I reluctantly updated a lot of the technology that runs Monevator this week. And of course things broke.
For instance, pagination and numbering has come unstuck on the longer comment threads. For now we’re either showing up to 200 comments at once on (nearly all posts) or else the most recent remainder (the broker comparison table, and a couple of old Brexit ding-dongs).
If you spot any other bugs please do let us know.
Also, as detailed below I’m going to experiment with keeping these Weekend Reading comments Covid-free.
We’ve had a great discussion here over the past few months for those who’ve wanted it. But more than a few readers feel it’s now crowding out the investing chit-chat, which is the primary reason anyone comes to Monevator.
Ideally us diehards will continue debating, but only on this older thread please.
Be warned: Given the state of travel with the pandemic and the economy I’ll likely do a dedicated virus post again at some point over the next few weeks. It’s just too important to our finances to leave off this site entirely.
But for now I’m going to have to delete Covid-related comments on this post. Apologies in advance. Please comment (even if about this new comment policy) on the other thread please.
Have a great weekend!
From Monevator
The facts of investing life – Monevator
Watch out for the capital gains tax turnover trap – Monevator
From the archive-ator: There are many ways to be an investor – 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
UK house prices jump, but a slowdown is likely says Nationwide – Guardian
Online pensions dashboard delayed until 2023 [Search result] – FT
Electrified cars just outsold diesel in Europe for the first time – ThisIsMoney
Morgan Housel’s personal finance book has been optioned for a movie – Deadline
Resetting online commerce – Benedict Evans
Products and services
Payment holidays are ending in the UK, but there are options – Guardian
Buyers snapping up ‘Instagram mortgages’ from Generation Home; can be backed by friends and family – ThisIsMoney
What if banks like HSBC started charging for current accounts? – Which
Sign-up to Freetrade via my link and we can both get a free share worth between £3 and £200 – Freetrade
Starling and Monzo are winning more current account switchers [But total numbers switching are still pitiful] – ThisIsMoney
Bitcoin has surged 87% year-on-year to highest price since 2017 – ThisIsMoney
Edwardian homes for sale – Guardian
Comment and opinion
Larry Swedroe: The importance of diversification in the long run – Advisor Perspectives
Want to get cash for your old gold? Tread carefully – The Evidence-based Investor
The sky is(n’t) falling – Retirement Field Guide
The virtues of a minimalist portfolio – Morningstar
Look under the hood to discover what’s really in your index fund – Humble Dollar
Bye-bye BTL. Enter ‘house hacking’ – Mr Money Mustache
This retirement blogger has a different definition of ‘simplicity’ to me – Rivers Hedge
What sharks can teach us about survivorship bias – Farnham Street
Radical uncertainty: why modern finance keeps failing – CFA Institute
The momentum factor may be weaker we thought [Research] – SSRN [h/t AR]
Naughty corner: Active antics
The trouble with value investing, and what to do about it – Musings on Markets
Unlikely Covid-19 winners in the stock market – Institutional Investor
David Einhorn warns the market is perilously overvalued… – ValueWalk
…but there’s a fine line between persistence and insanity in investing – AWOCS
What is the attraction of star fund managers, anyway? – Behavioural Investment
Martin Currie Global Portfolio: A little-known gem? – IT Investor
Covid and politics
Following reader feedback, we’re asking for all Covid thoughts to please go on this older thread, so today’s comments are free for investing and money discussion. Any comments on Covid here will probably be deleted. Thanks!
Never say never with Covid-19, but we’re still waiting for that predicted second death surge in Sweden – FT
UK PM considering ‘national lockdown next week’ – BBC and more BBC
How the coronavirus spreads through the air [Great visualizations] – El Pais
A Swedish care home doctor’s perspective – Sebastian Rushworth
Scientists ‘warn’ of new coronavirus variant spreading across Europe [Search result] – FT
After three months of lockdown, Melbourne has a bleak lesson for the world – Bloomberg
We must keep our heads and accept that Covid is here for the long-term [Search result] – FT
Record 200 days without a local case makes Taiwan world’s envy – Bloomberg via MSN
It may be time to reset expectations as to when we’ll get a vaccine – STAT
US states by infection rate and political affiliation [Data visualisation] – Flourish
The pandemic could end waiting in line – The Atlantic
A UK/EU Brexit deal may be back on [Video] – TLDR
Could Trump win on Tuesday despite the polls? – Vox
Marina Hyde: Behold Trump’s pre-election secret weapon: Nigel Farage, ‘king of Europe’ – Guardian
Kindle book bargains
Note: The following deals expire at midnight Saturday 31 October.
