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What caught my eye this week.

How many more billionaires would there be if the millionaires of yesteryear had embraced passive investing1 and saved themselves a bundle?

That’s the provocative opener in this short video from Robin Powell, the man behind The Evidence-based Investor blog.

Sensible Investing in a Nutshell with Victor Haghani of Elm Partners - YouTube

Robin’s subject – Victor Haghani of fund manager Elm Partners – makes plenty of sensible points about keeping costs low and investment aims simple. The video is a nice five-minute introduction to the case for passive investing.

However the class warrior in me is rather glad that the super-rich continue to pour billions into expensive hedge funds.

If we’re to ease wealth inequality, we certainly don’t want the 1% to care as much as us about getting their fees under 1%!

From Monevator

Make sure you understand your investments – Monevator

From the archive-ator: Creating an emergency fund – Monevator


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.2

No plans to scrap 1p and 2p coins, says Downing Street – Guardian

Auto-enrollment contributions to be tripled for millions [Search result] – FT

London slump shrinks North-South divide in house prices – Guardian

Bank of England warns Brexit could still rock the City – ThisIsMoney

Over $60 billion wiped off the value of crypto-currencies in 24 hours – CNBC

Phillip Hammond eyes new Patient Capital EIS funds [Search result] – FT

How the financial crash made global cities unaffordable [Search result] – FT

Products and services

NS&I bumps Junior ISA rate up to 2.5%, but eight providers pay more – Telegraph

The case for prize draws, Premium Bonds, and lottery tickets – ThisIsMoney

Why is antique furniture now so cheap? – Marginal Revolution

Fees and returns: A brief history, from equities to Bitcoin – Bloomberg

There are 21 investment trusts on the new Dividend Hero list – ThisIsMoney

P2P player LendInvest launches retail bond paying 5.375% – Telegraph

The Echo Dot is £10 off at Amazon right now – Amazon

Comment and opinion

The tipping point: When compound interest starts to motor – The Humble Dollar

Growth and value stock indexing are both broken – Bloomberg

A $500 a month allowance saved our marriage – Slate

What real return should (US) bond investors expect? – Charlie Bilello

Infrastructure funds on the road to uncertainty [Search result] – FT

The pros and cons of ‘bucket’ strategies [US but relevant] – Retirement Cafe

Pursuing understanding in a messy, polarized world – Abnormal Returns

Real estate will always be more desirable than stocks [US but relevant] – Financial Samurai

Steve Webb: What’s an acceptable pension pot to retire on? – ThisIsMoney

Into the woods – SexHealthMoneyDeath

When value goes global [Deep factor geek-out] – Research Affiliates

Thinking the unthinkable about corporate and government bonds – The Macro Tourist

Kindle book bargains

Black Edge: Inside Information, Dirty Money, and the Quest to Bring Down the Most Wanted Man on Wall Street by Sheelah Kolhatkar – £1.99 on Kindle

The Spider Network: The Wild Story of a Maths Genius and One of the Greatest Scams in Financial History by David Enrich – £1.99 on Kindle

The Man Who Owns the News: Inside the Secret World of Rupert Murdoch by Michael Wolff – £0.99 on Kindle

Off our beat

Making it look easy is hard work – A Wealth of Common Sense

Inside the booming market for Spotify playlists – The Daily Dot

The man who knew too little – The New York Times

Worms, glorious worms – 3652 Days

And finally…

“When he died in 1525, his fortune came to just under 2 percent of European economic output. Not even John D. Rockefeller could claim that kind of wealth.”
– Greg Steinmetz, The Richest Man Who Ever Lived: The Life and Times of Jacob Fugger

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  1. Of course they couldn’t, over the time period discussed in the video featured here. Which isn’t just pedantry – it’s very possible that making investing easier and cheaper has reduced the expected returns for equities and other assets going forward.
  2. 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”.
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Consumer champions like ThisIsMoney and Money Box regularly report on people who’ve come unstuck with an investment scam, pseudo-bond, or other moneymaking scheme.

These media outlets do a good job highlighting dodgy financial advice – and outright scammers and crooks.

