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Weekend reading: Pause and reload

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What caught my eye this week.

Hey there, thanks for stopping by. I appreciate things are a bit quiet around Monevator the past couple of weeks. We are having a summertime hiatus.

My co-blogger The Accumulator is on holiday. Quite the opposite issue here – I couldn’t do anything for the blog beyond comment moderation until Thursday night, as work has piled up with a particular client.

Meanwhile erstwhile contributors The Details Man, The Greybeard, and Lars Kroijer all seem to have said their pieces for now. Our bench is not so deep these days.

So far so gloomy. The good news is that this could be the calm before the… well, not the storm exactly but at the least what weather forecasters call ‘changeable’ conditions.

Because while I’m busy currently, my professional workload is set to get significantly lighter in a few weeks. I’m not sure how much time will be redirected towards Monevator. But certainly: some.

This is an interesting time for the blog. We’re still standing after 13 years. (Tiny trumpets!) Traffic plateaued years ago though. (Tiny violins!) People come, get the simple message, and leave. Or, starting around 2015, they never leave social media or YouTube to find us at all.

(If you’re wondering where all your favourite independent websites went, it was thataway.)

We’re at a low ebb financially speaking, too. Long-time readers will recall this was always the weakest leg of this operation. Post-Covid-19, that gammy leg has fallen off altogether.

No matter – it all sets the stage for some overdue introspection. (And it means we might FINALLY get our book finished…)

Asset allocation is not the only fruit

I was ruminating about what a passive investing / money blog should aim to do in 2020 and beyond when I came across an interesting post by Robin Powell at Humble Dollar.

In his article Robin outlines what people really pay good financial advisors for. It struck me most of his points could apply equally to our kind of investing website:

Good financial planners will play a number of pivotal roles for their clients, none of which is found on the typical job description.

Here are seven of those roles:

Guide. Most people know what they want or, at least, know what they don’t want out of life. What’s often missing is a sense of how they can get there. A planner provides an independent plan, showing possible pathways and the tradeoffs involved in each.

Teacher. Many people’s sense of what drives investment returns comes from the day-to-day noise in the financial media. It’s all about investment products and short-term returns. A good planner shows clients what drives long-term returns and connects this to their life.

Coach. It’s easy to make financial resolutions—to save more, to spend less, to grow wealth, to leave a legacy. It’s not so easy to keep them. At their best, financial planners will ensure goal accountability, keeping clients on their desired path and talking them off the ledge in anxious times.

Organizer. Our lives are busy. Jobs and family commitments leave little time for dealing with the minutiae of insurance, portfolio analysis, rebalancing, cash flow analysis and so on. A good advisor takes care of this complexity and frees you to focus on what really matters to you.

Filter. The problem right now isn’t gathering enough information. Instead, we’re overloaded with the stuff. The challenge is finding the right information for us in a form we can digest. A good advisor becomes a trusted source and an information filter.

Counselor. Few big choices in life are simple. There are always competing imperatives. Planners who can help you cut through the noise and focus on your underlying values are worth their weight in gold.

Sentinel. The best financial planners are not only looking at your circumstances as things stand today, but also what might be coming over the horizon to change all that. And they are mindful of your legacy—the welfare of future generations and how your wealth can keep working beyond your lifetime.

Go read the full post at Humble Dollar, especially if you’re in the market for financial advice.

And Watch This Space.

This website is much more geared towards evolution versus revolution in its DNA, so don’t fret if you’re already a fan.

It is, however, time for some modest mutations.

Have a great weekend!