Think and Grow Rich by Napoleon Hill – £1.99 on Kindle
How Will You Measure Your Life? by Clayton Christensen – £0.99 on Kindle
Reinvention: How to Make the Rest of Your Life the Best of Your Life by Brian Tracy – £0.99 on Kindle
Just Fuck*ng Do It: Stop Playing Small. Transform Your Life by Noor Hibbert – £0.99 on Kindle
Off our beat
How the awful stuff won – NY Books
Migration experience – Indeedably
Why it’s getting harder to mine gold – BBC
And finally…
“The sucker has always tried to get something for nothing, and the appeal in all booms is always frankly to the gambling instinct aroused by cupidity and spurred by a pervasive prosperity. People who look for easy money invariably pay for the privilege of proving conclusively that it cannot be found on this sordid earth.”
Jesse Livermore, Reminiscences of a Stock Operator
Like these links? Subscribe to get them every Friday!
- 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”. [↩]
Minor one, but on my android the Monevator logo is no longer clickable, so I have to go into the menu to go to home
Just read “How the awful stuff won” … Scariest Halloween tale yet. Thanks for the links once more.
JimJim
While I’m all for an individual renting out a room to help with the bills, house hacking in general just seems like another name for the worse kind of over-leveraged family home to HMO converting parasitic slumlord game we saw in the 2000s here.
I appreciate it doesn’t have to be this way, of course – and that there are many responsible and caring landlords providing a quality service…
Typo: “We’ve had a great discussion hear over the past few months” should be “here”.
Yup, the curse of the technology update strikes again!
And to think, only two days ago I was complementing MONEVATOR (vs ERN) for how you conveniently number all of your comments.
Best of luck with recovering this, IMO, very useful feature.
I’ve still got numbered comments, on an iPad (in fact no discernible difference in experience, other than the dark threat of deletion 😉 I’ll be good I promise)
@all — Thanks for the feedback. Typo fixed! Numbered comments still here because we’re using that workaround of removing pagination of comments that I mentioned in the post. Not sure what the long-term fix will be.
RE: House hacking, I *wish* I’d been able to buy the house I lived in with a best friend from 2007 to c.2018. His rent would have pretty much covered the mortgage. Of course this was my plan also back in 1996, when renting a room to a friend even at mate’s rates would have bought me a two-bed flat in a rapidly gentrifying bit of Clapham.
Sadly I couldn’t get access to finance at either of those points! 🙁
I think that’s where the big and arguably most culturally beneficial win (too) is for house-hacking… young people building up equity who would be sharing anyway.
Sadly though, only those with wealthy parents are likely to get access to financing to do it in much of the UK (though see the ‘Instagram mortgage’ story in the links).
Perhaps there’s a role too for old people renting out a room of a big house their loathe to sell. It’d be nice to make better use of those bigger half empty houses. But that’s not going to be for everyone, even if it does make financial sense.
I can’t believe this critical link is missing. Clearly articulates the dangers of all you can eat buffets on your finances.
http://www.thisismoney.co.uk/money/experts/article-8864203/amp/My-wife-charged-extra-Brewers-Fayre-shared-breakfast-right.html
Sorry, I couldn’t resist including this. Such a stupid article but for some strange reason it really made my week, maybe it was some of the comments….
I think that house hacking is one of the best strategies out there. As MMM mentions it is hardly a new thing. My parents took in lodgers back in the late 60s onward to help pay the mortgage. I did the same when I bought my first house and it made a huge difference to my standard of living to have that extra income particularly with the Rent a Room tax break. I regret not doing it with my current home as it would allow me to save a lot more towards FIRE. The key is to keep the strategy in mind when you are looking for a property. Try and find somewhere suitable: bedrooms without common wall (eg bathroom in between); separate lounge and dining room if possible to permit spreading out; granny flat; duplex properties etc.
If I were a young person today facing high property prices my approach would be some form of house hacking combined with a career that allowed me to live in a cheaper area while still earning relatively decent money. I think those who choose this strategy have the best shot at accumulating wealth and getting to a position to FIRE other things being equal.
Evening. If all those who felt that investing discussion had been crowded out could now pile in with some pithy observations about anything financial in the links, it’d be much appreciated.
Because to be honest I’m not seeing much evidence of that so far today! 😉
Read the house-hacking post from MMM with interest. As a Young Professional who bought a flat a bit over a year ago, a few months back there was an opportunity to move in a good friend (who I have lived successfully with before) as a lodger. From a financial perspective it would have been a great move, I could have covered a good proportion of my mortgage while still offering him ‘mates rates’. But I just couldn’t face it. I bought a two bed flat to myself for a reason – British housing is cramped and I wanted space for all my stuff (I’m guessing that makes some more minimalist monevator readers cringe), but more to the point so that I can have space to make a mess or just enjoy my own company, perhaps that just betrays some of my more introverted qualities.
As we face down more lockdowns, maybe not a perfect choice, but one I’m happy to live with.
