers are back on slightly negative yields to maturity. The asset is once more just an expensive but uniquely diversifying component to add to a well-rounded portfolio.

We’ve written quite a bit recently about how and why bonds have moved if you need more.

Conventional gilts

I have never fielded so many questions and opinions from friends and Monevator readers about bonds as this year.

Strange in a way, given that the scene was set by the previous ten years. But most people didn’t seem to think about where their almost metronomic bond returns came from as yields fell and prices rose for a decade.

Frogs were boiled and we forgot how weird really low interest rates were. And anyone who did ever wonder whether yields were finally turning was soon slapped in the face by market reality, as bonds relentlessly refused to crash.

But 2022 has changed all that. From a UK perspective, the Mini Budget crisis was peak Bondageddon.

I know you’re supposed to illustrate this with yields and I will in a moment. But as we’re private investors around here, let’s see how the iShares Core Gilt ETF price has done since June:

Source: Hargreaves Lansdown

For sure it had been falling ahead of that fateful 23 September. But the big lurch down you see – to £9.56 a share, per Hargreaves Lansdown – occurred in the week after Kwarteng spoke.

The price is now back around £11.

The moves have not been as dramatic as for linkers, and on the face of it there’s more value around in the conventional gilt market. Most issues are still priced below par after 2022’s declines, and it’s easy to get a 3% or higher yield to maturity. (Even the iShares ETF will give you that).

Of course, there aren’t supposed to be ‘bargains’ in the super deep gilt market. So if these bonds do look slightly better value than linkers, it may be because they are telling us something about inflation.

On the other hand maybe pension funds have to replenish their index-linked store cupboards and they don’t mind overpaying.

For a moment the Mini Budget made bonds a bargain

Either way, an attractive 4.5% yield on a 10-year gilt was a blink and you missed it Mini Budget moment:

Source: MarketWatch

I have an investing-savvy friend who got interested in bonds for the first time in his life when the yield breached 4%.

My friend has nine years left on a ten-year fixed-rate mortgage deal. From memory, his rate is a little over 2%. Even as he was helping his kids pack for a holiday, my chum was looking to rejig his portfolio to liability-match away some of that mortgage risk and profit from the 2% differential.

But he snoozed and he – ahem – loozed.

(Probably not in practice, as my friend bunged the earmarked money back into a hedged global tracker in the end, which is likely to do far better over nine years. But it will be a very different ride.)

Bonds still look more attractive than they have for years. However that’s a low bar. On these yields they are fine assets for diversification, but I wouldn’t go overboard, personally, and would favour a good slug of cash in the mix.

Mortgage madness

Discussion of bonds and yields moves us naturally on to mortgages. And here the damage inflicted by the Mini Budget has yet to be entirely ameliorated.

Sure, mortgages don’t move in lockstep with bond yields. They are more determined by so-called ‘swap’ rates.

Swaps are basically ways in which financial institutions transform and trade different kinds of interest rate risk to suit their needs.

Swap rates are mostly determined by the yield curve, as are bond yields, so it’s all relevant. (Some people will tell you it’s all the same thing – ‘interest rates’ – but I prefer to think of a kind of Platonic yield curve that all these variables are oscillating around. But we’re getting into the weeds…)

Banks consider more than the prevailing swap rates when pricing their mortgages. They also take into account how risky they feel the lending landscape is, and how much business they want to do.

And during the Mini Budget mayhem, they pretty much decided ‘sod all’ was the appropriate level.

Fixed-rate mortgages skyrocketed as swap rates spiked. Hundreds of mortgage products were pulled.

The following graphic shows how mortgage rates were slow to follow swap rates back down. (It will be particularly interesting to the finance wonk reader who even now is furiously typing a comment in response to my earlier broad-brush descriptions. You see? Swap rates aren’t actually everything):

Source: Reuters

Rates up, prices down: for bonds and maybe houses too

The good news is fixed mortgages rates have declined further in the month since that graphic was created.

Just last week the rate on a five-year fix fell below 6% for the first time since October.

The bad news is these rates are still much higher than before 23 September. Not only has that caused lots of people to lock into higher mortgages than they otherwise would have, it’s also dinged the housing market.

This shouldn’t be surprising given the hit to affordability of going from 2% to 6% on today’s huge mortgages. (Although it does seem to come as a surprise to many Boomers still dining out on their far higher rates – but much lower balances – of 30 years ago.)

