What caught my eye this week.
Morning! I am racing about today so I’m going early with our compilation of the latest money and investing articles to have caught my attention.
If you spot something I’ve not listed – particularly from the weekend personal finance pages – then please do add it with a summary in the comments below. I will be popping onto my mobile every few hours as usual to moderate the comments, and I’m sure your fellow readers would appreciate the heads-up.
Otherwise, thanks as ever for checking in on our site and have a great weekend!
From Monevator
Something to lose – Monevator
From the archive-ator: How to start and run a professional fund – Monevator
News
Note: Some links are Google search results – in PC/desktop view you can click to read the piece without being a paid subscriber. Try privacy/incognito mode to avoid cookies. Consider subscribing if you read them a lot!1
Brexit uncertainty could lead to a rate cut, hints BOE insider – BBC
Borrowing data leave Sajid Javid’s fiscal rules for UK in shreds [Search result] – FT
Where the world’s wealthiest families are putting their capital – Institutional Investor
Products and services
October is Free Wills Month – Free Wills Month
Swapping a buy-to-let property for a managed holiday rental – ThisIsMoney
Virgin Money has launched a limited-access table-topping 1.45% savings account – Virgin
Sainsbury joins Tesco in pulling out of the mortgage market – ThisIsMoney
Ratesetter will pay you £100 [and me a cash bonus] if you invest £1,000 for a year – Ratesetter
£6-a-month Monzo Plus account is axed after just five months – ThisIsMoney
Twitter is cracking down on financial scams – Engadget
One lady learned her Amazon account was hacked when a new TV turned up – ThisIsMoney
Comment and opinion
There are no secrets – Of Dollars and Data
You never go to Pret… and 24 other signs of financial maturity – Guardian
Why I opened Junior ISAs for my children – IT Investor
The case for global diversification is as strong as ever – The Evidence-based Investor
Embracing mistakes – Novel Investor
Working after retirement? Eight ways to reinvent yourself – Money Observer
Benchmarks and benchmarking – Calibrating Capital
Fat, happy, and in over your head – Morgan Housel
Filling the vacuum where status anxiety thrives – Abnormal Returns
Smart Beta vs. Alpha + Beta [Nerdy!] – Enterprising Investor
Naughty corner: Active antics
An excellent example of changing your mind [On Uber] – Stratechery
Hope is not a strategy – Demonitized
My biggest portfolio mistake [Note: refers to US capital gains regime] – Morningstar
Company visits aren’t really important for stock pickers – Albert Bridge Capital
The Woodford Patient Capital Trust plunges again – ThisIsMoney
A reminder of how many unicorns still need an exit – TechCrunch
97% of day traders in this study lost money [Research, PDF] – SSRN
Brexit
Investment trusts that should gain from a Brexit deal – Money Observer
Tory MPs beware: if you whip up an angry mob, they may end up angry with you – Marina Hyde
[Otherwise, “I can’t even”, as the kids say. If you’re *still* entirely relaxed, try harder.]
Kindle book bargains
ReWork: Change the Way You Work Forever by Jason Fried and David Hansson – £1.99 on Kindle
The Year of Magical Thinking by Joan Didion – £0.99 on Kindle
One Last Job: The true story of Brian Reader, the man behind the Hatton Garden heist by Tom Pettifor – £0.99 on Kindle
Elon Musk: How the Billionaire CEO is Shaping our Future by Ashley Vance – £1.99 on Kindle
Off our beat
How the puffy vest became a symbol of power – Business of Fashion [via A.R.]
More than half of native trees face extinction, study warns – Guardian
Why ‘do the best you can’ is terrible advice – Fast Company
“This isn’t a paranoid future nightmare”: The return of Chris Morris – Guardian
And finally…
“No animal is a better judge of comfort than a cat.”
– James Herriot, All Creatures Great and Small
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Comments on this entry are closed.
Sorry in advance if this question is in the wrong place or too basic, I’m relatively new to investing.
Having just started a SIPP with a simple UK Large Cap/Developed World/Small Cap/Emerging/Gilts mix (all passives) – X-raying the portfolio shows 42% Cyclical, 36% Sensitive and 22% Defensive. My question is, should I be concerned with the stock sectors split of the portfolio? Should I add a defensive fund, and if so what passive funds could be appropriate (20-25 year timeframe)
Hi Maria
It depends on what you are trying to achieve, what your time horizon is, what your objective is etc etc.
Depending on your goals, if your time horizon is over 10 years; you’re unlikely to go far wrong from reading this article link from lars kroijer, investing your SIPP in a globally diversified passive index fund with low charges such as VWRL or one of the lifestrategy funds, drip feeding investment in over time and spending more time focusing on enjoying your life than worrying about sectors.
