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 [1] 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 [2] – 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 [3]. 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 [4].
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 [5]. Bottom line: If you’ve got a plan, this is no time to panic. And if you’ve not [6] got a plan, get one pronto [7]!
From the blogs
Making good use of the things that we find…
Passive investing
- Value averaging versus dollar cost averaging – Ben Carlson [8]
- It’s better with Beta – Canadian Couch Potato [9]
- Why actively managed bond funds? [US, relevant] – Oblivious Investor [10]
- Should you own foreign stocks? [Very US-centric] – Rick Ferri [11]
Active investing
- The investing genius Peter Lynch – Investing Caffeine [12]
- A dozen things learned from David Einhorn – 25iq [13]
- The sustainable active investing framework – Alpha Architect [14]
- Rebuilding the Wall of Worry – Dash of Insight [15]
- The case against hedge fund managers [Research] – via CIO [16]
- Valuing and pricing trophy assets – Musings on Markets [17]
Other articles
- Thoughts on the 500-point drop in the Dow – The Reformed Broker [18]
- Get rich with your own urban tribe – Mr Money Mustache [19]
- Cherry-picking from the modern world – The Escape Artist [20]
- Tracking and estimating spending – Retirement Investing Today [21]
- In praise of slowness – Farnham Street [22]
Product of the week: Virgin Money [23] has launched what ThisIsMoney [24] 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 [25]
Passive investing
- Passive funds are getting nearly all new money [US but relevant] – ETF.com [26]
Active investing
- Worry only when you think you’ve figured it out – Motley Fool US [27]
- How holding on boosts your chances of a good return – ThisIsMoney [28]
- Roth: Stocks for the long run? Really? [US but relevant] – AARP [29]
- What Morningstar’s favourite stockpickers are buying – Morningstar [30]
- Investors really don’t like emerging markets [See graph five] – WSJ [31]
Other stuff worth reading
- How I built my family’s net worth to $1 million – Business Insider [32]
- Mutual funds are (mostly) getting better [US, relevant] – Morningstar [33]
- The Telegraph launches campaign to axe new BTL taxes – Telegraph [34]
- How to build a savings bond ladder – Telegraph [35]
- Pensions – which way now? [Search result, on future changes] – FT [36]
- London prepares for a flood of bathing oligarchs – Guardian [37]
- Couple who make £75,000 a year from a toll bridge – Guardian [38]
- Confessions of a baby boomer – Guardian [39]
- How Amazon swallowed Seattle [Sounds like London] – Gawker [40]
- …and how Snoopy killed Peanuts – Kotaku [41]
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 [42]
Like these links? Subscribe [43] to get them every week!
- 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”. [↩ [47]]