I found Larry Swedroe on the importance of sticking with your asset allocation strategy particularly pertinent. Like many investors I have a specific allocation to global commercial property. In a way it’s an active decision to tilt away from pure passive investing. The sector has of course been hammered by covid. I’ve dutifully rebalanced, but with no enthusiasm. What if WFH really has fundamentally unmoored the sector for good? Am I cannily buying temporarily beaten down stocks or am I buying up quill pens when the guy down the road has just invented the printing press? Endlessly rebalancing into a sector that makes up 5-10% of your portfolio but which is *never* coming back would hurt. So would selling low to chase hotter sectors. Tricky.
@mousecatcher007… Only just finished the last round of balancing and now its all skewed and will be more when markets react next week. Don’t have any comment just agreement.
I think I will keep on keeping on.
The thing saving my sanity is knowing, people on this site, with far more experience and skills that myself have similar challenges.
I eagerly read the comments…..
Insta-mortgages piece is fascinating. I scanned the article and website but it’s still not clear who is on the other side of the loan. Is there an actual bank underwriting the loan or is this startup immediately selling the loan on to someone else?
Also this sure raised my eyebrows:
> The lender monitors the value of your home in real time, and offers the option of linking up banking details through secure open banking to enable it to monitor changes to income and affordability.
What is the incentive to share your spending data in real time with the lender?
Good on them for squeezing the last drop of juice from the UK housing crisis though. (Pith!)
Rebalancing – I’ve been struggling with this one in relation to my UK allocation.
For some time I’ve thought I should have less of a UK bias, but then I think ‘I’m probably only thinking that because the UK is underperforming’ and ‘I’m just falling into the known behavioural bias that leads us to sell low’. So I’m dithering and fudging. Can’t even decide what the new allocation should be.
The rivers hedge blog made me smile. I have the same reaction as I do when ZX makes his (very pertinent) points about liability matching and future inflation/cost of living trends.
I conclude we need more simplicity, not less. The key requirements for successful retirement finances seem to me to be adaptability, a healthy surplus and a large dose of luck (mainly concerning the particular historical period your retirement spans, and your health). If there is anything on your plan calculated to more than 2 significant figures, don’t expect it to be accurate.
Oh, and it seems I can no longer save my login details or subscribe to comments (well I can, but they don’t seem to appear, even as junk).
@Vanguardfan:
A good old phrase, often credited to Keynes “I’d rather be approximately correct then precisely wrong”.
Decimal places indicate resolution and never accuracy.
Sad git that I am, I bookmarked the Rivers Hedge blog for some further browsing in due course.
Thanks. Is anyone else having this difficulty? People seem to be commenting under their usual IDs so I’m not sure exactly what the problem is. (The trouble is I have a different experience to readers as I’m always logged in as an editor).
We fixed the masthead — now clickable again, cheers!
@Vanguardfan – I too love the quote, so did some sleuthing. It seems to come from the late-19th early-20th C eminent logician Carveth Read. You can read his wise words here: http://www.gutenberg.org/files/18440/18440-h/18440-h.htm. The actual quote is: “it is better to be vaguely right than exactly wrong.” Like many words of wisdom it gets ascribed to all sorts of people. As with “Prediction is difficult, especially of the future!”. I have seen this referenced to both Yogi Berra and Niels Bohr. There can’t be many other things that link those two.
@Vanguardfan:
Seems that Rivers Hedge broadly agrees with your “key requirements for successful retirement finances”.
His take being “Getting into a “close enough zone” and being willing to adapt are stronger and less burdensome concepts than getting it exactly right”.
However, he just seems to revel in exploring things with complex/fancy maths and/or economics simulations and colourful charts, see:
http://rivershedge.blogspot.com/2020/08/being-in-zone.html
which he later in the article describes as being “mostly unnecessary”.
> “Getting into a “close enough zone” and being willing to adapt are stronger and less burdensome concepts than getting it exactly right”
Is perhaps a mantra for life, not just FIRE.
There is one main post from Monevator which enabled me to achieve FIRE (along wit the large chunk of luck in that the strategic position was good though the tactical place sucked bricks). It was the if not now, when post
The rest – not so much. It assisted by changing how I thought about it and the possibilities. All the calculation and theory – not so much. Heck, I’m not even a passive investor. It doesn’t matter.
To be successful at FIRE you have to remain adaptable, and you must be changed by the experience. You must be a traveller in the journey of life, not a tourist. That’s the trouble – some of the assumptions you make about work and how you solve the conundrum of paying for your wants/needs are set early in life, often before you start working. And if these defaults stay set then you are likely to run into trouble. FI is a philosophy, not just a skill…
The elephant is already in the room. Diversification is certainly an insurance policy for whatever happens next. I decided early summer to move around half my position into the LifeStrategy funds to stabilise a few things including some mental energy. Slightly nervous of Q4 and last week’s falls possibly a sign of things to come. The rest I’m still happy to be more active in and around ITs and a few choice thematic ETFs.
