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Weekend reading: Investing works if you give it time

Weekend reading

Good reads from around the Web.

This graph from J.P. Morgan via Business Insider tells an old story very well – that the huge volatility in the returns from shares tends towards a positive return, given sufficient time:

[Click to enlarge-ify]

[Click to enlarge-ify]

I know, I know – we’re all aware and cheerfully appreciative of this fact these days. We’re five years into a bull market, and everyone has forgotten what a bear market feels like, let alone the mood of despair at the bottom.

Maybe you could bookmark the graph, ahead for the next (inevitable) crash?

Please ‘like me’! Please!

Desperate pleading is seldom appealing to anyone – unless you’re a Dominatrix who has spent a fortune on a new home dungeon in your basement and you’re husband is finally playing along – but here’s another request for you to ‘Like’ Monevator on Facebook.

I don’t mean via the little ‘Like’ buttons at the top and bottom of this post.

Rather, can you please follow this link to officially ‘like’ the Monevator on Facebook using the Like button on the Facebook page that loads.

Several thousand people read Weekend Reading every Saturday and Sunday, so I know plenty of you do like Monevator.

Also, I’m often asked whether people can give donations or similar as a (very generous) thank you for our efforts here.

No, it’s fine, really. But please do Like us on Facebook!

I’m sick of it being under 1,000 Likes.

If we can get Likes into four figures then I can forget about it for a few years.

Comment concerns

Finally, a few people have reported comments disappearing into the ether this week – and I have found a couple incorrectly chucked into the trash.

Generally they’re comments by people with financial websites that the spam filter is incorrectly labeling as junk.

No offense, I didn’t program it! 🙂

Monevator gets several thousand spam comments every single day, and at one point I was having to deal with them every few hours.

Now I have multiple layers of protection, and they work well. But the latest updates do seem a little trigger happy.

If you repeatedly post comments that never appear on the site – and you’re not a Ukrainian trying to sell dodgy wares over the Internet – then please do drop me a line and I’ll go looking in the garbage. (You’ll need to be quick, as the spam comments are ditched fairly regularly for sheer volume reasons).

On the same topic, I’m hoping to move to a more modern comment system soon that will enable you to hook up with Facebook or Twitter or else a Monevator user account.

It should also make it easier to have proper conversations with replies and so on.

Watch this space!

From the blogs

Making good use of the things that we find…

Passive investing

Investing by country: Mini-special section

Active investing

Other articles

Product of the week: ThisIsMoney notes that First Direct has launched a 1.39% two-year fixed rate mortgage. You’ll need a 35% deposit and the arrangement fee is almost £2,000.

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 investing

  • The shameful secrets of ‘active’ fund managers [Search result]FT

Active investing

  • [Read the FT article above, to discover the potential benefit of ‘active share’]
  • Jim O’Shaughnessy: A deep dive into price-to-book value – Yahoo
  • We’re back to the 1990s with stock options – Fortune
  • The economics of US shale and $75 oil – Bloomberg

Other stuff worth reading

  • UK homes: £5 trillion [Again, a balance sheet is not just debt!]Guardian
  • …still, something surely has to give in UK real estate – WSJ
  • …but you’re not convinced? Then put your BTL into a pension – Telegraph
  • Morgan Housel: Why I love investing – Fool US
  • Morrisons now the cheapest supermarket – Guardian
  • Jeremy Grantham: Oil is still all-important – Barron’s
  • On China: Globalisation 2.0 – Telegraph
  • Scott ‘Dilbert’ Adams: Why a system is better than a goal – Inc

Book of the week: A surprising array of successful people sing the praises of self-help guru Tony Robbins. He’s now written a book on getting rich: Money: Master the Game.

Like these links? Subscribe to get them every week!

  1. Reader Ken notes that: “FT 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”.” []
{ 25 comments… add one }
  • 1 Grand November 22, 2014, 1:31 pm

    My Saturday officially kicks off when I’ve loaded the latest round of weekend reading 🙂 Keep up the good work!