All the best.
https://monevator.com/why-a-total-world-equity-index-tracker-is-the-only-index-fund-you-need/
That Guardian joke article is a a really really bad waste of reading and really bad jokes
Maria
I would not pay much attention to the x-ray.
It seems you have some Gilts – this is essentially your primary defensive investment. If you believe in a passive approach then as long as you feel comfortable with the split of equities and gilts you should not worry about the x-ray. That kind of tool is really for active equity portfolios where the investor wants to adjust the mix according to what they believe is the state of economic cycle. Passive and long-term investors shouldn’t worry about that.
I am chuffed that my curmudgeonly cynicism on Monzo Plus has now been confirmed by the marketplace. You can fool all the people some of the time and some of the people all the time, but you cannot fool all the people all the time.
@ermine — Yes, I made sure that was in for you. 🙂 Fair play, good call.
@Maria. Depends on your risk tolerance really. If you are sure ( really really sure) that you can sit through a 40% decline over say 18 months without selling, then no just sit tight.
You do have to be sure though.
Even better if you think you can buy when the market is down and the news is unremitting gloom.
It’s not easy to be sure of yourself in advance though. Theory is one thing, looking at real very large reductions in value and sitting tight when every news item and pundit says hope is lost is quite another 🙂
@Maria.
Some few years ago my sister in law, following my wife’s recommendation of my ‘investing prowess*’, enstrusted her SIPP savings of £600.00 pcm to me on the strict direction that whatever I invested in was low risk. Her time horizon was 10 years.
Thank you so much for the recommendation darling, I love nothing more than stress and responsibility!
After conversation after conversation regarding ‘what do you mean by’ “risk” , we finally concluded a 85%/15% Bond/Equity split, achieved by VGOV and Vanguard 60% Life Strategy.
My point is that everyone has a different aim/risk/time horizon profle.
My *expertise was several years of complete bollocks mistakes in fads, share tips, investment experts opinion &etc.
After finally settling on 60/40 equity/ bonds and slowly but surely transitioning to 40/60 equity /bonds as I retired, all through low cost tracker ETFs. This produced the steady results that has convinced the Mrs that I am an investement guru.
Please, let no one disabuse her of that belief, it’s worth so many browny points!
Never mind x-ray, alpha, beta and all the other bull. Go 80/20 , 70/ 30 , or whatever, just do it as cheaply as possible.
Apologies if this has been posted before. I often wait for my MV fix and wonder who else might be interesting on the same subject.
I saw three curated lists of financial independence and related blogs on Ms Zhou’s blog. A lot where UK slanted and amongst the famous stars like MV and Ermine were some I didn’t know.
Below the line is a relevant contribution by {indeedably} who spotted a twitter group.
https://www.msziyou.com/uk-fire-bloggers-directory-2019/
Use or bin as you like.
Hi, I’m very new to investing and I have question if anyone would be good enough to give some input.
I’m saving to buy a house outright (no mortgage). My income is low but I’ve saved £40,000 in the last 4 years and plan to have £130,000 in six years time (saving £15,000 a year). Should get me something OK here up north. Up to now I’ve been saving into Marcus easy access paying 1.5% but I’m wondering about an index tracker, like maybe Vanguard LifeStrategy (perhaps the lowest risk one). Is 6 years too short a time to do this (seeing as we are maybe due a recession)? Any opinion appreciated.
@Bob. That’s a big list of FI blogs, especially compared to say 2009. Really underlines how well the S&P (and all asset classes) have been doing over the past decade.
@Colin – I would stick with cash savings personally. Six years is a bit short for equities and you dont want to mess with your goal. In this case I’d not think about gains but losses.
Good luck!
Thank you all for the input. I have already followed all of the advice given and kept it simple (my LISA is 100% in Vanguard 60). It is nice to know when you are on the right track! I find resisting the temptation to check prices all the time helps – you miss the daily ups and downs which, over time won’t matter. It is eye watering how quickly fund costs add up so I’m sold on the passive approach (The total OCF of my SIPP is 0.13%). I will leave predicting the future to Mystic Meg as costs are after all the only control you have..
Absolutely is a big list Spectrum. I was taking it in the context of the recent post by Ermine about the passing of so many sites he used to read.
Ms Zhou has sensibly identified those who have have “graduated”, and may be of interest to the older readers.
I also found it heartening because an article (in the Guardian I think) suggested blogs were old hat and being replaced by Instagram videos. Maybe I’m just not that classy
Thanks Brod – that was my instinct, makes sense 🙂
@Maria
If only someone had imparted the wisdom, you obviously have gained, to me all those years ago.
@Colin. I have been investing for 33 years and based on 28 six-year periods I have not lost money (so far!) over that time span. Compound annual growth has ranged from 1.15% to 14.74% per year. I have lost money in five year or shorter periods, so the general advice to invest in equities for at least five years may be about right.
