I last wrote in detail about commercial property as an asset class in 2009. In the aftermath of the financial crisis, half-finished towers and moribund building sites dotted London like the LEGO play of a child interrupted.
The towel had been thrown in. I saw an opportunity.
Over the next few years, property investments – stock market-listed Real Estate Investment Trusts (REITs) as well as old-style property investment trusts and funds – did better than anyone expected.
Helped by persistently low interest rates, property assets doubled or even tripled your money over the next few years, thanks to rising prices and generous yields. Skyscrapers soared.
Some property shares lagged the recovery, giving a chance to buy again in 2011 – especially as the recovery was slower to reach small cap property firms
However certain parts of the sector are now well down from those highs.
Industrial property companies are doing well thanks to the weak pound juicing manufacturing, and there’s a boom in the warehouses that support online shopping and other logistical operations.
But companies that own lot of office space in London trade at big discounts to their net asset value – due mostly, I think, to the ongoing Brexit fiasco.
The market also seems wary of second-tier retail exposure. That’s understandable in light of the many store and restaurant closures we’ve seen since we voted to shoot ourselves in the foot in 2016.
Bailing on Brexit
Long-time readers will know I think Brexit is our biggest unforced error since the Hundred Years War.
However everything has its price.
If I can buy prime London office space at 70p in the pound via the stock market, I have a good margin of safety. If property developers have curbed speculative ventures because they fear bankers will decamp to Frankfurt and start-ups to Lisbon, at least new supply will be limited. That should help the incumbents.
Also, I don’t think we’ve condemned ourselves to penury with Brexit. I just believe we’ll be poorer than we would have been, for the foreseeable decades to come, for little gain. (That’s bad enough!)
Jeremy Corbyn notwithstanding, the rich will still get richer, and London will remain the base of operations for most of them.
You can shake your fist from the provinces, but you can’t make an oligarch or a tech entrepreneur move their company to the middle of nowhere. (Movers and shakers are even more aghast at that idea in light of the social divisions revealed by Brexit.)
But before anyone sells their Facebook shares and plows it all into UK real estate, know three things.
Firstly, Monevator is not about share tips. At most, posts like this are just suggestions of areas worth exploring. Do your own research – and on your head be the results.
Secondly, you should know I’ve had this view about commercial property since quite soon after the Brexit vote, when traders dumped UK property faster than Boris Johnson shedding his principles.
As global money began fleeing UK PLC, property funds had to be gated so investors didn’t ask to withdraw money that the funds didn’t have. I thought this was a sign the panic was overdone, and flagged up the potential opportunity.
Since then some companies I mentioned have done okay, but others have fallen further.
Again, do your own research – because you will have to live with the consequences.
This time it’s different
The third thing to note is that back in 2009, property prices really had plunged.
If you wanted to go out and buy a London office following the financial crisis, it was cheaper than a few years before. Same with a new lease, too. Prime property was going cheap.
The falls in property investments on the stock market then reflected this gloomy reality.
That’s the standard cycle in commercial property. Boom years – in which money is easy to find and development rampant – followed by lean years where over-extended developers go bust.
Sell when the fat blokes in suits and hard hats in the business pages look smug and contented, that’s my rule of thumb. Consider buying when those CEOs have been shuffled away for wiry upstarts who appear in the same pages talking up the forgotten sector again.
This time – so far – it’s different.
London office space is holding its value, and rents remain high, too. Brexit fear has not yet dinged the hard bricks and mortar assets themselves, just their stock market proxies.
Those discounts to net asset value we see with certain REITs may reflect an irrational disconnect with reality on the ground. Perhaps some of the beefy property blokes will be proved right to be more confident about Brexit than the flighty liberal elite fund managers selling down REITs?
Alternatively – more technically – it may be that hedge funds and the like who are very pessimistic about Brexit have turned to shorting the shares of listed property giants as an easy way to express that view. (The funds are unlikely to own physical offices to dump).
Does this make the big London office REITs more of an opportunity this time – because it’s a phony war – or less so – because the usual cycle hasn’t yet played out from peak-to-trough?
It’s something to think about.
Commercial property and your portfolio
In my next post I’ll recap the broader investment case for commercial property, whether you’re an active or a passive investor.
Why do some model portfolios include specific commercial property exposure, and how does the asset class differ from equities and bonds? What if you already own your own home?