  • 2 Uncertain November 22, 2014, 1:34 pm

    Would love to like you on Facebook, unfortunately I am a Luddite who does not have it, so you will have to make do with my thanks.
    Another great set of articles and I do point friends and acquaintances your way for background reading and to your brokerage charts, I will be sure to ask them to put in likes.

  • 3 William November 22, 2014, 3:19 pm

    I can only echo Uncertain’s comment.

  • 4 L November 22, 2014, 3:28 pm

    Despite being in my 20s I do not have Facebook either. I do pass on this website to all I know however.

  • 5 Tyro November 22, 2014, 4:13 pm

    I’m another who doesn’t ‘do’ Facebook but does appreciate Monevator. Maybe Monevator’s demographic is too sophisticated for the teenagers’ noticeboard? Just a thought ….

  • 6 The Investor November 22, 2014, 5:01 pm

    Maybe Monevator’s demographic is too sophisticated for the teenagers’ noticeboard?

    Hah, the teenagers are all on Instagram, and the sophisticates have moved to Ello. 😉

    Thanks for the likes all who could do the deed. We’re over 1,000!

    I don’t expect a phone call from Mark Zuckerberg or indeed anything to happen at all, but at least it’s stopped annoying me. 😉

    Cheers too for passing on word of the site without the aid of modern newfangled networks.

  • 7 ermine November 22, 2014, 5:02 pm

    Facebook? Maybe PF types just aren’t social media mavens…glad it isn’t just me!

  • 8 Charlie November 22, 2014, 5:27 pm

    Bugger! I was going to say more or less what the others have said above.
    I’ve been here for nearly a year, and pass on details of this site to anyone I think might be interested.
    I certainly deeply value the information, advice and news.

    Thank you for it.

  • 9 Andrea November 22, 2014, 5:34 pm

    Have you considered a Pinterest account? It’s good for traffic. You’ve been pinned a few times already. You may as well set one up and pin a few key articles. It doesn’t take long.

  • 10 The Investor November 22, 2014, 10:14 pm

    @All — Thanks!

    @Andrea — Excellent idea, cheers. So I’ve just created one!


    Annoyingly, pinning large versions of our graphics seems to link to my content delivery network rather than to the main Monevator URL, so I may need to have a play over the next few days.

  • 11 Andrea November 23, 2014, 9:22 am

    Nice one. Following! If you add a piece of code to the site you can access Pinterest analytics

  • 12 Paul S November 23, 2014, 10:28 am

    The long-term out-performance of shares over bonds that the J P Morgan graph shows is impressive but less than reality. Those percentages are nominal. Inflation over the period was about 3.5% which would reduce the share/bond CAGRs from 11.1%/6.1% as shown to about 7.5%/2.5% in real terms.

    Inflation takes a bigger proportional chunk out of low returns which is why results should always be presented in real terms.

    Sorry, not on facebook either….but I do like you, really.

  • 13 Graham November 23, 2014, 11:14 am

    You may now be over 1,000 followers on FB but just 3 followers on PInterest. Plus ça change, plus c’est la même chose.

  • 14 Andrea November 23, 2014, 12:16 pm

    Like it Graham!

    Pinterest isn’t so much about followers as Facebook is though so the numbers aren’t so important. It’s more about pinning and re-pinning.

  • 15 paul claireaux November 23, 2014, 5:06 pm

    Hi, there,
    That’s an interesting chart from JP Morgan – presumably based on US Data?

    In the UK (using data from the Barclays Equity Gilt Study 2014) we find that our extremes are . . . . well more extreme.

    Our worst ever year of the last 50 years (1974) produced the following returns
    Equities -50% (-58% real)
    Gilts -15% (-29% real) and
    50 50 fund -33% (-44% real)

    Sometimes equities and bonds do go down very heavily together.

    So your choice of asset to reduce risk on equities is important.


