Good reads from around the Web.
Often it feels like the best thing to do as a writer about investing is to repeat what you said last week.
In a Bloomberg podcast I link to below, the entertaining hosts bemoan how boring the markets are right now. That’s understandable – they’re both journalists, and they want to write about drama.
Nobody becomes a journalist to say “nothing doing here, as you were”. But that’s actually pretty good advice to live by when it comes to investing.
While The Accumulator continues to labour away on his book, I’ve republished some of his old articles to remind people what we’re missing. Frustratingly, TA has a habit of putting in useful contemporaneous snippets of data when he writes (whereas I try to wax eternal, like a Poundshop Marcus Aurelius). Many of his older pieces can’t just be dusted down and passed off as new. But more than a few can, because the best financial principles are timeless.
The alternative is to just keep saying the same thing, but to try and say it better each time. This is hard. Shakespeare’s 150-odd sonnets go over the same ground as doggedly as a Roomba, but they don’t really get better as you go on. And I’m no Shakespeare.
The third approach (and the motivation for these weekly roundups) is to see how other people approach the same topics, and to applaud them when they knock it out of the park.
Which brings me to Just Keep Buying, a piece this week from the Of Dollars and Data blog. It sees the anonymous author (hey, I already feel a kinship) approach the age-old topic of dollar-cost averaging with a mix of succinct prose and revealing graphics.
This is the best bit:
If I still haven’t convinced you [to just keep buying each month] let me tell you a story.
The story is about a man with possibly the worst luck in investing history. He made a total of 4 large stock purchases between 1973 and 2007. He bought in 1973 before a 48% decline in stocks, bought in 1987 before a 34% decline, bought in 2000 before the dot com crash, and bought in 2007 before the Great Recession.
Despite these 4 individual purchases that totaled a little less than $200,000, how did he do? He ended up with a $980,000 profit for a 9% annualized return.
What was his secret? He never sold.
I’d go and read the whole article if I were you.
Happy Easter! How I wish I could still eat all my chocolate eggs in one morning. Thank goodness they used marshmallows in that famous test, not Cadbury’s Caramels.
From the blogs
Making good use of the things that we find…
- No, active managers don’t beat the market ‘over the cycle’ – Reformed Broker
- The fee paradox: Managers’ fees fall but total costs rise [PDF] – via TEBI
- The best sales tactic in finance – A Wealth of Common Sense
- Are expected rate changes ‘priced into’ bonds? – Oblivious Investor
- Tadas Viskanta: Let’s keep ETFs weird – Enterprising Investor
- What does it mean when people say the market is overvalued? – Retirement Researcher
- Seatbelt laws and the lesson for investors – The Value Perspective
- How to avoid yield traps: Part 2 [PDF] – John Kingham
- Peter Lynch’s best thoughts on market history – Novel Investor
- Reading venture capitalists – Howard Lindzon
- Bond basics: Why prices fall when rates rise – Canadian Couch Potato
- If you’re prepared to earn a bit, you can semi-retire much earlier – Concordant Blog
- Retirement society – SexHealthMoneyDeath
- The right way to start a business – The Escape Artist
- Five years later: Reflections on life after work – Financial Samurai
- On power laws and time – What I Learned On Wall Street
- Why do people experience different retirement outcomes? – Retirement Researcher
- 16 things your successful friends have given up – Tim Denning
- There is no bucket list. Life is the bucket – Ted Rheingold
Product of the week: The Telegraph reports that Atom Bank is back with more table-topping – and likely loss-leading – products. Last time Atom crashed its own App with the popularity of its market-beating savings bond. Now it’s offering five-year fixed rate mortgages at as little as 1.29% (with a £900 fee and a 40% deposit). Get ’em while they’re hungry! Outliers like this don’t stick around for long.
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
- The maths behind the futility of active investing – Bloomberg
- FCA prepares for the march of the robo advisors [Search result] – FT
- Have US inflation-linked bonds (TIPS) delivered? [Deep dive] – Morningstar
- Simplicity is an under-rated virtue for older investors [Search result] – FT
- Yale’s faith in active managers has not been shaken – Bloomberg & Bloomberg
- When a Harvard pedigree won’t help you – Institutional Investor
- Six ‘boring’ shares that have beaten Amazon – Telegraph
- The hidden cycles that rule the markets [Podcast] – Bloomberg
A word from a broker
- £1,500 tax-free from your pension pot for retirement advice – Hargreaves Lansdown
Other stuff worth reading
- The elderly now paying tax on dividends [Why I long urged ‘pointless’ ISAs] – Telegraph
- Will London fall? [Superb layout] – New York Times
- Credit cards: Flexible friend or implacable foe? [Search result] – FT
- Student loan interest rate set to rise to 6.1% – BBC
- You’ll wait a long time for a mammoth return from premium bonds [Search result] – FT
- Tax burden gap rises between higher and lower earners [Search result] – FT
- The ‘fix-perts’ explain how to repair seven common household items – Guardian
- Could Brexit really affect Britain’s property market? – ThisIsMoney
- Millennials forced to choose between a child and a career – Guardian
- The utter uselessness of job interviews – New York Times
- John Hamm would like to buy a time machine – Wealth Simple
Book of the week: According to wealth manager turned author Jonathan DeYoe: “Our relentless obsession with money and investing is ruining our happiness and causing bad financial outcomes.” If that resonates with you (and it might if you’re reading the small print of a financial blog, though it’s not really in my own interest to point that out!) then you could try his new book, Mindful Money. It’s only £6-something on Kindle, so not too much deep thought required.
Like these links? Subscribe 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”. [↩]