The exciting bit is over, but the important stuff is to come. Subscribe to catch it.
Disclosure: I have various beneficial interests related to London property.
Comments on this entry are closed.
You call it a fiasco, I call it rebalancing. 😉 But then I do work for one of those provincial industrial firms! Seriously though, I was interested to hear on a recent Merryn Somerset-Webb podcast that several US financial firms were moving some operations out of Manhattan to places like Tennessee and Colorado, purely because of the ludicrous cost of office space in New York. My own employer is looking to put its swanky central London HQ up for sale, again because of the silly costs associated with it. I wonder if this phenomenon is spreading to other sectors in London?
@Matt — Yes, I’ve seen a few signs of such activity. But again I’d stress that London office prices haven’t actually fallen yet. The stock market seems to be betting they will, hence the discount.
I own first property fpo and they have a mandate to buy London office property from one of there customers, and the payment will be a percentage fee rather than a fixed fee, so along with all the other deals they have ongoing I feel they will do well out of this.
Monevator – your political views are your right of course but I don’t really want to read about them. Unsubcribed.
@TI. No parallel then so far with domestic accommodation, both rents and sales/sale prices being apparently down across London as a whole. I’m really curious about what the causes are, but the agents I deal with at the moment predictably parrot what they want you to believe as that’s in their best commercial interests, so I don’t know. I’d have thought that if the amateur BTL brigade are selling up, prices would fall and rents would rise, but maybe many trends are happening at the same time, giving a confused picture.
Re: your political views, with our luck BJ will end up president here, he has previous in his glorious stint as London mayor which I had thought couldn’t happen on a spherical planet. (Also his doppelganger on the US throne is an scary omen albeit in a classy shade of orange blush vs our own gammon pasty)
@arj — Fair enough. They seemed to me a pretty mild references — and personally I can’t see how you can assess the ups and downs of London property over the past two years without taking into account Brexit thrusting itself into reality — but I suppose if I had voted for this mendacious shambles I wouldn’t like to be reminded about it, either.
p.s. That said, I might try to avoid losing a few more subscribers by stressing that when I have oligarchs and entrepreneurs describing life outside the South East as “the middle of nowhere”, I am channeling their views.
Personally, I’ve long thought I might move to one of the prettier parts of nowhere at some point in the future; I’m a fan. I suppose Brexit has made that both more likely (by making living in Europe less straightforward) and less likely (because these social divisions could well get worse in the years ahead I fear.)
But anyway, no more Brexit comment from me on this thread. I felt I’d reply to @arj, but unless it’s with direct relation to commercial property we shouldn’t really stray.
@FI Warrior — I got to know a couple of agents pretty well in my flat hunt, and the BTL market around where I have bought has just cratered. From memory, at least with flats they said they went from 3 out of 4 purchasers (or more) going to landlords to less than one in four. They fingered the tax changes as the cause.
@ The Investor.
Why not actually write an article explaining why you think the EU is so good? As it is you make childish comments about Brexit and then get upset when people disagree with you.
Bremainers seem awesome at petty insults but seem incapable of actually presenting arguments for staying in the EU…. That’s why you lost….
@TI Looking forward to your next post. I’ve resisted any significant property in my portfolio since selling a BTL a few years back precisely because, with owning a home, I felt I already had enough exposure to property. However, I find myself wondering whether I’m comparing apples and oranges when it comes to commercial property versus a private home, the latter fundamentally being either an inter-generational asset or a reserve for long-term care in my dotage!
@Gordon — I’m not upset s/he disagreed with me. I said “fair enough.”
@TI For what it’s worth I agree on the importance of doing one’s own research. Failing to crtitically consider the impact of political decisions such as Brexit would surely result in cognitive bias in investing decisions and that is a recipe for disaster.
@all — I’m now deleting Remain/Leave comments that have nothing much to do with commercial property on this thread. Cheers!
@TI. The interesting question now is what will the amateur BTL army (who mostly just wanted a secure pension because they had no faith in the system, vs being greedy) invest in, in their quest for security? In the past you could trust the state (final salary pensions, a viable NHS for all, more-or-less good schooling for all) and even the financial institutions (private investment, building societies or insurance companies, even banks) in living memory. Nowadays, in the hunt for even an inflationary hedge to preserve savings, people need the finance savvy that used to be the preserve of professionals. Deregulation has made it a free-for-all and integrity generally in society is seen as quaint and as dated as common courtesy; the new alternatives always seem to escalate risk, like P2P, while the old asset classes do the same. It feels like you always have to run faster to stay in the same place; no surprise really when the planet’s population is still exploding, of course our slice is shrinking, overpopulation literally = inflation very personally now.
