Good reads from around the Web.
There are many reasons to be terrified of the prospect of Donald Trump as US President, but passive investors might add his random-looking stock portfolio.
According to recent filings required by the US electoral authorities, Trump has a multi-million stock portfolio divided between several brokerages and scattered across dozens of individual holdings.
On the one hand, it looks a mess.
You can’t help thinking Trump would have more time to devote to his TV career, his activities as a mogul, and his Presidential race if he just lobbed the whole lot into a very cheap US tracker fund – even presuming he pays someone to collate and file his tax forms, and so avoids those headaches himself.
But on the other hand, he could have as much as $88 million in his stock portfolio – he doesn’t have to give precise figures – and when you approach such levels of wealth, the cost benefits of trackers do go down a bit compared to holding stocks directly, especially as you can harvest tax losses when you own individual shares.
(I think it’s a safe bet Trump doesn’t hold all his $88 million worth of stocks in the US equivalent of an ISA…)
Also, I have no problem at all with his using multiple broking accounts.
Remember, every investment can fail you – something Trump has learned many times in his real estate career.
This also goes for platforms and so forth, too. So why not build in a little redundancy?
Diversification trumps ego
My biggest problem with Trump’s equity portfolio though isn’t where he’s invested it, or how – it’s the puny size.
Trump claims to be worth $8 billion, and according to a breakdown of his assets the vast majority of this is in real estate. Even $88 million in shares is a drop in that ocean.
And as any Old Money family office apparatchik will tell you, wide diversification is the name of the game when it comes to wealth preservation.
Still, such worries pales into insignificance compared to the thought of The Donald getting his hands on the nukes…
A terrifying new meaning to his catchphrase: “You’re fired!”
p.s. The markets have been through the wringer this week. Who really knows why or how far it will go (I have my own value-less theories of course…) but to some extent I think we’re just paying for the extreme lack of volatility that’s prevailed in the all-important US market for years now. It’s always calmest before the crash. Bottom line: If you’ve got a plan, this is no time to panic. And if you’ve not got a plan, get one pronto!
From the blogs
Making good use of the things that we find…
- Value averaging versus dollar cost averaging – Ben Carlson
- It’s better with Beta – Canadian Couch Potato
- Why actively managed bond funds? [US, relevant] – Oblivious Investor
- Should you own foreign stocks? [Very US-centric] – Rick Ferri
- The investing genius Peter Lynch – Investing Caffeine
- A dozen things learned from David Einhorn – 25iq
- The sustainable active investing framework – Alpha Architect
- Rebuilding the Wall of Worry – Dash of Insight
- The case against hedge fund managers [Research] – via CIO
- Valuing and pricing trophy assets – Musings on Markets
- Thoughts on the 500-point drop in the Dow – The Reformed Broker
- Get rich with your own urban tribe – Mr Money Mustache
- Cherry-picking from the modern world – The Escape Artist
- Tracking and estimating spending – Retirement Investing Today
- In praise of slowness – Farnham Street
Product of the week: Virgin Money has launched what ThisIsMoney reports is the longest-ever interest-free balance transfer credit card – good for a whopping 40 months. There’s a 2.99% transfer fee, and the card will only be available for 20 days.
Mainstream media money
Some links are Google search results – in PC/desktop view these enable you to click through to read the piece without being a paid subscriber of that site.1
- Passive funds are getting nearly all new money [US but relevant] – ETF.com
- Worry only when you think you’ve figured it out – Motley Fool US
- How holding on boosts your chances of a good return – ThisIsMoney
- Roth: Stocks for the long run? Really? [US but relevant] – AARP
- What Morningstar’s favourite stockpickers are buying – Morningstar
- Investors really don’t like emerging markets [See graph five] – WSJ
Other stuff worth reading
- How I built my family’s net worth to $1 million – Business Insider
- Mutual funds are (mostly) getting better [US, relevant] – Morningstar
- The Telegraph launches campaign to axe new BTL taxes – Telegraph
- How to build a savings bond ladder – Telegraph
- Pensions – which way now? [Search result, on future changes] – FT
- London prepares for a flood of bathing oligarchs – Guardian
- Couple who make £75,000 a year from a toll bridge – Guardian
- Confessions of a baby boomer – Guardian
- How Amazon swallowed Seattle [Sounds like London] – Gawker
- …and how Snoopy killed Peanuts – Kotaku
Book of the week: This week Monevator readers have been mostly discussing the limits of capitalism, in response to articles on savings philosophies and being a bohemian investor. I guess we asked for it! If you want more, then PostCapitalism: A Guide to Our Future by Channel 4’s Paul Mason looks an interesting read. I haven’t, but it’s the sort of book I take on holiday and there’s still a bit of summer left. (I know, I know…)
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- Note some articles can only be accessed through the search results if you’re using PC/desktop view (from mobile/tablet view they bring up the firewall/subscription page). To circumvent, switch your mobile browser to use the desktop view. On Chrome for Android: press the menu button followed by “Request Desktop Site”. [↩]