From Monevator

From the archive-ator: What is liquidity? – 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

‘Eviction day’ looms for cash-strapped renters [Search result]FT

British visitors to France could face two-week quarantine on return – Guardian

Just Eat to stop using gig economy workers – BBC

Landlords must reveal if tenants they try to evict have been affected by coronavirus – ThisIsMoney

Grand Designs host Kevin McCloud’s housing firm at risk of insolvency – Guardian

John Lewis’ £35m flagship store in Birmingham will never reopen after Covid closure – ThisIsMoney

[Click to enlarge the insights]

Housing outlook: Q3 2020 – OBR / Resolution Foundation

Products and services

HSBC hits flathunters with loans clampdown – ThisIsMoney

Why cash has been piling up during the pandemic – The Economist

New crop of ETFs offer creative investing ideas for volatile times [Search result]FT

Sign-up to Freetrade via my link and we can both get a free share worth between £3 and £200 – Freetrade

Will taking a coronavirus payment holiday affect your credit score? – Which

1930s UK homes for sale [Gallery]Guardian

Comment and opinion

Allan Roth: 500,004 reasons I’m not buying gold – ETF.com

Doing next to nothing is a very underrated strategy – A Teachable Moment

The hardest investing questions to answer – A Wealth of Common Sense

How to use an impact/effort matrix for your finances – The Simple Dollar

Do as I don’t – Humble Dollar

The rise and rise of ESG investing [Infographic]Visual Capitalist

Mentally re-framing bull and bear markets – The Big Picture

Larry Swedroe:  More proof that consultants can’t pick winning funds – Evidence-based Investor

Earn while you walk – Quietly Saving

Pedal pushers: when bikes became the vehicle for a bubble – Lookout Investor

Along the curve [Wonky]Breaking the Market

Naughty corner: Active antics

Paper shuffling to fool investors – Novel Investor

How much conviction do you hold in your investment views? – Behavioural Investment

Gold’s role in global asset allocation will keep the price above $1,700 – Bloomberg

Covid corner

Why Britain failed its coronavirus test – The Atlantic

For every three Covid-19 deaths in the UK, lockdown may have caused another two – Sky News

Coronavirus cases now appear to be stable across England – BBC

Antibody prevalence for SARS-CoV-2 following the peak in England [Research, PDF]Imperial

Immunology is where intuition goes to die – The Atlantic

Why it took us (and the WHO) so long to understand the coronavirus – Slate

Even in a virus pandemic, Germans are sticking with cash – NPR

NYC diner traffic still 75% down [Lower cases due to herd immunity or harsh lessons?]Calculated Risk

On pins and needles: Will Covid-19 vaccines ‘save the world’? – McKinsey

Kindle book bargains

Influence by Robert B. Cialdini – £0.99 on Kindle

How to Own the World: A Plain English Guide to Thinking Globally and Investing Wisely by Andrew Craig – £0.99 on Kindle

I Will Teach You To Be Rich by Ramit Sethi – £0.99 on Kindle

Super Thinking by Gabriel Weinberg and Lauren McCann – £0.99 on Kindle

Off our beat

The unraveling of America – Rolling Stone

Helping your pet with post-quarantine separation anxiety – New York Times

How de-globalisers construct false narratives on the back of evident truths – Epsilon Theory

Is there a future for business cards? – Institutional Investor

And finally…

“You must go on a long journey before you can really find out how wonderful home is.”
– Tove Jansson, Comet in Moominland

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{ 82 comments… add one }
  • 51 Brod August 16, 2020, 8:44 am

    @Matthew – but the inflation has occurred. In asset values – house prices & shares come to mind.

    Btw, the Resolution Foundation piece on House Prices shows the national picture. It bears little relation to London (as has been said many times before.) Our South London house has appreciated 50%+ in nominal terms since we bought during the “depths” of the post-financial crisis dip. Still, I guess the higher they rise, the further they fall…

  • 52 Seeking Fire August 16, 2020, 8:48 am

    Peter, That’s an interesting link thanks, I hadn’t seen it. I hold the $TIPS for unexpected inflation. Like the link I don’t currently expect them them to outperform conventional bonds as of today but they could do in the future hence the protection. The YTM is -1% (not much of an investment on paper) particularly when in about twenty years ago you could get £ILG at inflation + 4% real return. In March correlations of everything went to one given the desire to sell any volatility, raise cash. In that situation as you say cash is king. That type of volatility tends not to be sustained unless say you live in situation where the future of the country is under serious debate (e.g. Lebanon). That is when gold tends to become useful. As Hariseldon says, covering a range of scenarios seems sensible. I have read, which I largely agree with, that we haven’t seen the typical type of inflation we know of due to the deflationary effects of globalisation, which could be about to reverse a bit but who knows. I do question a bit when people say there’s been no inflation though…….mmm the cost of sheltering someone (home), privately educating someone, looking after the elderly in care, buying safe income through an annuity all seems to have gone up a lot in price over the last twenty years.