I wonder if doing the sums on higher rates will have a lasting affect on home buyers, even if rates continue to decline. Perhaps they have looked into the abyss of potentially needing to sell a kidney to meet their mortgage payments and pulled back?

Lower mortgage rates would still be welcome, even if it’s too late to prevent a hit to house prices. Consumer spending will need all the help it can get in 2023.

The Pound

Much was made in the midst of the Mini Budget brouhaha of the decline in the value of Sterling. Hardly surprising, given the exchange rate almost touched $1.03 on the following Monday.

However it always takes two to tango with exchange rates – since they must be quoted in pairs.

Sure, some of the decline in the pound reflected international capital calling time on Britain’s political antics. But a fair bit of it was dollar strength.

Here’s how the pound has fared against the dollar and the Euro over the past six months:

Source: Google Finance

You can see a late September swoon against both the Euro (yellow) and the dollar (blue). But the move against the greenback is swoonier. Other things were going on at the time that made the US dollar even more attractive.

You’ll also note the pound is now back above pre-Mini Budget levels against both currencies.

Tomorrow I’ll wake up in the shower and realize it was all a dream.

The Mini Budget and pensions

Other lingering impacts? What about pensions and all that Liability Driven Investing (LDI) business?

Some experts reckon there has been a long-term hit to the funding of some pension schemes from their forced selling in September.

Professor Iain Clacher told MPs last week there was “probably £500bn missing somewhere” :

“This is not a paper loss, this is a real loss, because pension funds were selling assets to meet their collateral calls.

What we’ve actually seen is a significant reduction in the overall pot of assets that are available to pension funds to pay pensions in the fullness of time.”

That seems to make sense. It’s also plausible that nobody has made much fuss about it, because scant few of us really understand pension funding and many schemes were in deficit for years anyway.

Pension schemes affected by LDI might well want to avoid spooking their members – and regulators – unless and until they have to. (Higher yields in 2022 had previously improved the funding picture, which will help.)

But a potential portent of real damage came just yesterday. According to the Financial Times:

Lloyds Banking Group’s pension scheme sold billions of pounds of assets to meet collateral calls during September’s market crisis, one of the biggest known sell-offs by a corporate plan.

Details of the scale of asset disposals were revealed in a submission made to the work and pensions select committee by the partner of the head of Lloyds’ £52bn retirement scheme.

In evidence to MPs, Henry Tapper, founder of AgeWage, which provides pension market analysis, said he lived with the chief executive of a large defined benefit plan […]

“Much of the money posted as collateral won’t be seen again, the assets of the scheme are depleted and much money has been spent in the liquidation process,” wrote Tapper. “I understand the scale of the collateral call ran into billions of pounds.”

Tapper’s partner, Stella Eastwood, is reportedly head of pensions at Lloyds. The FT reports that Lloyds’ three defined benefit plans have around 47,000 members.

Waking up from the Mini Budget blues

Sitting here at the start of December, the Mini Budget feels like a nasty disease we got through.

The symptoms have mostly gone away. But it knocked us back and we still don’t feel quite right.

The economy is headed for recession. It was probably going that way anyway. But the rise in borrowing costs has likely nailed it on.

Overall I think Britain dodged a bullet. You can imagine scenarios where the markets weren’t so quickly calmed. Maybe if the Tories hadn’t got their act together with that solid Mr Hunt, or if the Bank of England had dithered.

Nobody likes austerity much – touted as the main political fallout from this strange roundabout trip. Although as things stand austerity is mostly still a future promise, perhaps made more to calm the markets than for a manifesto.

It’s also hard to foresee a risky agenda focused on growth and productivity being tried again anytime soon. A shame because we need both.

But we’ll have to take our lumps if the alternative would have been a lasting meltdown.

1. I say ‘nearly’ risk-free because unlike US TIPS our linkers do not have zero floor in case of deflation. [↩]

Much as we love investing here at Monevator, even we believe saving for an emergency fund comes first. Building a cash stash to bubble wrap you against life’s bad breaks is probably the most important financial move you can make – after clearing bad debt, of course.

Stuff happens, as they say in polite company, and that’s the starting point for why you need an emergency fund.

Why you must have an emergency fund

When you’ve got a job and good health and your income exceeds your outgoings, setting cash aside might not even occur to you. But without savings, you’re walking a tightrope – and the smallest shove can send you into the abyss.