But too often it appears that neither the punter nor the journalist is aware of the investing risks that were being taking by these hapless members of the public, even when a particular scheme was legal.

Typically the victim – Phil, a 52-year old school teacher, Camilla, a 33-year old care worker, or Basey, a 19-year old student – doesn’t seem to have thought very hard about where they were putting their money.

They wanted easy gains, and they brushed aside any thoughts of investing risk.

I’m not saying there aren’t criminals after our money. Even the legitimate financial services industry has its sharks.

But we have to take responsibility, too.

As I look at the doleful portraits in a newspaper story about an investment scheme gone wrong – perhaps a ripped-off stay-at-home mum miserably holding a tomcat, and being hugged by a supportive but excessively bearded spouse – I have some sympathy.

But often only some.

Many people seem to spend more time deciding how to cast their vote for The Voice than they do thinking about investing their money.

And their aspirations can be crazy:

  • “Sure, buying farmland for £10,000 that in two years will be worth £100,000 when it gains planning permission seems like exactly the sort of brilliant investment opportunity I deserve – and that should just fall into my lap via a cold phone call!”
  • “I don’t know much about platinum mining in South Africa, but I like the sound of 15% a month!”
  • “I work hard! Why should I accept 1% a year in a rip-off cash savings account when I can get this Triple Enhanced Gilt-Reinforced Trusted Society Bond paying 10% with just some technical small print about my capital being at risk?”
  • “Better than Bitcoin? Make mine a double!”

Such foolishness makes it harder for the rest of us.

Perhaps even worse is their tendency to go all-in with their life savings.

Never go all in. Assume every investment can fail you.

I wouldn’t even put all my wealth into the behemoth of trust that is Vanguard.

Yet some of these people will apparently sign everything over to a stranger who knocks on their door on a Wednesday night.

One investing risk or another

I’m probably being mean. It’s often pointed out that people who fall victim to scams often do so because they’re otherwise sensible who didn’t realize they’d wandered into enemy territory. In other areas of their life they’re competent, and that breeds a complacency.

There but for the grace of the regulator go I, and all that.

Yes, there are people with a lifelong history of chasing unicorns and rainbows to a steadily impoverishing affect. I’ve met a few.

But other people were just trusting or naive at exactly the wrong moment. The world would be a sorrier place if it was only populated by grizzled financial survivalists like us (I assume every investment I make can fail) who are always looking over our shoulders.

Also, frauds are one thing, but the investing risks that catch people unawares are subtler. Often the promoter transforms a visible risk into a hidden risk, and the mark is none the wiser.

You remember my slightly tongue-in-cheek first law of investing?

“Investing risk cannot be created or destroyed. It can only be transformed from one form of risk into another.”1

And so Phil, Camilla, or Basey sees one risk, but ignores another:

  • Scared of the risk of inflation, Phil invests in a higher-yielding offshore bond, not realizing it’s held in a different territory or that he can’t get his money out with less than 12 months notice.
  • After reading about expensive markets, Camilla resolves to start investing in supposedly safer stocks like utilities for the steady dividend, but is oblivious to newspaper reports about tougher government regulation and politicians threatening re-nationalization.
  • Terrified that High Street banks might go bust, Basey opens a peer-to-peer account and looks forward to a higher returns, but is surprised when struck by bad debts.

The fact is all investments are risky and can lose you money.

If you can’t identify the risk with an investment in advance, you shouldn’t go near it.

Types of investing risks

There really are innumerable ways for things to go wrong, so please see my bluffer’s guide to the main risks.

Then, next time you consider making an investment, think about which of these risks you’re taking, whether you’re comfortable with it – and whether there’s the potential for sufficient rewards to compensate.

Remember too that if something has an 95% chance of success, it wasn’t necessarily a scam if it fails. You could have just been in the unlucky 5% of dice rollers.

Risky business

The presence of risk does not mean an investment is a bad one. All investments have at least some risk.

What matters is whether price is right for the risk you’re taking, whether you can afford to take that risk, and whether you understand what you’re getting into.

