What caught my eye this week.
When I first began writing about investing on Monevator in 2007, I wondered when I’d run out of things to say.
The basics of good personal finance can famously be written on a Post It note.
At the same time, index funds were already mopping up retail investors’ money like baleen whales feasting at an all-you-can-eat plankton buffet.
As for the economy, the UK chancellor Gordon Brown boasted he’d put an end to boom and bust.
What would there be left to talk about?
Of course the Great Financial Crisis soon kicked such complacency into touch.
And shortly afterwards The Accumulator started writing for Monevator. His beady forensic eye for the hidden costs and frictions to avoid in passive investing [1] – and his awareness of the psychological landmines that abound – proved this blog could be a writing project to take us into old age, if you guys will keep having us…
(AI notwithstanding [2]!)
Harder, better, faster, stronger
What I didn’t see coming in 2007 though was that the mechanics and tools of private investing would continue to evolve…
…or devolve, depending on your perspective.
We already had index funds, ETFs, cheap share trading for those who wanted it – though not zero commissions [3] yet – and innovations like all-in-one [4] and target-date [5] funds that wrapped best investing practice into products that enabled you to buy good investing habits off the shelf.
There was still a wealth of venerable investment trusts [6] for old nostalgics like me to kick the tyres on should we want to do something different, too.
Were we crying out for free share trading, levered [7] and short [8] ETFs, and Bitcoin [9]?
Probably not, but they came our way anyway – and there’s no end in sight.
In just the past few weeks I’ve been reading about:
- Mirror notes [10] from the investing platform Republic (formerly Seedrs) to enable UK investors to get exposure to the performance of unlisted SpaceX.
- The new stablecoin [11] legislation in the US. Boosters say it lays the groundwork for moving the financial rails wholesale onto the blockchain.
- RobinHood’s tokenised stocks – now available in Europe – which combine both these ideas to purportedly [12] enable you to bet on the future of OpenAI, say, again via the blockchain.
- The UK’s FCA relenting to allow everyday investors to buy exchange-traded notes tracking Bitcoin and potentially other crypto assets from 8 October.
Is such innovation a good thing?
Well… perhaps more than seems likely right now.
Get lucky
Paul Volcker, the inflation-beating chairman of the Federal Reserve, notoriously remarked that the ATM was the only useful financial innovation of the past 30 years – at least as of the time of his quipping.
But even as he spoke, the seeds were being laid for the very welcome private investing revolution that I outlined at the start of this piece.
So maybe we should be humble about where these latest developments might lead?
It’s easy to be cynical about whether the average person has any need to buy crypto-based exposure to Elon’s rocket ships.
But perhaps we will all be doing something similar a couple of decades hence – and maybe not even realising it?
On the other hand, I have some sympathy with Bill McBride, who won a bit of renown in the blogosphere nearly 20 years ago by predicting the financial crisis.
And his view [13] of these latest innovations is sobering:
The key to preventing a financial crisis is to keep the non-regulated (or poorly regulated) areas of finance out of the financial system.
A good example is the Tulip Bubble in the 1600s. Some people got rich, others were wiped out, but it had no impact on the financial system.
Unfortunately the current administration has embraced crypto. They are allowing it to creep into the financial system, and allowing 401K plans to hold crypto (aka future bagholders).
There has been some discussion of allowing financial institutions to lend against crypto holdings – like for a mortgage.
This is mistake and increases the possibility that crypto will be the source of the next financial crisis.
Time will tell. But hopefully we’ll be here to report on the unfolding drama again [14] should the worst [15] happen…
Please share your thoughts in the comments below, and have a great weekend.