  • 53 Matthew August 16, 2020, 9:40 am

    @brod – indeed the things not measured by cpi have inflated… with property and bonds I wouldnt expect a fall as such so much as decreased gains in the future – property is largely linked to what mortgage/rent people can afford and how property yields against other things, so if wages dont increase much and people can’t cram into tiny houses any more then i think there will be a limit to its future growth. With regards to property too it wont be too many decades until boomers start handing them down

  • 54 Al Cam August 16, 2020, 10:22 am

    The Consumer Prices Index, or CPI, was first published in 1997 to measure inflation consistently across all European Union states. In 2003 the CPI became the Bank of England’s inflation target. The CPI is required by European law and ONS
    has to produce the CPI to the specification of European legislation.

    CPIH was introduced in 2013. CPIH is currently the governments preferred measure of inflation. CPIH includes a measure of owner occupiers’ housing (OOH) costs including Council Tax. It is otherwise identical to the CPI, although its calculation and structure are controlled by ONS and so it may deviate further from the CPI in future.

    A summary of the extant basket of goods for CPI, CPIH & RPI can be found at:
    https://www.ons.gov.uk/economy/inflationandpriceindices/articles/ukconsumerpriceinflationbasketofgoodsandservices/2020 with more lower-level details provided in Annexes A & B.

    The baskets include most of the items that some people seem to assume are “missing”, such as school fees, nursing/care home fees, etc

  • 55 Brod August 16, 2020, 10:28 am

    @Matthew – I would suggest that ultimately property prices are underpinned by people being able to pay the mortgage i.e. having a job. And by all accounts we should expect a return of massive unemployment soon. People mistake the lack of liquidity of property, and not being constantly marked to market, with stability. And a property crash just stops people spending – no new car, holiday, lattes, make do without the latest on trend shoes, etc, etc.

    I remember the ’90s crash, it was ugly and ground on seemingly forever. I knew a guy back then who worked for a firm of Chartered Surveyors in Hanover Square. While all of us were bemoaning we’d never be able to buy, he did. Great place overlooking Battersea Rise, I was so jealous. Unfortunately, the UK out of ERM, he lost his job, lost his flat, declared bankrupt. Yes, a massively concentrated portfolio of assets, but we were mid-20s, what could possibly go wrong? I hope he managed to get back on his feet. As a consequence, I’ve always been cautious of property.

  • 56 Matthew August 16, 2020, 10:49 am

    I wonder if cpih also doesnt show the complete picture as imputed rents may move differently to house prices – if rates went up landlords may have to increase rents to cover the mortgage even if house values drop, and if rates drop cpih may drop even if house prices rise so cpih could be giving us a false illusion of whats happening – its all well and good to think about imputed rent if someone can borrow most of the houses value but if they can’t borrow and have to cough up a bigger deposit instead then they are experiencing the inflation on the value itself, rather than their monthly payments. Cpih practically consigns everyone to renting at best, doesn’t track the ability to buy

  • 57 Al Cam August 16, 2020, 11:01 am

    @Matthew:
    Good discussion of the many issues around OOH at:
    UK Consumer Price Statistics: A Review
    Paul Johnson
    January 2015

    Out of interest, “ability to buy” anything has nothing to do with inflation.

  • 58 Matthew August 16, 2020, 11:39 am

    @aicam – ability to buy various things would change if inflation in one sector was different to another – our ability to buy consumer electronics is vastly better than 40 years ago, our ability to buy cars vastly better than it was 80 years ago, but while those things got relitively cheaper the void was filled by the cost of hired help & basics ie food getting relitively more expensive – overall inflation balances out but within there is turbulence.

