Reflections on the year just gone, and links to some of its highlights on Monevator.
With a sprightly 2011 bowling through the front door even as 2010 is stretchered out the back, I’m reflecting it on a good 12 months for UK investors:
- The All-Share index is up 12% on the year1, or 15% with dividends. Take that bears! Optimists like me were rare for most of 2010.
- We’ve got a Coalition Government and a Central Bank striking a balance – however acrimoniously – between cuts and stimulus.
- Europe threatened to blow up, but the countries that matter didn’t, and Germany and France are now on notice.
- Lord Young was right: If you’ve not lost your job, you’ve never had it so good. Mortgages are very cheap, and UK house prices haven’t crashed like they should have – they’ve actually risen in London. UK PLC recovered, at least compared to what most expected in 2009.
- The emerging world is growing great guns.
There were disasters, of course, from the BP oil leak to formerly high-flying FTSE companies going bust and shareholders losing the lot (see Rok and Connaught).
High unemployment, especially among the young, remains a big worry, and a personal disaster for those affected. We better hope it’s not structural, and do something about it if it is.
Personally I expect reducing benefits will help in the medium term, but then I’m often called a right-wing old duffer in waiting by my overwhelmingly Labour voting friends.
Please Sir, I’d like some more
Sensible investors would happily take 15% returns every year. Such a result in 2011 would hardly be outrageous given current valuations, improving sentiment, and stronger growth.
2011 will certainly not be plain sailing, for all the well-known reasons – Europe’s woes, weak US house prices and state indebtedness, and tax increases and spending cuts in the UK.
Then there are the ‘unknown unknowns’ – perhaps an emerging market meltdown, a new conflict, or a big terrorist attack in the West (I fear we’re overdue the latter).
As for the longer term, the truly huge issues – energy transition, over-population, and environmental concerns – still lurk in sight but generally ignored, like wrinkly Grandmas poised to steal a toothy kiss. Agreements on deforestation reached in Cancun in December are a start, but biodiversity (including that in the sea) should be at the top of the agenda for everyone’s sake, especially the poor.
Finally on the future, despite the futility of making short-term predictions I’ve written up my outlook for specific asset classes in 2011 in a separate post to go live next week. Please do pop back to check it out.
My 28 favourite articles from 2010
Now a confession: I am engaged in year-end hedonism this weekend, and so I’m not around to do my usual Saturday morning media wrap.
Instead, I’m going to offer up 28 articles posted on Monevator in 2010 that I humbly submit are still worth reading if you missed them.
Before I do, I am sure most of you will agree that my new co-blogger The Accumulator was a great addition to the site in 2010. He began blogging in September, and he has already fully established his voice here, which is quite a feat given he spends most of his time trying to shave 0.01% off the annual charges on his index holdings. You can find all his passive investing articles here.
Here’s my pick of my own from 2010, split into a few categories:
- Create your own Guaranteed Equity Bond
- How to run your portfolio like a hedge fund
- Avoiding capital gains tax on your investments
- Investing for 100-year olds
- Swensen’s Ivy League Portfolio revisited
- What should a new investor be told to do?
Investing, risk, and wealth preservation
- Types of investing risk
- Why it’s almost always a bad time to borrow to invest
- Wealth preservation strategies of the rich
Motivation for armchair investors
- The pros and cons of being wealthy
- Rich friends, poor friends
- Are you wasting your money on memories?
Careers and earning money
Comments on markets
- Greeks gift us a buying opportunity
- Japan’s lost decade – not our fate
- First-time buyer properties for under £250,000
Investment strategy and data
- UK historical asset class returns
- How to invest like Warren Buffett
- Walter Schloss: His rules that beat the market
- Hedge funds lag the simplest portfolios
- Why investment trusts trade at a discount or premium
- Borrowing to invest and marked to market investments
Other searingly insightful thoughts on investing
- Cash is king, or cash is trash?
- Visualizing investors’ emotions
- Beware the lure of the exotic
- Keep it simple, stupid
- Financial advisers: Swindlers and leeches
Finally, I hope you tried out Monevator’s compound interest calculator, the millionaire calculator, and the mortgage calculator. I know there are lots of calculators out there, but I was was pretty pleased to add these and their fancy graphs to the site in 2010.
Here’s to a safe, happy, and profitable 2011!
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- As of 29th December, which is when I’m penning these words. [↩]