Our articles from this week, plus whatever else caught my eye.
From Monevator
We’ve another freshly laundered broker comparison table for you – Monevator
Lars Kroijer makes the case for DIY financial modelling – Monevator
Out of the archive-ator: How to work out which platform is cheapest for you – Monevator
News
Note: 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.1
The stock market is up, but a lot of high-end goods and assets are lower – Bloomberg
The great London property squeeze [Long read] – Guardian
Morgan Stanley predicts only a handful of robo-advisor start-ups will survive – Business Insider
Most people will have to work until 70, says the World Economic Forum – Guardian
Proof! CEOs hurt companies by playing too much golf – CNBC
Evil EU bans rip-off mobile roaming charges, but will deal survive Brexit? – Guardian
Goldman Sachs research finds ‘factor investing’ is trending – Joe Weisenthal on Twitter
Products and services
Zopa will offer ISAs from next month, but it’s set to scrap its Safeguard protection – Telegraph
Bitcoin is up 180% in 2017; £1.38 of Bitcoin in 2010 is now worth a million – ThisIsMoney
The best value SIM-only smartphone deals – ThisIsMoney
Religious ETFs are coming to the bond market – Bloomberg
Vanguard LifeStrategy 60: Two-year update – DIY Investor (UK)
Crunching the numbers on Vanguard’s new direct platform – ThisIsMoney
The People’s Investment Trust has picked its five active asset managers – Telegraph
Comment and opinion
Good investing is easier and cheaper than ever, but are lower returns the cost? – Of Dollars and Data
The West’s wealthy Millennials are right to scrounge off mum and dad – Financial Samurai
A backlash-let: Vanguard’s ‘irritating’ perch on the moral high ground – Bloomberg
Martin Lewis: The hidden thousands parents pay for university living expenses [Search result] – FT
Alternative asset allocation in retirement – Wade Pfau
If you want to invest virtuously, you’ll have to accept lower returns – AQR
Curious idea: ‘Mononational ETFs’, to enable stricter geographic diversification – Abnormal Returns
The burden of wealth (or winning the lottery…) – The FIREStarter
Is efficient market theory becoming more efficient? – The Economist
How can we buy the freehold of our flats? [Search result] – FT
Beware the pseudo-quants – The Mathematical Investor
How investors are using Smart Beta funds – ETF.com
Market predictions are a fool’s errand… – Investing Caffeine
…and beware charts that tell you what will happen next – The Value Perspective
A handful of barriers to entry are still left in the markets – A Wealth of Common Sense
High-conviction and new money purchases from the ‘ultimate’ stockpickers – Morningstar
How giant pension funds and other investors are looking for an edge – Institutional Investor
Off our beat
It’s never too early to fire someone – Lars Dalgaard
You never have time, only intentions – Raptitude
Deep trouble: How to improve the health of the ocean – The Economist
Older Americans are more Millennial than Millennials – The Atlantic
And finally
“Turning humans into space colonizers is Elon Musk’s stated life purpose. ‘I would like to think that humanity has a bright future,’ Musk said. ‘If we can solve sustainable energy and be on our way to becoming a multi-planetary species with a self-sustaining civilization on another planet – to cope with a worst-case happening and extinguishing human consciousness – then,’ and here he paused for a moment, ‘I think that would be really good.’
“If some of the things Musk says and does sound absurd, that’s because on one level they very much are. On this occasion, for instance, Musk’s assistant had just handed him some cookies-and-cream ice cream with sprinkles on top, and then he talked earnestly about saving humanity while a blotch of the dessert hung from his lower lip.”
– Ashlee Vance, Elon Musk
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- 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”. [↩]
“Yet for most under-25s the amount of their maintenance loan (for covering their living costs) is increasingly dictated by an assessment of their parents’ income.”
That’s how grants were back when only 5% of us (or whatever it was) went to uni. Your father got a letter telling him that his assessed parental contribution for the coming academic year was such-and-such. Now it’s loans not grants, but a funny sort of loan that acts as a graduate tax.