I don’t think you can consider these issues without considering Brexit, so I hope you’ll forgive this comment, which isn’t intended as partisan, nor aimed at stirring up Brexit debates.
My sense is that there is a significant proportion of investors who fit into what we might call the “liberal elite”, and who are so utterly appalled by Brexit that it is clouding their collective judgement. Even our dear investor fell victim to a brief bout of this, though overcame it more quickly than most.
It seems to me that the relative valuations of UK equities vs other regions are signalling that a much worse outcome is expected than I think is likely to actually materialise. As a result, during the recent dip, I’ve ended up increasing my UK percentage more than I would otherwise have done. I’m no expert on commercial property, but I wouldn’t be surprised of some of the same factors were at play.
As to BTL, it doesn’t take more than a superficial look at current yields and the tax changes (still only part way through being implemented) to make it clear that a highly leveraged BTL, as was common in the past, would be a surefire way of draining funds from your portfolio (whilst subsidising the state and your tenants). Absolutely inevitable that new BTLs are drying up. If the properties are instead being bought by first time buyers, would this be a rare instance of policy makers actually effecting the result that they intended?
I’ve recently dropped commercial property from my passive SIPP portfolio, not only because I became convinced that I was exposed to enough of it through holding global equities anyway, but also because I found it difficult to find a suitable low-cost passive fund to replicate a truly global perspective.
Investing in REITs at this time, and particularly London commercial property REITs, seems to me to be too much of an attempt to time the market, and specifically a certain sector of that market.
That sort of judgement call isn’t for me.
I have noted the no more Brexit comments but in support of this helpful website, they were just mildly negative and, moreover, relevant. (Nothing like the heated exchange of views you see by readers of online newspapers sites!) It’s perfectly legitimate to refer to Brexit because the uncertainties and fact of it are directly relevant to future investing returns. Particularly those sectors/stocks more likely to be impacted (positively or negatively). Wasn’t it recently reported that overseas fund managers are shunning the UK as they’re negative on it versus other markets. Similarly the reference to Mr Corbyn. Like or loathe him, Utilities’ share prices for example are depressed due to fears about privatisation without due shareholder compensation. Overall though, like another post (16), I’m for the global tracker route, the Lars Kroijer approach. Which is doubly useful if you believe the various forecasts of a negative impact to the UK economy.
Maybe the 70p is right and the 100p book value is wrong.
It wasn’t so long ago that Tesco took a big red pen to its book values.
Indeed.
What we are told is that it’s very difficult to outperform the market. The market says the 70p is the correct valuation, so why would we think we have an ‘edge’ that would enable us to suggest otherwise? What is that we think we know that the whole of the market doesn’t yet know?
Not only is this a judgement call on a specific sector in the market (property), but a specific sub-sector (commercial property), in a specific region (Developed Europe), in a specific country (the UK), and a specific city within that country (London).
@A beta investor — I think it depends on the REIT in question as to how reliable book values are, but in general with very big established commercial property companies that now have very little speculative development, I think they’re a close guide.
That doesn’t mean they can’t go down — they will if/when actual valuations in the market for offices sold and whatnot go do down — and if there’s a sharp downturn between them reporting NAVs then investors can get a shock.
But so far that hasn’t happened here; the discounts started emerging in the run-up to the vote and accelerated afterwards, but prices have held pretty much flat.
It’s different when you get into speculative developments, both because it’s much more finger in the air guesswork, but also because different companies can treat how the account for such projects in different (some might say creative) ways.
@Tony — To be fair to those I annoyed, I think my language was more colourful than purely analytical reasoning. The tricky thing is a writer/publisher you have to create articles people will actually read, and people don’t read bland texts. (On the contrary I’m often urged to put *more* of my life, opinions, and personality into the blogger, since this is apparently what blogs are about.)
Anyway I have conceded that so nobody else has to and we don’t get derailed back into Brexit please. 🙂
Is central london office space really going to continue to be in demand? Jobs are being off-shored , outsourced, and automated these days, retail is getting amazon’d and there will probably be an increase in the “work from home” type jobs in the future.