You might not be hit by one of the life-changing shocks that kicks people on to the streets. But there are plenty of smaller things that can go wrong:

• Your income may drop unexpectedly, and no longer cover your essential expenses.
  

• A member of your family could get ill, and you want to hurry forward treatment.
  

• Something might blow up – from the archetypal boiler to a car engine.
  

• The roof could literally fall in.
  

• A far-flung relative could get married or get cancer. Either way you might want to fly out to be with them.
  

• Your investment platform could go bust, leaving you in need some other source of cash to live on while the administrators clean up the mess.
  

A sudden divorce, job loss, illness, or a lurch into debt can push any of us into a downward spiral.  But having a good emergency fund on standby helps ensure that you never enter that parallel universe. 

At the very least, you’ll feel better just knowing your rainy day savings are there. 

How much emergency fund should I have?

Save at least three to six months’ income.

Having this amount on hand is a good starting point. It’s not a magic number but a balance of considerations.

Obviously, there’s no limit on how much you could save for a rainy day. You could argue that a plumper cash cushion is best. Indeed, why not save to cover one year or even two?

By all means tailor your fund to match your circumstances. But be realistic about how quickly you can save your disaster-dodging dollop.

Aim to save too much, and spare cash won’t be going where it might do you more good long-term. (Think paying off a mortgage, or investing in higher growth assets.)

Cut your cloth

It’s better to think about your emergency fund in terms of your monthly after-tax income rather than an arbitrary and set amount of cash. 

A £10,000 emergency fund is obviously superior to having £1,000 in emergency savings, but it’s your monthly burn rate that counts. If the bare essentials cost your family £5,000 a month then even a £10,000 emergency fund won’t last long. 

So first, think about how much money you’d need to pay the bills for a month if you cut back on all the non-essentials you can live without in a crisis. 

A budget planner can really help with this step. 

Now imagine you’re out of work for several months because of unemployment during a deep recession, or due to an unfortunate illness. 

Six months’ income (after tax) should get you through that kind of scrape unless you’re really unlucky. 

In theory, six months’ worth of net income in your emergency fund will last longer than six months on an emergency budget. That’s because your income normally pays for life’s little luxuries, too. 

But that extra wiggle room may be a lifesaver if you things go from bad to worse.

Say, for example, your car conks out just before a big job interview. With enough in your emergency fund, you’ll be able to afford an immediate replacement in the nick of time.

If money is very tight, then save three months’ worth of essential expenses (as opposed to net income). That is the bare minimum you should aim to hold in your emergency fund. 

Where to keep your emergency fund (UK)

Keep your savings in instant access cash.

Do not be tempted to invest your emergency fund, seeking a better return. 

There’s absolutely no point running the risk that your emergency savings are halved in value – just when you need them most – by a stock market slump.  

Remember that stock market falls are correlated with recessions. 

Covering a period of unemployment is a prime use-case for an emergency fund. That’s more likely to happen when the economy as a whole is in recession – also usually the worst time to be in equities. 

So limit your ambitions for your emergency money to earning the best interest rate you can from an instant access account. 

The Best Bank Account comparison tables will put you on the right track. Choose from current accounts, instant access savings, and ISA accounts.

Make sure your cash is held in institutions (ideally more than one) covered by the Financial Services Compensation Scheme (FSCS). 

Another good tip is to keep your emergency fund separate from other savings. 

Ideally, your rainy day savings should be in a different account to any money you’re putting towards a car, a holiday, or a pet parrot.

If you’re very disciplined you could keep it all together and vow that the first £10,000 (say) is untouchable. 

But in practice few of us are saints. So unless you’re expecting to get your halo in the post, put your emergency money elsewhere.

When to use your emergency fund

Spotted a delightful new fridge freezer that you simply must have when out shopping? Come across a bargain holiday?

Those are not emergencies.

Some people are unused to having cash savings. As soon as they’ve saved any money they’re tempted to spend it. It’s even harder if your partner has a different mindset to you.

Decide what is — or what isn’t — an emergency at the outset. Then start saving for anything else after you’ve built up your fund.

We offered some suggestions for valid emergencies near the top of this article.

Review your emergency fund regularly

The money you saved when you first graduated from college won’t be sufficient when you’ve got two kids, a spouse, and a house. 