As the great investor Charlie Munger says:

“Tell me where I’m going to die, so I won’t go there.”

Let’s be careful out there.

  1. I’m convinced I was first to coin this as a play on the law of thermodynamics, incidentally. I have recently seen it credited to someone else on the web who first used it long after me. Anyway, I am not ripping them off and I assume them not me. Great minds and all that!
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What caught my eye this week.

I answer comments on old posts every day on Monevator. A great many ask whether investors should still own bonds, given rates are “sure” to rise – and hence bond prices fall.

In the UK it’s still mostly an academic question. But US yields have been going up fairly swiftly. The Federal Reserve has been raising interest rates, and there are more signs of higher inflation in the US, too. Bond prices have fallen as a result.

My reply is usually some mix of the following:

  • Your bonds are there to cushion big share price falls, not to provide a huge return in themselves.
  • People have been predicting a bond bear market since 2009 (and in truth before that).
  • But inflation (and hence lower real returns) is what really kills you as a long-term bond investor.
  • A moderate correction that sent bond prices lower and yields higher would be good for long-term investors.

That last point is the hardest for people to accept. We’re so conditioned to obsess over the level of the stock market, for example, it’s easy to miss the importance of reinvesting and compounding returns. The same is true with bonds.

This week Sellwood Consulting wrote a very clear post explaining why bond investors shouldn’t fear rising rates. It is about US bonds, but the same logic holds true in the UK.

If you own bonds and yields rise, the value of your bond holdings will indeed fall. But thereafter you can look forward to a higher yield, and over time reinvesting this in now cheaper bonds can be more valuable.

Don’t hold too much in bonds, though. Not because they are super-risky – but because they’re not!

If you’re a long-term investor, being overly cautious can see you miss out on much higher returns. Michael Batnick explains why in his Irrelevant Investor blog this week.

Happy reading!

From Monevator

Gold as an asset class – Monevator

From the archive-ator: What does mark-to-market mean? – Monevator


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

Pensions cold calling set to be banned by June [Search result] – FT

Coinbase is launching a crypto index fund. US investors only for now – Coinbase

MPs call for ISA simplification [Search result] – FT

Nimble schmimble: Most hedge fund money is held in giant funds – Bloomberg

Emerging market investors fail to reap benefits of GDP growth [Sorry, search result not working for this] – FT

Great chart of the history of the US 10-year bond yield, the global benchmark – via The Reformed Broker

Products and services

Monzo, Atom, Revolut, and Starling: A guide to digital banks – Telegraph

NS&I has cut rates on two of its popular products – Telegraph

Get the most out of the free pensions help sessions for the over-50s – ThisIsMoney

LendingCrowd’s P2P rates start at 5.6%; capital is at risk – LendingCrowd

Why it’s so hard to invest with a social conscious [US products but relevant] – NYT

Is this the beginning of the end for closet trackers? – Evidence-based Investor

As a rate rise looms, it’s time to fix mortgage repayments – Guardian

The key upcoming changes to the VCT and EIS regimes – Telegraph

Fitting a new flat? Grab two Sonos One speakers for just £350 – Amazon

Comment and opinion

10 ways to safeguard your savings income [Search result] – FT

How extreme frugality enabled one couple to retire early – Guardian

Unpicking the pension allowance taper – 3652 Days

The winners write the history books – A Wealth of Common Sense

The five types of retirement – Get Rich Slowly

Misfits, outcasts, criminals, financial professionals – A Teachable Moment

Would Buffett’s index tracking bet have paid for deaccumulators? – I.I.

The case for selling shares in AstraZeneca – UK Value Investor

All growth stocks end up in the same place – Gannon on Investing

Why Oscar winner Get Out resonates with value investors – The Value Perspective

Fear and greed are undefeated – The Reformed Broker

Off our beat

Bitcoin is ridiculous. Blockchain is dangerous – Bloomberg Businessweek

Chuck Feeney: The billionaire who gave it all away – Irish Times

The Boring Talks: The Argos catalogue [Podcast] – BBC

Jerry and Marge go large [Lottery hacking] – Huffington Post

James Altucher talks to Jim Cramer [Podcast, naughty step] – James Altucher

And finally…

“The next bear market is sure to test the resolve of existing shareholders, but it will also – just as certainly – provide an opportunity for savvy trust connoisseurs to pick up bargains as trust discounts widen once more. For the forearmed investor, a crisis is an opportunity, not just a threat.”
– Jonathan Davis, Investment Trust Handbook 2018 (FREE on Kindle, saving £24.99!)