@AncientI I remember those promises 20 years ago in the dotcom boom of us all working from the beach, from home, from anywhere 😉 With you on the automated and amazoned, but I don’t think the WFH dog will ever have its day.
More generally, I guess the worth of the REIT depends what sort of office space these guys are building. I rather like TI’s off-piste articles, we all know the company line on passive investing. Perhaps there could be a tag or disclaimer at the top of such posts – this is not a passive investing post, readers distressed by such iconoclasm need read no more, to save the distress that it’s not a ‘buy VWRL every month and hold forever’ story. TI’s developing the case that the market is mispricing this particular asset, I’m happy to open the popcorn and enjoy the yarn.
A very apt summary. As 31 year old it does sometimes feel like the odds are slightly stacked against me sometimes, especially when I look at my older colleagues who already to retire on their huge final salary pensions at 55, whilst I and other young(ish) colleagues are on defined contribution schemes which are significantly poorer. They are looking to liquidate property they bought as buy to let for massive gains the likes of which we will never see (10 fold). Property prices are expensive, as is fuel, as are many of the modern trappings of life.
The only way around this is to cut back on luxuries you know you can afford to save for the future in quite inventive ways – P2P finance, Lifetime ISA’s , salary sacrifice share purchase schemes, tax efficient pension savings and investments. It all does feel a bit much sometimes, especially when the generation who are retiring at work just saved into a standard pension at no hardship which is now worth half a million pounds, and bought a small terraced house to sell at a ten fold increase in value before retirement. But such is life, and this blog help us in our quest to stay ahead of the curve.
@ermine:
Thanks for your continuing encouragement of this kind of thing, we’ve had a good time of it over the years, eh? 😉
However I am not actually going to be going any further into specifics about the sector, let alone the company. For various reasons I made a decision a while ago not to talk about specific stocks any more on Monevator. For one thing it is way off-piste for the general readership of the site these days, and possibly counter-productive.
Sadly that’s where my passion is so it does make it harder for me to write articles. Luckily @TA should be back on the scene by the end of Summer at the latest.
Bottom line: I hope to continue throwing the odd general idea up as above for people to look further for themselves, but that’s about it as things stand. Sorry to disappoint! 🙁
@AncientI
I work in IT desperately trying to automate away as many jobs as I possibly can. No matter how hard I try, over the past 25 years, more and more offices have popped up in London and more and more people are working here. Like London property as a whole, just when you think the prices are ridiculous, they rise again.
Working from home is a dream most employers would consider a nightmare. Even in IT I find employers are not capable of letteing me out of their sight for more than a few hours at a time.
I also sold out of my REIT recently. Four reasons:
(i) mainly, although recognising they’re somewhat different things, I already have a good percentage of my portfolio in property. Yes, “your home is not an asset” blah blah blah, but it yields about £1200 pcm after costs (mortgage, council tax, various odds and sods) compared to renting;
(ii) I had 3% or so hidden in other parts of my portfolio anyway;
(iii) selling simplified my portfolio (though I went and bought an EM Small Cap tracker with some of the proceeds. Too much fiddling. Ho-hum.)
(iv) my thinking was that QE has inflated house prices, why not commercial property prices? If QE has inflated share prices, why not REIT prices? So given the inevitable reversal in QE, would commercial property suffer a double whammy?
And after, I came across this:
http://www.etf.com/sections/index-investor-corner/swedroe-real-estate-isnt-special
It was only 5% of my portfolio anyway, so not critical.
Oh, one final thing.
I work for a major govt. dept. in IT. They’ve moved almost all their IT out of central London and are sharing their London HQ with two other govt. departments. And we’re encouraged very much to work from home. It’ll take a while, but cost pressures will only increase the trend.
I can’t see the gravitational field that is London weakening any time soon. There are just too many decision makers who want to be near each other for things to really spread out.
I was involved in the set up of a Government Agency (a Non Departmental Public Body – NDPB – for the interested) which was taking over work previously done by civil servants based in London. The new body was established in the South-East but outside London. As it was being born, the civil servants involved just evaporated. Only two transferred to the new organisation, and one of those was on his last appointment before retiring and the direction from London meant an easier commute. The rest could not risk being away from the centre of things. Too much career risk in not being noticed.
