What caught my eye this week.
I have often been chided for being too negative over the past few years – both in comments on Monevator and elsewhere.
Just last week, regular reader SLG [1] asked:
It might just be that my complainy pants news filter is set too high to assess the state of the nation but are you sure you’re getting a balanced reading breakfast to keep your glass topped half way up @TI?
That was in response to a post where I was indeed being negative about the returns from investing lately – once you excluded the big gains from the so-called ‘Magnificent Seven’ US tech giants.
Well, investing returns – equities and bonds alike – have been mediocre-to-bad since I first got negative in late 2021 [2] and then more so [3]. Especially once you adjust for inflation.
I do understand this is in on top of my multi-year negativity about the rubbish results from Brexit [4], though.
Eeyore stories
Let’s be clear. I wholeheartedly agree there’s plenty of great stuff going on in the world, from new vaccines to the renewable energy cost collapse to the ongoing joys of K-Dramas [5].
But (geo) politically and economically it’s been rough sledding. Better, in some respects, than it might have been, especially when it comes to the US economy. But thin gruel elsewhere at best, and war at worst.
Here are five fairly random graphs I came across just this week that shine light on the gloom.
Graph #1 from: Britain has been reduced to Trabant-status among the West [6]
[7]
In this Telegraph article the author rightly accuses the British State of self-harm against its own economy and citizens, but studiously avoids mentioning Brexit as one of the causes. (See Goldman’s latest estimate on the damage from Brexit in the links below).
Anyway his graph illustrates why workers feel they’ve not gotten any richer for many years.
It’s because they haven’t. That’s a fact, not me being negative.
Graph #2 from: UK economy falls into recession [8]
[9]
Here we see the UK economy has stagnated for two years – and was in recession for the second half of 2023.
That’s a fact, not me being negative.
Graph #3 from: What is the UK inflation rate and how does it affect me? [10]
[11]
Households are living through the worst inflation shock for generations. January inflation unexpectedly held steady – a small rise was forecast – which was welcome. But inflation is still double the official target rate.
Inflation should fall fast from here (more global strife notwithstanding).
But the pain is real and it will have lasting consequences.
Graph #4 from Where UK house prices officially fell the most in 2023 [12]
[13]
Falling house prices are good news from the personal perspective of priced out would-be buyers. You can argue too that a permanently lower level of prices would help the economy, by aiding mobility or redirecting investment to more productive areas.
Nevertheless, their own home is many people’s biggest investment [14] and asset. Lower prices make them and the country poorer.
Property prices fell in 2023 as mortgage rates leapt higher.
That’s a fact, not me being negative.
Graph #5 from Decarbonsation, an annually-updated presentation by analyst Nat Bullard [15]
[16]
You may be a Blimp-ish [17] climate change denier – aka scientifically wrong – but for the rest of us, this is grim viewing.
Happily there’s far more positive visuals showing progress in the fight to curb carbon emissions if you click through the rest of Nat’s presentation [15].
But that’s for the future. Right now things are bleak.
When the facts change I’ll change my mind
I’m not having a go at any reader who feels Monevator has been a bit morose in recent years. Reader SLG above was perfectly civil about it – and I appreciated their nice words about the effort that goes into compiling these weekly links, too.
I am fed up with the negativity myself. The difference is I believe it is out in the world, and that noticing it is warranted.
Putting your fingers in your ears doesn’t make it go away.
Coming out of the financial crisis Monevator was sometimes accused of being a haven for happy-clappy permabulls. I look forward to getting there again.
And as I’ve already said, it’s true things could be worse.
The greatest architects of Britain’s self-harm – among the worst set of politicians we’ve seen in power in the UK for hundreds of years – are no longer fully in charge. The virus that was responsible for even more of the recent misery is a fading memory. Wars lamentably rage on, but so far they’ve not metastasised a into wider conflict.
Oh and at least it’s not the 1970s, as a wonderful series of podcasts from The Rest Is History [18] this week reminded me. Start with that first podcast covering 1974 and work your way through the darkly comic chaos.
We survived the 1970s and we will get through this. Poorer, but who knows maybe wiser for the journey.
Have a great weekend.