Like these links? Subscribe to get them every Friday!

  1. 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”.
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There’s not much else in investing that’s like gold. Companies listed on the stock market come and go. Currencies come and go. Heck, countries come and go!

But you’ll find gold in the Bible, and even before that.

I suppose it’s possible that in the year 4018 we’ll still be comparing this Vanguard tracker fund to that iShares version. But don’t hold your breath.

Of course, presuming scientific progress continues apace we’ll probably be able to make all the gold we want by then in our own 3D printing machines, as easily as making toast today.

This may put a distant Best Before date on two of the great virtues of gold – its relative scarcity and its peerless immutability – for anyone looking to invest over the next few centuries.1

On the other hand, alchemists have been trying to turn mundane matter into gold for millennia, and they didn’t get very far.

Had they succeeded they presumably would have crashed the gold price anyway – in the same way rampaging conquistadors in the Age of Discovery caused spiraling inflation in Spain when they sent back ships full of silver.

I told you these metals had history.

Gold: The barbarous relic

If this topic already strikes you as absurd in a discussion about modern investing, you’re not alone. Many investors hate the very idea of gold.

People have been digging up, fighting over, and reburying gold at vast expense for thousands of years. In that time it has done little for us save fill a few teeth, adorn the toilet seats of oligarchs and a certain US president, and play a modest role in electronics.

Yet gold continues to be coveted. And that alone is what gives it its great value.

Owning gold earns you no income. Shares pay dividends – or at least the promise of future dividends – and property and bonds pay an income, too. Even cash in the bank earns you some interest.

But gold pays zilch. If you buy one ounce of gold today and keep hold of it, in 100 years you’ll still have one ounce of gold. Gold doesn’t grow like a fruit tree or send you cheques in the mail. It just sits there. Looking shiny.

Worse, gold costs you money to keep it.

Because gold is expensive and easily transported – another of its benefits, actually, especially in a Mad Max societal breakdown scenario – it’s easily stolen.

This means gold must be kept under lock and key. And that costs money.

We can break down the cost of owning gold into two components:

  • The direct cost of owning gold (fees to buy and hold, insurance, retaining your own gang of armed thugs et cetera)
  • The opportunity cost of owning gold instead of cash (that is, the income you forego by having your money in gold instead of cash or bonds)

All assets come with these costs to varying degrees. With gold they loom larger.

Gold fingered

Another thing to remember is almost all the gold ever extracted is still out there somewhere.

Gold isn’t a commodity like oil or wheat that’s consumed. Its resistance to decay means gold stocks are always increasing, albeit slowly and with some lost in rotting hulks beneath the waves or forgotten under mattresses.

  • When the price is high, gold comes out of the woodwork, as ordinary people cash in the gold trinkets or jewelry they have around the house.
  • When the gold price falls, people forget about it. (And gold enthusiasts blame a global conspiracy.)

Gold price advances and declines can run for decades, with little apparent rhyme or reason.

The following chart shows the gold price in dollars2 over the past 100 years (in log format, which is the best way to view long-term charts):

Gold price since 1915. (Click to enlarge).

Source: Macro Trends.

That looks great, but remember two things. Firstly 100 years is very long time. Secondly, inflation eroded the value of a dollar over that time.

Here’s the same chart showing real returns (that is, adjusted for inflation by deflating using the US consumer price index):

Gold price, inflation-adjusted. (Click to enlarge.)

Source: Macro Trends.

We can see that gold has broadly kept – and even slightly grown – its value over the past 100 years after adjusting for inflation. But the ride has been very rocky, and there have been many periods where you lost money in real terms in gold.