From Monevator
Sticking to a financial plan when the honeymoon is over [Members] – Monevator [16]
The Wealth Ladder [17] – Monevator [18]
From the archive-ator: Seven unusual ideas for a better value wedding – Monevator [19]
News
UK GDP slows as economy feels effect of higher business costs – Sky [20]
Employers hire virtual staff and contractors to combat the N.I. hike – This Is Money [21]
House prices are falling, but it’s a mixed picture across Britain – This Is Money [22]
Over 3.6m investors pay dividend tax [Twice as many as in 2021] – Yahoo Finance [23]
Average mortgage rates below 5% for the first time since Truss budget – BBC [24]
Oasis tour injected £1.1 billion into the UK economy – This Is Money [25]
London developer must pay ex-wife £15m after hiding assets in ‘sham’ trust – Standard [26]
[27]
Fees predict performance – Basis Pointing [28]
Inheritance tax speculation mini-special
Treasury looking at IHT again to plug deficit [No Brexit cited, as usual] – Guardian [29]
Gifting and the seven-year rule are apparently in the spotlight – Morningstar [30]
How does IHT work today and what might be changing? – Guardian [31]
Yet another take – This Is Money [32]
How onshore bonds can help beat inheritance tax – MoneyWeek [33]
The already-planned changes largely protect family farms, study finds – CenTax [34]
Products and services
Celebrate your birthday with 35 freebies and discounts – Which [35]
Beat the base rate for three months with Prosper’s 4.5% fixed-rate savings – T.I.M. [36]
What’s happening to car insurance premiums? – Which [37]
Get up to £1,500 cashback when you transfer your cash and/or investments to Charles Stanley Direct through this affiliate link [38]. Terms apply – Charles Stanley [38]
The pros and cons of an immediate needs annuity – This Is Money [39]
Savings will be taxed directly from pay packets from 2027 – Standard via Yahoo [40]
How to avoid getting stung for hidden hotel charges – Be Clever With Your Cash [41]
Try health service Thriva via my affiliate link [42] and we both get £30 in credit – Thriva [42]
How to complain to the Financial Ombudsman Service – Be Clever With Your Cash [43]
Homes for sale near golf courses, in pictures – Guardian [44]
Comment and opinion
Un-exceptional US stock market earnings? – Elm Funds [45]
How the top rate of income tax became a middle-class problem – The Times [46]
Retirement is only halfway up the mountain – A Teachable Moment [47]
Everything is disruptable – Abnormal Returns [48]
More meetings means less thinking – Behavioural Investment [49]
How to use Bitcoin in your portfolio – Morningstar [50]
The first $10,000 is the most important – Of Dollars and Data [51]
Is London’s financial future evolving or eroding? – CNBC [52]
Why the first years of retirement matter most – Retirement Researcher [53]
Wealthy people buy more insurance than theory predicts – Alpha Architect [54]
Investing and longevity mini-special
How likely is it that an investor will outlast their savings? – Maths Investor [55]
Investing in the inevitable tides of demographic change – Polymath Investor [56]
What are your chances of ending up in a care home? [Paywall] – FT [57]
Naughty corner: Active antics
Three big ideas for understanding how stocks work – Fortunes & Frictions [58]
Retail traders are driving crazy post-earnings volatility – Sherwood [59]
How much cash should companies hold? [Research, PDF] – Morgan Stanley [60]
The damage done by MiFID II – Klement on Investing [61]
Shorting is hard – Inside the Mind of Mojo [62]
A Novo Nordisk deep dive – Quartr [63]
Super-long Japanese government debt: the new widow-maker – FT [64]
Kindle book bargains
What They Don’t Teach You About Money by Claer Barrett – £0.99 on Kindle [65]
Too Big to Fail by Andrew Ross Sorkin – £0.99 on Kindle [66]
50 Economics Ideas by Edmund Conway – £0.99 on Kindle [67]
Mastering the Business Cycle by Howard Marks – £0.99 on Kindle [68]
Environmental factors
Europe bakes and burns, turning holiday hotspots into infernos – Guardian [69]
Government inexplicably tells citizens to delete old emails to save water – Tom’s Hardware [70]
Squid and chips? UK’s warming waters could change what we eat – Independent [71]
What might happen to cities as sea levels rise? – Klement on Investing [72]
Why ‘best time to visit’ no longer applies – BBC [73]
Plight of the bumblebees – Biographic [74]
Our wasteful culture has led us to Wet Wipe Island – Standard [75]
Study finds whales and dolphins regularly hang out togother – The Conversation [76]
Robot overlord roundup: ChatGPT-5 edition
OpenAI moves fast and breaks ChatGPT – Spyglass [77]
GPT-5 – “a legitimate expert in anything” – can’t spell – Sherwood [78]
An AI nerd rounds-up all the other takes on GPT-5 – Don’t Worry About The Vase [79]
GPT-5 and other LLMs are not human brains. They never will be – Gary Marcus [80]
Not at the dinner table
The permanent stain – Andrew Sullivan [81]
Trump administration asks NASA to draw up plans to destroy its own climate-monitoring satellites – NPR [82]
How big are Trump’s tariff revenues, really? – NPR [83]
Mimicking China isn’t how the US should race against China – Faster, Please [84]
Why a Leeds teenager woke up with a Chinese bounty on her head – Guardian [85]
Is America about to solve its housing problem? [Podcast] – The New Bazaar [86]
Off our beat
China’s unemployed young adults who pay to pretend to have jobs – BBC [87]
Meta (Facebook/Instagram) makes at least $25 a month per US user – Sherwood [88]
As thousands of teenagers scramble for university places…why? – Guardian [89]
The rise and fall of musical ringtones – Stat Significant [90]
Dining across the divide – Guardian [91]
Wandering in Woolwich – Propegator [92]
No printers or PCs says Starbucks Korea to its customers – BBC [93]
And finally…
“Have some humility – plenty of clever people get spanked regularly by the markets.”
– Tim Hale, Smarter Investing [94]
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