    I think there is just a danger to saying “this measure covers something” when essentially its saying that the massive house price rises we’ve seen are nothing big, discouting the knock on effects for specific generations within the population – so our policy makers and maybe the public and press get a nerfed view of microeconomics

  • 59 jim August 16, 2020, 12:12 pm

    Another appreciative follower here. Like others it’s part of the routine – after Sunday brunch. Links are always decent. Cheers!

  • 60 Al Cam August 16, 2020, 1:14 pm

    As I understand it:

    a) Inflation is, by definition, a quantitative measure of the rate at which the average price level of a basket of selected goods and services in an economy changes over some period of time. That is, inflation does not reflect price paid per se.

    b) Ability to buy (Atb) is somewhat more subjective and really an attribute of an individual. Atb can be related to, amongst other things, income, preferences, etc.

    c) Affordability may be what you are getting at, as this often relates current average price for goods to some form of average salary or means. This can clearly change over time in the manner you indicate for houses, electronics, etc.

    Thus, for example, the cpi measure of inflation for six eggs is exactly the same whether a consumer chooses to purchase their eggs from their local Lidl or Harrods food hall. Thus, this consumer choice may come down to some combination of Atb and/or affordability but not inflation.

  • 61 Gizzard August 16, 2020, 1:24 pm

    I’d just like to add my appreciation of this blog. I’ve been avidly reading it since around 2016 when I first discovered the article on nine lazy(ish) portfolios. I then read Tim Hale’s book, ditched the hotchpotch of active funds I had with Hargreaves Lansdown and also ditched my IFA who was looking after my pension (doing a perfectly reasonable job, but not something I couldn’t do myself). I’ve saved £1000’s and am much happier with my resulting asset allocation. I’ll continue to visit the site (several times a week) regardless of any changes deemed necessary. Thanks again.

  • 62 Dave August 16, 2020, 4:15 pm

    Popping in to say thanks for the blog along with everyone else. Your advice has been invaluable over the years.

    Don’t give it up please. It’s a huge part of my weekend and really look forward to it.

  • 63 brod August 16, 2020, 6:06 pm

    @Matthew –

    I think you’re over thinking CPI(H). It’s a general measure. It won’t all apply to you but it should give an indication of the direction and velocity of price changes. Nothing more, nothing less. So if last year it was 2% and this year it’s 4%, the prices of the basket of goods it measures are increasing at double the rate. Maybe we should expect some fiscal tightening? (Those as passive purists, should it bother us?)

  • 64 Fatbritabroad August 16, 2020, 6:52 pm

    A further plaudit here and as others have said your blog is something I look forward to on a Saturday morning with a cup of coffee in hand.
    My first eye opener was John bogles book which was very heavy reading but totally convinced me on passive investing. This led me to this site when I was looking for more education and further convinced me to change my strategy from a large ish cash pile, over paying my mortgage and paying into my pension to investing outside of a pension as well as in one with the vast vast majority of my money now held in investments and understanding that ‘risk of loss’ is nothing to be afraid of if done right.
    As a further plaudit your series on how much to invest in your pension and isa to retire early should be up for an award somewhere if one exists. It is one of the most detailed and well written investment pieces I have read and and answered a question for me I’ve been wanting answers for a long long time

  • 65 Haphazard August 16, 2020, 7:20 pm

    Just to add my word of thanks – not sure I’d have had the guts to go it alone without all the helpful blog posts.

    One of the best things about the blog is that it caters to a wide audience, from the novice to people who already know their stuff. As a relative novice, I’ve never minded there being articles that may be a bit beyond me – it helps include everyone, and I’ve learned from other readers as well as the original articles. The room for debate and discussion adds to the credibility.

    I’d also say it’s a relief not to be able to access the blog on a proper website without the faff of passwords or social media (I don’t use the latter at all).

    Sometimes you seem quite hard on yourselves – no need for the slough of despond.
    Perhaps, post-covid, there will be an interest in insurance/managing debt – as much as investing. Is that an area you could cover?

  • 66 zipzapzoom August 16, 2020, 8:42 pm

    A huge thank you from my side as well for the enormous impact that you’ve had on my financial life. I’ve been following your blog since 2010, and Monevator has been weekend ritual for me.

    Power to you brother, keep writing, keep shining, keep winning.