Still, almost nobody will say “Thank God, my children are bright enough to go to uni; thank God I’m well enough off to pay for part of their maintenance.” No, many would rather stamp their feet and insist that someone else pay.
On the student loans point, a further complexity that Martin does not mention is the number of children at university at once. Accepting his premise that maintenance loans assessed on parental income implies a parental contribution, surely if parents have two or more children studying at once the expected contribution should be reduced? Otherwise if you have too many children at university at once, the total notional contribution exceeds the entire parental income.
“surely if parents have two or more children studying at once the expected contribution should be reduced?” Yes, and that’s how it was in those Bad Old Days.
–“That’s how grants were back when only 5% of us (or whatever it was) went to uni. Your father got a letter telling him that his assessed parental contribution for the coming academic year was such-and-such.”–
I think it’s important to remember however, that there was no obligation to pay their children a penny, unlike Germany, where my colleague told me that children could sue their parents for not supporting them! It was an eye-opener for me. My Dad gave me a little, just enough to survive, but by my final year, he’d been promoted to senior management and my Mum started work as a secretary. My grant cheque barely covered my room and I assumed they’d been a mistake, but there hadn’t. I was the student seen rushing down to the Job Centre after my final exam to get work asap. A long time ago and I don’t regret it at all since it taught me so much. There were some sad stories though. A very bright student in the sixth form had rich parents who refused to contribute at all, believing he should fend for himself. Consequently, he got a job and worked for a few years till he could apply for uni without his parents’ income being taken into consideration. That guy ended up a Professor at Oxford, cut off all contact with his parents and never allowed them to see his children. Crazy world.
It might have been reasonable to put a duty on parents back then, when the age of majority was 21. Now that it’s 18 it would make less sense. Though it equally makes less sense to relate the size of loan to parental income. Never mind; whatever was done the Guardian would assert how terribly unfair it was. Damn near Nazi, indeed.
“That guy … cut off all contact with his parents and never allowed them to see his children”: how very sensible of him.
So, anyone here managed to make a mint on bitcoin?!
With 3 children going or having gone through Uni, my approach has been to pay for their accomodation (especially as rent in student properties is high and the length of the contract longer than required – landlords on those towns are onto a good thing!). They rely on the loans for education fees and other living costs. This seems to work quite well. The food bill at home also drops substantially when they are away! In addition, all 3 have been sufficiently entrepreneurial to generate some extra income from a variety of small business ventures. Whether they ever end up paying much of the ‘graduate tax’ on the loans in the future, or if future parental contributions will be required if and when this kicks in, remains to be seen.
Not me. Happy to be a bystander. Probably fine in principle but in practice another avenue for debt fuelled speculation.
Only eight comments. Is everyone stuck in queues at Heathrow?
Hi, I have been following the FIRE websites for about a year now – some excellent articles and great comments – thanks. What’s particularly great is to find a a group of like minded people.
Back to my reason for posting, since it’s a quiet thread. I am keen to understand how optimal my investment portfolio is (versus an efficient frontier). My investments are FTSE100 trackers, BLTs, preference shares, individual ex-SAYE type shares, P2P, DB & DC pensions – I am trying to avoid building my own covariance/correlation matrix and spending 3 days in excel (or other add in tool).
Does anyone have a ready built tool that I can easily play with to understand the errrors of my previous purchases (or how to reinvest future funds to optimise my risk/reward).
Boltt, I think that you might be asking a bit too much regarding a tool that can spit out an answer for how your portfolio compares to an efficient frontier for a number of reasons.
1. The efficient is more of a conceptual contruct that helps you think about portfolio construction than a standard to be measured against.
2. You will only get correlation data on major indexes and asset classes not down to the level of detail that you might want.
3. Correlations and hence the efficient frontier change over time and therefore yesterday’s perfectly efficient portfolio is unlikely to sit on tomorrow’s efficient frontier.
Having said all that, the best tool that I have found for playing with portfolio concepts is the site https://portfoliocharts.com/
You can happily spend hours playing with the various charts there and it has recently been updated to include UK asset classes.