And in several years with that organisation I spent more time in London than I did at the notional head office, ‘cos that’s where the action was.
I did succeed in the working from home thing for 18 years, but when I travelled for work it was mostly London.
Agreed it doesn’t make sense, but this is all about emotion. I would hate to live in London (although born and bred there), but the business buzz and innovation is powerful. Stupid levels of concentration occur elsewhere of course – Manhattan and SF/Silicon Valley being obvious answers. We are a clustering and huddling species it seems.
@Dan
> bought a small terraced house to sell at a ten fold increase in value before retirement
if it makes you feel any better I bought a small terraced house a generation and a half ago. I got to sell it for about 2/3 of the price ten years later. Three million people were in negative equity in the early 1990s. The WWW started in ~1994 which is why this never happened if you just search the web. I do take your point on some of the other issues. Though on the upside for you, your generation will probably live a lot longer than my generation.
@TI >However I am not actually going to be going any further into specifics about the sector, let alone the company.
That’s a shame, I was looking forward to part 2 that seemed to be trailed. What the heck do I do with the second half of the popcorn, and more usefully, any way of pushing back on the choice not to boldly go into some of the stranger parts of the investing universe? I for one enjoyed them and would like to know more here.
Again more generally, commercial property ≠ residential property. Even I managed to get that the last time round this came up on here from TI’s instruction, and I hate residential property with a vengeance from bitter experience so am always jumpy on any asset class with ‘property’ in the name.
I note the mixed comments here about working remotely. Before I worked remotely I couldn’t imagine it would be a success – however since the start of this year I’ve done it roughly once a fortnight.
I find I’m far more productive that day than I would have been, and because I’m at home and can run things through the washing machine / hang them out etc makes for a far more satisfying weekend as well which leads to greater productivity the following week. I usually do about an hour longer than I’m contracted all told, albeit in different stints during the day. I still win because of the shaving / ironing / commuting involved in getting to an office.
I think employers will probably move more and more toward remote working as more people try it… and that will have a considerable knock on to office rents/ tfl passenger numbers etc. Over the long term I feel this will have far greater effect that brexit / Corbyn government / the next recession… if we all find ourselves working from home once a week that’s 20pc less office space 😉
As for BTL… my friends with BTL’s seem to think selling ( or not buying) depending on their situation is the best thing although when you dig a bit deeper this seems to just be what they’ve picked up from the papers. My greatest concern with a BTL would be paying an extra 3pc stamp duty every time you move your OWN home… need a lot of profit off a 250k BTL to pay an extra 20k stamp duty every five/ six years…
Hi TI, first time commenter here, just thought I would second Ermine’s opinion and ask you to reconsider your decision to stop talking about individual stocks on Monevator. These are some of my favourite posts in the archives of the site. As he said, 99.99% of FI blogs these days talk about passive investing. We get it. Debates about individual stocks can be just as, if not more, interesting. Nothing wrong with dabbling in individual stocks from time to time, and even if the majority of your audience doesn’t, you put your thoughts into eloquent posts that really make us think, and learn. And I say that as someone who invests for a living. My 2 cents.
Hi there
First time poster, long term fan! Someone on here suggested there is not a decent passive way to invest in property. But, thanks to Mr Monevator, I have found a passive fund with an on-going charge of 0.20%.
https://www.blackrock.com/uk/individual/products/269678/ishares-global-property-secs-eq-index-fund-(uk)-class-h-acc
I have to confess ever since I bought into it in August it hasn’t fared well. Its only 7.21% of my portfolio and less in the coming months as I add to my L&G International Index tracker. I don’t mind that much because I want to keep property as 5% of my portfolio and no more. And I heard somewhere if you don’t like something in your portfolio then you’re not really diversified.
On a much broader note, it will be interesting to see what Interest rate rises will do to the property market. I think there was reprieve in May but there might be another rate hike in 2018. Alas I am not a fortune teller so that’s by no means certain. Time will tell.
P.S. Apologies if I have violated the rules about mentioning/recommending a fund. Everyone should do their own due diligence; Caveat Emptor!
“Also, I don’t think we’ve condemned ourselves to penury with Brexit. I just believe we’ll be poorer than we would have been, for the foreseeable decades to come, for little gain. (That’s bad enough!)”