  • 67 RJ August 16, 2020, 8:42 pm

    I can honestly say Monevator has been one of the most life-changing websites I’ve ever read. Guided me along the path out of consumerist/careerist hell to financial enlightenment!

    Many thanks and please continue. Would be especially interested to learn about TA’s strategy as his retirement date approaches – believe his figures and timing are quite similar to mine.

  • 68 Kristian August 17, 2020, 8:46 am

    Another messages of thanks here.
    I’ve read this blog for around 4 years and couldn’t begin to tell you the value it has brought me.

    The level is perfect, engaging enough that as a newcomer I wasn’t put off by it and in-depth and detailed enough that 4 years later I still find the posts both interesting and educational. They still introduce me to new ways of thinking and via the various contributors offer slightly different perspectives which help me find and test my own personal approach.

    Keep up the good work guys, from another very happy customer!

  • 69 LALILULELO August 17, 2020, 8:49 am

    I’m another one who wants to say thank you. It was 2016 when I found Monevator and, like some others have mentioned, it changed my life. I actually mirrored the Slow n Steady before changing to Life Strategy (now VWRL and the Global Bond Fund). You have given my family and I focus and the tools to get there. While I try not to benchmark with my peers (everyone’s situation is different and it can be a bit sneery), I am forever grateful that my financial life is in pretty good order and a huge part of that is due to this website.

  • 70 Andy J August 17, 2020, 9:01 am

    I’d just like to echo many of the comments here and say thank you for creating and curating such a great site. Monevator is genuinely a rare and precious corner of the internet. Well researched, well written, open minded, serious but entertaining, generous, practical, friendly… I could go on. As many have said it’s like a very relaxed club where people want to share and learn. And so so much better than the vast majority of finance books which are either dry as sticks or too busy telling you how stupid everyone is for not following their advice.

    Long may you continue.

  • 71 The Investor August 17, 2020, 9:21 am

    Thanks for all the incredible comments everyone. We’ve long been lucky enough to have great feedback for our work here, and as I’ve said before it’s certainly the reason why we’ve kept at it. 🙂

    The site isn’t going to go anywhere. What we’re looking to do is to find a way to make it sustainable, to better layer/curate what’s on offer here, to potentially broaden the range of what we cover a smidgeon (subject to finding the right people) and for the site to better pay its way, or ideally do much better given the opportunity cost versus all the things we’ve not done with our free time over the past decade+.

    I’ve been cautioned that now isn’t the time to go into this, so I won’t… sorry for the tease. Suffice to say that the articles that can get anyone passive investing towards financial freedom will always be the heart of what we do here. And I’ll keep doing the links on Fridays/Saturdays (ideally with some tag team support now and then.) Otherwise look for a few changes towards the end of this year and into 2021. Hopefully not too much in the way of friction for long-time readers… 🙂

    Finally the book is 96% written and has been for the best part of a year now! The delay in finishing it was mostly down to me not writing a last part I had committed to writing (I’ve felt a bit burned out to be honest, need this upcoming break!) and then us under-estimating the learning curve of self-publishing and so deciding to kick it out a year or so until we have more free time. Hopefully that time is approaching…

    It’s mostly @TA’s work and he totally ignored the brief to simply repurpose Monevator articles, which is why it took so long but is also why it’s deep and funny. I think it’s very good and different enough to justify adding to the library out there. Watch this space! 🙂

    Thanks again, not least because my new-ish girlfriend read all the comments and now better appreciates why I had 75 tabs open and was just reading the Internet when I was compiling the links on Friday! 😉

  • 72 Simon T August 17, 2020, 10:45 am

    And another round of thanks from me. The stuff on bonds still goes way over my head, but I can follow the other discussions. I will add to some of the other posts – in that I am retiring in a few months (69 working days to be precise), and there is no way I could ever have done the DIY approach without sites like this.

  • 73 Vanguardfan August 17, 2020, 12:06 pm
  • 74 Factor August 17, 2020, 12:06 pm

    @TI

    Simply to say total thanks for Monevator.

    It is your site and you must take it forward in whichever way you choose, even closing it if that is best for you but I hope that you don’t. Do what feels right for you and your life, and above all do what makes you happy.