@B0b
Do you mean the recent Fire Shrink post rather than Ermine?
https://thefireshrink.wordpress.com/2019/09/20/the-fire-cemetery/
@TI just saw this. someone duplicating content?
https://thepassiveincomeblog.com/weekend-reading-just-the-links-maam/
*Foxy — Thanks, I’m aware of their sleazy activity which has been going on for a while now. I’m pretty much always trying to accelerate the takedown of some parasite or another. 🙁
Excellent link, though it was actually this one I was thinking of
https://simplelivingsomerset.wordpress.com/2019/07/24/fire-is-for-the-few-not-the-many/#more-12930
Also apologies to MsZiyou for misspelled name.
@TI At least you should not be worried that they steal traffic from Monevator, as from what I can see they’ve included your canonical link. So search engines understand that *your* content is the original source for the content.
Btw feel free to delete our conversation as it doesn’t add much value to the weekend reading. Just wanted to make sure you’ll read it. I think you pay more attention to comments than the contact form (speaking from personal experience ^_^ )
@Foxy — I’ll probably leave it here so people can see what a martyr to the cause this badly monetized and yet *still* ripped off blog is. 😉
I do read all comments for moderation, though I can only reply to a handful for time reasons, and *most* emails/contacts, though sometimes I get behind and just skip a bunch. I get at least several hundred a month so it’s quite a burden given time/resource etc. 🙂
With that said I can’t see anything from the email address you’ve given here in my inbox/archive.
I think stealing content has less to do with monetization and more with domain authority and traffic volumes. Monevator is doing well in those two departments so I’m not surprised!
I’m desperately trying to find a contact form auto-reply for when I did get in touch and I cannot. Perhaps I never did? I wanted to share an article of mine (so humble I know…). Anyway, I believe so many ppl love the work you and TA are putting in which is reflected in the number of people duplicating you – if that’s any consolation 🙂
— ‘*Foxy — Thanks, I’m aware of their sleazy activity which has been going on for a while now. I’m pretty much always trying to accelerate the takedown of some parasite or another. ‘ —-
What disgusts me and worries me somewhat, is the fact that even to write something on that website, you have to jump through loops and register via sites that will use all your data and demand your first born as sacrifice.
Since the poor guy doesn’t seem to have any comments and is a sad pathetic git, maybe you could send him an invoice for copying your material? He doesn’t have a leg to stand on, so maybe start at a low figure like 50 quid that doubles every day? If nothing else, it may cure his constipation. 🙂
Steve
@Getting Minted – thanks for your input. Vanguards lowest risk, lowest reward Life Strategy is 80% bonds and 20% equities. I’m assuming bonds are very low risk so only 20% of the money is really at risk of loss. In recent years it performed very similarly to your results too.
@Colin – yes, but beware interest rate rises. To avoid potential falls in the value of your bonds if interest rates rise, you’ll need shorter duration bonds which means the interest will be negligible.
The only asset guaranteed to return your nominal savings is cash. And maybe by switching accounts as one year teaser rates expire, you can keep up with inflation.
Whatever you decide, good luck.
Brod – thanks again. I appreciate your advice.
@Brod. Off-topic but the last thing you want is short duration bonds if policy rates rise. The correlation between policy rates and short-duration bond yields is much higher than for long-duration bond yields. Don’t fall into the trap of thinking bond risk is just a function of duration. Bond price changes, to first order, are a function of duration x yield change. The yield change on the short duration bonds will be much greater than on longer duration bonds. The yield curve will chronically flatten. You want short duration bonds if the risk is inflation or fiscal expansion.
Interesting. I thought ‘ effective duration’ took account if this as opposed to ‘ maturity’ ?
@MrO. The duration, D, of a bond is just the first derivative of the price with respect to yield, dP/dY. To first order, it tells you that ΔP = D.ΔY. It tells you absolutely nothing about the direction or magnitude of ΔY.
On an average day, ΔY(2) for a 2-year bond will be smaller than ΔY(10) for a 10-year bond, and because the duration of the 2-year bond is also lower than that of the 10-year bond, then ΔP(2) << ΔP(10). During a hiking (cutting) cycle, however, ΔY(2), will tend to rise (fall) persistently with the policy rate, while ΔY(10) will tend to mean-revert more. There is no reason for 10-year rates to move higher just because the policy rate goes up; in fact the 10-year rate may fall given that higher policy rates may lower inflation and growth expectations. As a result, over time the total price change of the 2-year bond may exceed that on the 10-year bond, despite it's lower duration.
Another link that may be of interest to old school ERE fans -> https://www.getrichslowly.org/early-retirement-extreme/
(hell I even have his book)