Make sure you review your fund at least annually. Expenses, liabilities, and inflation all creep up at least as fast as salaries rise. Top-up as appropriate.

It goes without saying that should pay back any cash you withdraw ASAP, once the emergency has been dealt with.

Think about insurance for some emergencies 

Don’t mistake emergency savings for financial invincibility.

Big hits to your property, income, or health can dwarf your emergency fund.

The best protection is a mix of cash buffer zone for smaller mishaps, plus insurance that covers you and your family from catastrophic loss to life, limb, and property.

Check out our useful articles on making the best use of insurance. 

Bear in mind that insurance companies can take a while to pay out, or even fail to do so altogether. Another instance in which an emergency fund can be a lifesaver. 

Emergency fund UK: don’t use debt!

A lifestyle that habitually requires you to dip in and out of debt is the type most likely to get derailed by a cash call.

If you bought your kitchen on credit, there’s a strong chance that you’ll try to fend off any unexpected outgoings with your credit card or a personal loan.

But what if your particular emergency is a cut in your income? Increasing debt payments in the face of a falling income is about the worst thing you can do. Short of selling a kidney.

Avoid this at all costs, by saving cash in advance and shunning debt. Even if your salary is secure, increasing debt payments will leave you more vulnerable when fate deals you a blow.

Companies go bust due to cashflow struggles. Debt is often the multi-tentacled monster that drags them under. And people are the same.

Get out of debt, then start saving into your emergency fund.

Emergency money gives you confidence

The final reason you should build up your emergency cash reserves is because it will give you the security to (separately!) invest in the stock market – and ultimately enable you to meet unexpected expenses without liquidating your equities when they’re down. 

With a sufficiently big emergency fund in place, you’ll find it easier to develop the lofty disdain necessary for long-term investing.

Marie Antoinette offering cake from within her palace walls when the rioters are at the gates should be your role model when investing. Not Corporal Jones in the BBC classic Dad’s Army, panicking at the first hint of trouble. 

Cash on hand gives you that security. With an emergency fund saved to cover your unforeseen expenses, you needn’t worry when the market wobbles. 

Start with an emergency fund

Need one last nudge to build up an emergency fund? Here you go: it gives you the bug to save and invest much more.

That’s certainly what happened to me.

And I’m confident that if you’re a saving virgin, you too will get a buzz from seeing your net worth steadily going up instead of down.

Before you know it you’ll be wondering how to start investing!

What caught my eye this week.

Just in case anyone was wondering why the price of Bitcoin bounced so sharply off the $15,600 level it hit on Tuesday, I have the answer.

That was the day I sold my Bitcoin.1

Like all degenerate punters most humans, I couldn’t help taking the subsequent bounce a little personally. Even though – equally ridiculously – I also expected as much.

Here’s a snippet of my chat from the morning that I sold:

As you can see, I bring exactly the appropriate level of decorum to my dealings in cryptocurrency.

Though for what it’s worth, this brief salvo neatly summarizes my thinking with Bitcoin.

A bit of what you fancy

I’ve had several messages recently from readers pleased to see the blow-up of crypto exchange FTX, and the stories I’ve been linking to about it in Weekend Reading.

However I’ve had to remind them that (unlike my ever-sensible co-blogger The Accumulator) I’ve not been averse to owning a bit of Bitcoin myself.

A few years ago in fact I made it my ambition to own one Bitcoin. Partly because I was interested in the technology. But also, frankly, to make the FOMO go away. (Or at least to rid myself of the hassle of having to think about whether and when to own it, which had been nagging away since at least 2017.)

I also saw diversification benefits to a small – 1% to 3% – exposure to Bitcoin, writing on Monevator:

I’d say less is more. To match [the market cap] of gold, for instance, there’s still room for a 1% position to grow into a 10% position – or to be trimmed en-route – while not doing too much damage if it bombs.

As things turned out I got to experience both. My Bitcoin sky-rocketed, and then it bombed.

A bit of all right

I first got my Bitcoin holding up to my one coin target during the Covid crash. Over the next 18 months the price went (warning, technical term ahoy) bonkers.

It was something like a nine-bagger at the peak and what I should have done was rebalance. But there were two confounding factors.