  • 16 grey gym sock November 23, 2014, 5:20 pm

    Paul S: yes, real returns would be more meaningful. however, working with the nominal returns …

    over 1 year, $100k in shares could turn into anything between $63k and $151k.

    over 20 years, $100k in shares could turn into anything between $320k and $2.7m.

    so you actually have a broader range of possible outcomes over longer periods. OTOH, the probability that you’ll lose money in shares, or that you’d have been better off staying in cash, falls as the period gets longer. shares do become a better bet over longer periods, but you don’t control outcome.

    of course, returns could also be outside the previously observed range. it’s an indication, at best.

    sorry, no facebook for me – they want real names!

  • 17 magneto November 23, 2014, 5:24 pm

    Thanks as always for the reading list.
    Just loved the following comment from Morgan Housel (is that a real name?), in ‘Why I Love Investing’.

    “Everyone in the stock market has an opinion. I do, you do. Most of them are wrong, biased, incomplete, or uninformed. Neither of us care. We’re too busy arguing with each other to notice.”

  • 18 Grumpy Old Paul November 23, 2014, 7:09 pm

    Surprised at the number of comments from people who don’t do FB. I don’t but almost all of my bus pass-toting contemporaries do to some extent. I suspect people with Asperger traits are over-represented in the PF community as well as IT but that’s just surmise.

    @Paul C,

    Fascinating observation on 1974 which I remember well. Inflation peaked at 26%. A different world – I had hair then! But it provokes a few thoughts:

    – How well would my modest portfolio stand up to a scenario?

    Index-linked gilts and NSI saving certificates would have helped. As would have overseas exposure, I guess. I shudder to think what would happened to investment trusts during that period. Corporate bonds would presumably have gone the same way as gilts.

    – The impact of rebalancing after major movements would be interesting since it would led to increasing equity exposure since the UK stock market fell faster than gilts.

    – Most importantly, would I have had the nerve to stick with it and maintain my target asset allocations in percentage terms through that period?

  • 19 grey gym sock November 23, 2014, 7:36 pm

    oops, when i said: “over 20 years, $100k in shares could turn into anything between $320k and $2.7m” … that should be $1.9m, not $2.7m (typo when running the calculation) … it doesn’t change the argument, though.

  • 20 Vanguardfan November 23, 2014, 8:17 pm

    I do do Facebook (sort of) but lack of anonymity is a problem, plus I don’t talk to any of my real life friends about PF so it’s something I’d rather keep hidden (like my stamp collection!) I’d rather people didn’t know just what a nerd I am – in real life I’m quite normal 😉

  • 21 Colin November 24, 2014, 11:34 am

    I also dislike/avoid Facebook but I logged in and “Liked” especially, to show my appreciation for the great articles you write here. Thank you and please keep up the good work. Looks like 1150 likes now so hopefully you and I can both now forget about it for a couple of years 🙂

  • 22 The Investor November 24, 2014, 2:04 pm

    Indeed! Thanks to everyone who did the deed.

  • 23 Cowboy November 24, 2014, 3:03 pm

    I already liked it quite some time ago, does that make me one of the cool kids… First time for everything I suppose. I do look forward to these weekly link fests, in many cases some articles can be a sobering anti example of why I keep it simple with indexes all the way these days.

  • 24 Survivor December 12, 2014, 1:17 pm


    I don’t mean to be patronising in any way, but you need a threshold amount of intelligence & ambition to improve yourself/your life to be dedicated to financial freedom….. As such, it seriously goes against the herd & that has its punishments as most people often disapprove of what they don’t understand. So it’s hardly surprising that most of your readership will probably not be social media gadflies – they understand there’s risk in putting private information in the hands of the likes of Faceless corporations to sell to the highest bidder. You have no control over what happens next – but one thing is as certain as it gets – your benefit will be very low on their list of priorities if it’s there at all. True privacy is becoming the biggest new luxury.

    Social media representation is therefore not the best way of judging your value [or showing your reach] …… but your following still very much appreciate your efforts & have great respect for your mission on this site. Personally, this is the only website I’ve commented to in my life to date.

  • 25 The Investor December 19, 2014, 12:06 am

    @Survivor — I hear what you’re saying , and agree to some extent. But with my ‘publisher’ hat on, I do need to keep getting the word out…

    That said, really appreciate your generous words, and your rare comment!

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