If it all goes tits up in the next few weeks I’m ready. Well. Sort of.
I’m just seeing if I can subscribe to comments on my phone. It does save my login details at least so fingers crossed.
I thought I’d leave a comment to test Vanguardfan’s phone method.
I’ve just been watching Dr John … Oh that’s not going to be welcome.
Err.. just finished an interesting read of John Baron’s updated book on investment trusts. That’s lead me back to re-reading some of Greybeard’s posts on ITs and has got me lining up some more potential purchases if the discounts widen. 159F – I think there’s a few of us with our finger on the trigger waiting for the sales season 😉
Thanks to Greybeard too, only now am I appreciating his wisdom on this area.
I think that house hacking / having lodgers does a great service to the community – it provides a service in the form of housing and makes better use of the space that is there. The quality of the accommodation and the price should be determined by competition – in a hot housing area where space is precious we must be grateful for what we can get on a budget, and if that wasn’t available at all the supply would be even worse. If people end up living in overcrowding, that might put pressure on the population to not increase so quick – I believe it does already to some extent – poor families that are financially stressed and lacking space are more likely to be cautious about extra children, even may be less fertile due to the stress. When mankind, like any animal, reaches the maximum population an area can support it was never going to be pleasant, but if it were then population growth would never stop
@passive Pete. No joy on the phone, although it does tell me I am subscribed to the post, no comments come through.
@vanguardfan, same for me. Confirmation that I’m subscribed to the entry, but no update received 🙁
@Passive Pete @Vanguardfan — Are you saying subscribe to comments works from desktop but not on the phone? Again it’s not a feature I have any experience of. 😐
@TI
No, it doesn’t work on either – when we first post to a thread then there’s a tick box to opt into receiving updates via email. Tick that box and we see a message underneath the comment section saying, “You are subscribed to this entry”. Usually, we’d then receive an email notifying us of any new comments to the thread. Currently, we’re not receiving the email.
I used my phone for the first two comments and just tried my desktop for this one – and it recognised that I was subscribed to the entry too. So the opt-in seems to work, but the email update isn’t.
Hmm, thanks. Will have a poke around.
@mousecatcher. Holding commercial property isn’t necessarily an “active decision to tilt away from pure passive investing”. Your passive benchmark is the portfolio of assets whose long-run performance best meets your long-term goals. It’s a fallacy to think a passive portfolio is just govt bonds and equities.
So the question is: how does commercial property help you achieve your long-term objectives? What liability is this helping to hedge? If you can answer that then all good. If you can’t then it was never part of your passive benchmark. It was an active tilt and all active investments should have a defined timeframe, take profit and stop-loss. If you never cut an active trade, the portfolio will never return to it’s passive benchmark weighting, and you undermine the whole concept.
It’s interesting to consider how events that 15 years ago would have been hard to contemplate have now become normalised. I appreciate that’s always the way. And so the prospect over the last 24 hours of expanding the quantitative easing programme by another £100 billion as we disappear further down the rabbit hole barely raises a flicker of interest. And yet, assuming this goes ahead, the QE programme in the UK will be bearing down on a £1 trillion. Why not look to go the whole hog, monetise the entire debt and eradicate it from our balance sheet and then it’s all good. Hmm looking back over history that’s been tried before. What does seem clearer is that we continue to move further and further away from the principles of sound money and accordingly the medium term risk of being over weighted in cash seems to increase therefore.
@TI, on the iPad it doesn’t save login details or whether you have subscribed. On the phone it does both of those. But no emails. I don’t use my laptop for monevator.
@Vanguardfan — The mobile uses a different theme to desktop (which is probably what’s running on your iPad) so that makes sense. Thanks for the feedback.
Something that I think is an error, but might not be: all of the dates on the “Related” links at the bottom are the same (on mobile, at least), and they’re always the date of *this* article, not the date of the related article (and it’s been this way for a while, this isn’t a recent change)
@Nick — Hmm…thanks for the feedback… not sure if that’s the plug-in or something we’re doing wrong.
Don’t set up a website, that’s my advice haha!
@all @Vanguardfan @PassivePete — Okay, subscribe to comments should be fixed now.
But there’s more!
I’ve finally got a solution implemented that enables you to sign-up to receive comments on an article without having to make a comment yourself. There’s an email confirmation that needs to be clicked to confirm (so nobody’s inbox gets spammed after a malicious signing up by their nemesis) but otherwise pretty straightforward. 🙂
If anything doesn’t seem to be working, please shout. Cheers!
Yes thanks – that’s worked.
Yes! And a ‘subscribe to comments’ without having to think of a pertinent contribution- I am truly in heaven.
Many thanks…