First, tax. You can’t yet tax-shelter Bitcoin in the UK. I was sitting on something like a £50,000 capital gain. Worse, I’d already racked up big taxable gains on finally selling down my legacy unsheltered tech holdings. So I sat on my Bitcoin, despite it moving far outside of my target allocation.

Secondly, a fuzzy factor. I wanted to continue to hold one Bitcoin simply because I had come to enjoy owning one of the fabled 21 million that there would ever be.

Obviously that looks even dumber right now than reason one. But there you go.

A bit on the side

On that note, over the past few months – and especially following the FTX implosion – I’ve seen numerous commentators saying “I told you so” and even doing victory laps as prices have slid.

In some cases this is fully merited. Bitcoin and cryptocurrency have not been short of skeptics.

In other cases, however, my elephantine memory reminds me that these people actually did plenty of articles or podcasts promoting crypto, dove into NFTs, or even launched crypto stuff themselves.

Fair enough. The space has been ever-interesting, if nothing else, and whatever crypto’s actual merits or otherwise, people did invest tens of billions and even make millions for a while. Just don’t pretend you never said a peep afterwards. A little intellectual honesty wouldn’t go amiss.

For my part, I mostly remain what the community calls a ‘Bitcoin maximalist’. Which means that in as much as a use case for any cryptocurrency has been demonstrated (debatable), I judge Bitcoin to be sufficient.

As I wrote in the comments to my article:

I wouldn’t hold your breathe waiting for an alternative coin on the grounds it will be ‘better’.

There are probably already better coins out there among the hundreds of candidates.

Bitcoin is valuable because people think it’s valuable and so they own/use it. And the more people use it, the more valuable it gets.

This is not a trivial point. It’s a deep, deep point, although hardly revolutionary. It underwrites the investment case in my view.

To be clear, as I said back then I don’t think you ‘need’ Bitcoin, either.

I don’t believe it goes to the moon and makes all other currencies or assets worthless or any of that baloney.

As I said only this morning to a smart friend who thinks it’s eventually a zero – maybe so.

A little bit crazy

Is this all unsatisfying, vague, non-committal?

Good, then at least it’s accurate.

Because for all the thrills and spills, the Bitcoin story seems to me as uncertain as ever. And I’m as wary of its zealots as much as its sworn enemies.

This doesn’t trouble me. As an active investor, I put money into all kinds of start-ups and growth stocks that could be game-changers or failures. I see Bitcoin just the same.

Of course, the wider crypto space clearly went bonkers in 2020 and 2021. At the least rampant booster-ism, and at the worst fraud. In retrospect – pretty much at the time, to be honest – clearly a bubble. It was one thing to see kids going crazy on Twitter, but even insiders who typically act as gatekeepers to new technology, such as VCs, also seemed to lose the plot, either cynically or because they genuinely were swept up in the mania.

I have a friend who switched their career to live in this world, and I’ve seen the excitement close-up. To me it seemed mostly like an almighty brainstorming session, rather than a sector generating genuinely impactful innovation. Yet with billions flying around just the same.

I’m happy I dodged 99% of that and if you did too then pat yourself on the back.

For few months in 2021 every other Tweet or blog post was about an NFT, a new coin, or another billion ploughed in by the VCs. You can see why people got carried away. As with the meme stock frenzy, there but for the grace of God…

A bit part in your life

Some of you will be fuming by now, as always happens when anyone writes about crypto.

Did I miss the memo about all the fraud and corporate collapses happening all over the place?

No, but what you’re describing is companies failing. And people, too. Not Bitcoin failing.

Bitcoin’s blockchain hasn’t been hacked. The system of mining coins hasn’t been comprised. Like it or hate it, if anything the collapse of centralized exchanges makes the case for Bitcoin stronger.

I’m a pragmatist. There is something revolutionary about being able to create a unique instance of a digital token and to transfer it – without double-counting, or counter-party risk – to someone else.

That one simple thing could yet be used to underpin various forms of digital infrastructure, from financial settlement and title deeds to NFTs.

Or Bitcoin could be digital gold. (Personally, I see almost no chance of Bitcoin ever replacing Visa and Mastercard or similar for everyday payments.)

Or, of course it could well end up as a digital relic that kicks around for $10 a Bitcoin, with occasional and unremarked upon booms and busts.

The spectrum of potential outcomes is probably still interesting enough for me to want to rebuild my Bitcoin position. Not until after the 30-day capital gains tax window has passed, of course.