From Monevator
Excess reportable income – Monevator [19]
FIRE-side chat: why escape from work you enjoy? – Monevator [20]
From the archive-ator: Bring me sunshine [February 2020] – Monevator [21]
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 inflation sticks at 4% in January… – Which [22]
…but Britain fell into recession in the second half of 2023 – Reuters [8]
Will UK households enjoy a better year in 2024? [Search result] – FT [23]
Brexit Britain has ‘significantly underperformed’ other advanced economies, Goldman Sachs says – CNBC [24]
Brexit frictions hurting firms, says British Chamber of Commerce – CityAM [25]
Construction of affordable homes in London grinding to a halt, Gove told – Guardian [26]
The US stock market rally is fuelling another wave of early retirement – Yahoo Finance [27]
US Bitcoin ETFs now account for around 1% of the circulating supply – Blockworks [28]
[29]
Index funds have officially won [US but relevant] – Morningstar [30]
China retrenchment mini-special
China versus India or Xi versus the West? – Adam Tooze [31]
Hong Kong is self-destructing – The Atlantic via MSN [32]
It pains me to say Hong Kong is over [Search result] – FT [33]
Products and services
Energy bills set to fall by £300 a year to two-year low – Sky [34]
LNER’s simpler fares trial adds more than £100 to some journeys – Guardian [35]
Get between £100 and £5,000 cashback when you open a SIPP with Interactive Investor [36] before 29 Feb. New SIPP customers only. Minimum £10,000 account value. Terms apply. Capital at risk – Interactive Investor [36]
Annuity sales jump to highest levels in years on higher rates – This Is Money [37]
The cost of looking for love on dating apps – The Times [38]
Fixed-rate mortgage rates fall for sixth month in a row – This Is Money [39]
Open an account with low-cost platform InvestEngine via our link [40] and get up to £50 when you invest at least £100 (T&Cs apply. Capital at risk) – InvestEngine [40]
Best places to live in the UK ranked [Tool at bottom] – Garrington [41]
Challenger banks top the tables for customer service – CityAM [42]
[US] spot ETF’s trading debut in six charts – Morningstar [43]
Homes for sale near great pubs, in pictures – Guardian [44]
Comment and opinion
Telegraph journalist tries life on a bare bones pension for a week – via Yahoo Finance [45]
‘Bed and ISA’ and ‘Bed and Pension’ to save tax – Vanguard [46]
Downsizing can deliver big retirement funding boost, study finds [Search result] – FT [47]
Most stock markets have a concentrated top ten – A.W.O.C.S. [48]
Why not 100% equities? [Bit nerdy] – AQR [49]
FIRE versus ICE – Humble Dollar [50]
Invaluable simplicity – Money With Katie [51]
The Holy Grail of Investing… – Cullen Roche [52]
…versus The Holy Sale of Investing – Of Dollars and Data [53]
Death by retirement – Humble Dollar [54]
Why election years are dangerous for investors – Behavioural Investment [55]
Saying ‘enough’ to stuff – Abnormal Returns [56]
Maybe stocks aren’t quite so sensitive to rates in practice – Finomal [57]
Naughty corner: Active antics
ISA millionaires have a lot more in investment trusts… – Trustnet [58]
…yet investment trust sellers are at an all-time high – Trustnet [59]
Yield is not return – Verdad [60]
The CPI overshoot is a statistical artefact – Calafia Beach Pundit [61]
What’s the true bankroll? – The Diff [62]
The Berkshire Hathaway playbook – Rational Walk [63]
Can ChatGPT improve your stock picks? – Alpha Architect [64]
Kindle book bargains
How Not To Be An Antiques Dealer by Drew Pritchard – £0.99 on Kindle [65]
I Will Teach You To Be Rich by Ramit Sethi – £0.99 on Kindle [66]
The Tipping Point by Malcolm Gladwell – £0.99 on Kindle [67]
Money Box by Paul Lewis – £1.99 on Kindle [68]
Environmental factors
Plastics producers lied to public about recycling potential – Guardian [69]
So much for the lithium shortage battery crisis – Marginal Revolution [70]
Scotland’s critically endangered marine and coastal species – The National [71]
People want to work for good companies – Klement on Investing [72]
From turtles to fruit bats, migratory species under threath – Guardian [73]
Relationships mini-special
What to do if love is not working out for you – The Atlantic via MSN [74]
Reimagining life with friendship at the centre – Culture Study [75]
The Lonely Girls Club – BBC [76]
How to date when you’re a woman who doesn’t want children – Guardian [77]
Why Americans suddenly stopped hanging out – The Atlantic via MSN [78]
Off our beat
14 lazy sleep myths, busted – Guardian [79]
The Slough sixth former taking 28 A-levels – BBC [80]
Tim Urban after 40 hours inside the Apple Vision Pro – Wait But Why [81]
Steve Wright: radio giant and feel-good friend to millions – BBC [82]
Young people can’t read long texts anymore – Slate [83]
What does banning AirBnB et al really accomplish? – HBR [84]
The real-life diet of longevity expert Mark Hyman – GQ [85]
And finally…
“If trouble comes when you least expect it then maybe the thing to do is to always expect it.”
Cormac McCarthy, The Road [86]
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