I completely agree with this. The thing is though for me, I was never one to say that we would financially really suffer mid to long term as I just didn’t know how bad it would or could be. But I did think we would be weaker. I was more against it because even though it can be seen like a straw man attack, I think moving more towards nationalism and us versus them is just a bad move long term. I like to think we are moving towards cooperation more so. It won’t happen, but for some of the arguments I hear for Brexit. Why not give back the counties more control (Staffordshire breaks away from England etc). My village should be completely independent soon… evil centralised control.
Chris
Interesting article. Real estate companies are increasingly valued on an income-yield basis (EBITDA/FFO/dividend) basis rather than as a prem/disc to NAV.
Landsec recently took a large £640m hit to NAV in redemption costs on their debt. This reduced their cost of debt by 40% and only seems to have been done to boost future earning metrics.
There’s definitely a cosiness between valuers and the company they’re valuing for (who wants to disappoint their client?) That makes sense-checking the implied property yields, ideally disclosed with a lot of granularity, very important.
Most companies are reporting disposals 2-5% ahead of book value. This is ostensibly to redeploy the capital in higher yielding developments/refurbs. In reality a lot is about trying to prove book value to the market. But this is an obviously biased sample (they won’t sell stock below book value).
If you look post-GFC, rents/occupancy generally held steady. It was the yields that moved out i.e. people were now willing to pay less for a stream of cash that felt less certain. This seems a perfectly rationale response.
As you said, if you think there is a disconnect between book-value yields and market-implied yields you are really talking about a difference in view of the occupational market. That takes you back into the world of macroeconomics, supply/demand, political risk and other such ink-squirting cuttlefish.
Looking forward to the follow up article. Particularly any views on a rising interest rate environment and recent M&A activity.
@RealEstater — Really interesting comment, cheers! Must admit I was (/am) prepared to believe that LAND was also refinancing debt while it was cheap to reduce risk, as per the official line. I judge it and similar to be much more reigned in than say in 2007, in terms of the risk on their balance sheet. I suppose with very small speculative / development exposure now it could make sense to value them in terms of their cashflows rather than NAV. I think the latter would remain the final arbiter for me though; to some extent valuations should be factoring in the former, after all, notwithstanding your interesting comments about selective disposals etc. I’d agree things are nervy; from what I’ve read there don’t seem to be much signs of substantial mispricing due to shenanigans, but then again I’d agree we’re not exactly in a firesale scenario so no forced sellers etc. That’s been the story of British property of all sorts (British companies of all sorts?) for most of the post-2008 era I guess.
The next post is just going to be about commercial property from a very general portfolio perspective (I’m looking to plug a hole in our upcoming book). I am gratified by the requests for me to go deeper into individual shares and will keep in mind, but at the moment I think birds-eye view style non-passive posts are potentially the best compromise. We’ll see!
Hope you’re all enjoying the sun. And/or thunderstorms!
“Apologies if I have violated the rules about mentioning/recommending a fund.”
Don’t worry; the link gave me a 404 error.
More importantly, don’t worry because there are no such rules here. As long as people are being helpful, trying to supply genuinely useful links/information, and aren’t overdoing it, we have no problem with the odd judicious pointer offsite.
That said I got the 404, too. I guess it was a fund version of this (more expensive) ETF:
https://www.ishares.com/uk/individual/en/products/251801/ishares-developed-markets-property-yield-ucits-etf
Other ideas here:
http://monevator.com/low-cost-index-trackers/
I see iShares does a hedged global property ETF. Interesting.
Hi Investor
Thank you. Actually I was looking at iShares Global Property Securities Equity Index Fund. The Class H is the cheapest one.
I found it on Mr Monevator 9 lazy portfolios (http://monevator.com/9-lazy-portfolios-for-uk-passive-investors-2010/)
Please correct the link if it doesn’t work properly. I don’t mean to a d*ck but Mr Monevator, please update the OCF on that page for this product. Because I often refer to it when I think about my asset allocation and despair at my lack of diversification.
But I digress. I have seen a lot of chatter about Peer 2 Peer companies lending for property/real estate so it might be worth talking about. In fact there are several companies that are purely property Peer 2 Peer lenders. But I am reluctant to put too much of my net worth into those companies. Call it cowardice but I am reminded the phrase that seems hackneyed but still has truth in it: only invest what you can afford to lose. (Full disclosure I do have an account with Ratesetter but I have less than £1,000 and let the money roll over every month.)