But I’m in no rush. I’d rather buy something like Bitcoin – where there is probably no intrinsic value, just like with gold – when prices are rising, not falling.

Anyway all this is definitely not investment advice, even more so than usual. Nobody needs to touch crypto with a bargepole! This is just an update for those who wanted it, and digital toilet paper for everyone else.

Have a great weekend all.

From Monevator

Is now a good time to invest? – Monevator

Why the personal savings allowance is suddenly important again – Monevator

From the archive-ator: Do you run a tight ship or are you just a tightwad? – Monevator

News

Note: Some links are Google search results – in PC/desktop view click through to read the article. Try privacy/incognito mode to avoid cookies. Consider subscribing to sites you visit a lot.

UK economy to be worst hit of all G7 nations, says OECD – Sky News

The restaurants shrinking their menus to survive the cost-of-living crisis – BBC

Demand for rental property up 23% in a year, as rents hit record high – Guardian

Businesses and unions demand scrapping of planned bonfire of EU rules… [Search result] – FT

…and Brits start to think again about Brexit as recession bites – CNBC

Bank of England deputy governor hints at rate cuts if conditions change – This Is Money

Autumn Budget 2022: what was in the small print? – Which

Government inheritance tax receipts rise ahead of new freeze – This Is Money

More than 100 people arrested in UK’s biggest fraud investigation – Guardian

What matters to investors is not what should matter to investors – Klement on Investing

Products and services

Should you rent out your car with Turo, Hiyacar, or Karshare to earn extra cash? – Which

Average five-year mortgage rate falls below 6% for first time in nearly two months – This Is Money

Open a SIPP with Interactive Investor and pay no SIPP fee for six months. Terms apply – Interactive Investor

Is it time to take the annuities gamble? [Search result] – FT

The problems with Buy Now, Pay Later – Be Clever With Your Cash

Waterside homes for sale, in pictures – Guardian

Comment and opinion

Achieving long-term financial security is about investing adventurously now [Search result] – FT

The worst [US but same difference…] bond market ever – Morningstar

What next for defensive investors in bonds after a torrid 2022? – Behavioural Investment

So you want to own a football club? [Search result] – FT

How bad could it get for the UK housing market? – The FIRE Shrink

Choice is a precious asset – A Teachable Moment

Tail feathers – Fortunes & Frictions

Nine pensioner perks and benefits to boost your income – Which

Who wants to be a billionaire? – A Wealth of Common Sense

The names have changed, but Jeremy Hunt’s budget is more of the same – The Motley Fool

Actively under-performing mini-special

Most active fund managers underperform most of the time, and other SPIVA findings – TEBI

The failure of active management [Podcast] – Peter Lazaroff

Crypt o’ crypto

Will VCs ever profit from the $41bn they poured into crypto over 18 months? – Institutional Investor

Naughty corner: Active antics

The Hustler: lessons from a young Warren Buffett – Neckar’s Minds and Markets

Investment trusts are on their biggest discounts since the financial crisis – IT Investor

The case for splitting Berkshire Hathaway’s Class A shares – Rational Walk

Are you addicted to investment porn? – The Onveston Letter

Kindle book bargains

The Black Swan: The Impact of the Highly Improbable by Nassim Taleb – £1.99 on Kindle

The Fall of the House of Fifa: How the World of Football Became Corrupt by David Conn – £0.99 on Kindle

How Will You Measure Your Life? by Clayton Christensen – £0.99 on Kindle

Your Next Five Moves: Master the Art of Business Strategy by Patrick Bet-David – £0.99 on Kindle

Environmental factors

Why parents are baffled by eco choices – BBC

Saudi Arabia’s green agenda: renewables at home, oil abroad [Search result] – FT

Off our beat

What does it mean if you’ve never had Covid? – BBC

How a Pomodoro timer app helped me regain my focus – The Verge

Bob Iger has to solve the Disney streaming problem he helped create – Vox

The leaf blower parable [Couple of week’s old, but I hate them too!] – Seth’s Blog

And finally…

“Full-time private investors like the fact that even family and friends don’t quite know what they do for a living.”
– Ian Cassel, Free Capital (forward)

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1. I also dumped the small amount of Ethereum that I had hedging my bets, alongside a few other bits and bobs mostly acquired free from Coinbase for watching educational videos. [↩]