  • 75 David August 17, 2020, 4:21 pm

    To add to the chorus (but definitely no less sincere for that!)

    Thank you for this site and the work you put in. I am in the process (not there yet!) of ditching a FA who seemed to be doing a reasonable job but was also costing 10s of thousands a year between their costs and the active funds they had me in (which changed reasonably regularly) and moving to a self managed passive portfolio. I’ve been hugely surprised by how much hand holding (even if just in terms of the “you can do it” encouragement nature although some of it has been much more than that!) I’ve needed as I go through the process and have mild panic attacks about what could go wrong. This site – and your writings especially (but also the community of commenters you’ve attracted and kept interested enough to stick around) have provided all that hand holding and more.

    Thank you. I do hope you get even just 10% of the help you’ve provided to others back as satisfaction for running this site because that alone should be enough to make you feel a never ending stream of warm fuzzy feelings!

  • 76 A. Prescott August 17, 2020, 5:11 pm

    I have enjoyed Monevator for nearly a decade…..it’s been a great source of financial education and always stimulating in its philosophical approach especially the weekend reading section.
    I hope the revamp (when it comes) works for you and us.

  • 77 MG August 18, 2020, 4:35 pm

    another massive thanks here. Found your site in 2017 and reading here encouraged me to take the plunge in getting my finances in order, slowly but surely. Have cleared credit card debts, shaved a chunk off my mortgage and have both emergency cash and the startings of S&S ISA with vanguard as a result!

  • 78 JediMaf August 18, 2020, 11:37 pm

    Another one here whose life you helped to change. 2016 my wife said we could do this FIRE thing and your site was material in convincing me she was right. It was hope in the darkness (I was in an Ermine kind of situation). Last year the trigger was pulled, and that life change was certainly for the far better. Now I look forward to the weekend reading links to help keep the old mind engaged.

  • 79 Tyro August 19, 2020, 3:14 pm

    @Vanguardfan: Thanks. I’ve bookmarked it ready for the winter.

  • 80 The Accumulator August 20, 2020, 7:02 am

    Gosh, well that was a rather lovely thread to read. I might read it again.

    Thank you all for the generous comments and for taking the time. It makes all the difference.

  • 81 Hare August 21, 2020, 10:37 am

    A rare and valuable corner of the internet indeed.
    I also second Rich #45′ suggestion of money diaries. It’s that aspect in the comments (FIRE v London, ZX, Ermine) which has super helped me work out the many unsaid assumptions in a lot of financial advice and writing (and if those assumptions don’t apply, neither does the advice).
    I send everyone here.
    It’s not just for learning about what to do for my own investing, the learning for how to manage income without employment and how that works in the real world has been found only on Monevator (often in the comments, hat tip to Ermine again). Since me and many of my friends as in the non standard income bracket, I’ve been recommending they all read those posts and the comments and Ermine’s blog.
    If anyone gets freaked out by investing, I send them over to FIRE v London’s posts on buying his property (found through this blog) so they can stress test their emotional reaction to risk and what real risk looks like and the process of working out what’s right for a person.
    As Rich in #45 and other commenters have already said, there is little out there which tells us what it is actually like to run one’s finances and financial life without an employment income or standard assumptions about pensions and earnings. Monevator is one of the few, if only places.
    Finally, none of us will get dementia hopefully with the weekly brain stretching from some of the posts here and some of the comments. ZX in particular has stretched my brain cells but I can now have free ‘advice’ from a friend about bonds because now I understand what she is talking about as she works in the bond markets.
    I apologise for previously not noticing my Adblocker was not off for Monevator, I have remedied that situation now and happy to pay for Patreon.
    Monevator is a key part of my financial security, what I have learnt here, and continue to learn.

  • 82 raluca September 7, 2020, 7:17 pm

    I’ve read your blog for at least 11 years now. Not entirely sure when I started, probably 2008, but I was certainly here for your famous 2009 “Now’s the time to buy stocks” post. March 2009, I believe it was.
    Hope you keep the site going, it’s my favorite personal finance site.

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