How enthusiastically the typical investor will talk about owning gold probably depends on where they bought (and perhaps sold) on this timeline.

You might retort that the FTSE 100 index of shares didn’t make much progress following its year 2000 peak, say. The index was still underwater 15 years later.

True, but remember you would also have received regular dividends from your stake in the FTSE 100. Had you reinvested that income back into the index over time, you were up nearly 70% on your 1999 position by 2015.

In contrast, whether or not gold is in the doldrums you get paid nothing. In fact you pay to keep your dwindling pot of gold safe and secure.

Reasons to own gold

You may ask why anyone would own gold, given all these drawbacks? There’s a lot of stuff we used to do religiously that we don’t do anymore. Should hoarding gold go the way of other out-of-date wisdom, such that business about coveting your neighbors’ ass?

Views differ, to put it mildly. Respected passive investment writers such as Tim Hale and Lars Kroijer tell you to skip gold. Warren Buffett, the greatest active investor of all-time, also thinks gold is pointless.

But not everyone who invests in gold is a moony-eyed maniac longing for the return of the Aztec empire. These sober gold owners have three good reasons to hold gold:

Store of long-term value – Gold is often touted as retaining its worth against the ravages of inflation. Gold doesn’t pay an income, but over the long-term the price has risen and that’s preserved purchasing power. You will hear folksy anecdotes about an ounce of gold always being able to buy a decent tailored suit, for example. More rigorously, respected researchers such as those behind the Credit Suisse Global Yearbook3 have found that gold has on average been resistant to inflation in developed markets over the long-term. But beyond keeping its value, real4 returns have been small to non-existent, depending on your country, and there have been long periods where gold was underwater. Gold does not move in lockstep with inflation – not even when measured over years. Some people argue the price is so erratic it’s useless as a protector against inflation, since it cannot be relied upon.

Asset of last resort – Such gold skeptics would not include anyone unlucky enough to live in a period of hyperinflation for their economy. To a middle-class German in the 1930s – spending their wages in bundles of paper notes from a wheelbarrow before they become worthless – quibbling over a few percent of return might sound ludicrous. Similarly, German Jews couldn’t take much with them when they fled the Nazis, but gold could be hidden in a coat or shoe. Inflation-protected government bonds probably won’t cut the mustard at the end of the world, but the precious metal might still buy you safer passage. (Cynics say you need guns and baked beans (and a can opener) in that dire scenario.)

Gold is not very correlated with shares and bonds – I mentioned the gold price is erratic. It’s also, historically, shown little inclination to pay any attention to what other asset classes are doing. This almost makes gold the Holy Grail of investing – a non-correlated asset that can improve diversification and potentially cushion your portfolio – except for its very low expected returns. Your gold may or may not crash when your shares or bonds do, but it could equally well fall when the rest of your portfolio rises – and all without any great confidence of a good long-term real return. Still, you could get a rebalancing benefit from tinkering with your positions over time.

Notice how the correlation is lowest with important assets like stocks and bonds.

Source: GBI Gold / Bloomberg / Erste Group.

For most people who want to own some gold, these factors point towards it being an emergency or insurance asset, rather than a big holding. Having 3-5% in gold won’t do your long-term returns massive harm if you’re unlucky enough to own it through a long gold bear market – and it may come into its own in a crisis.

But as I say, views differ, and some investors own a lot of gold. One interesting low-volatility model allocation – the Permanent Portfolio – mandates a massive 25% holding in gold.

Also, true gold bugs (don’t call them that to their face) would argue even 100 years of return data is deceptive. They’d note all paper money (like our pounds and dollars) has eventually failed in the past – yet people still value gold today.

There’s no definitive answer. As I said, gold is strange like that.

Perhaps the best metric is how do you feel about it? If you’re drawn to gold and you’re happy to pay for it, then no doubt other people are, too. Buy a little.

If you’re repulsed by gold, don’t feel guilty about skipping it. You’ll do fine. Probably.

How to hold gold

Should you decide to you want to own some gold, you’ll need to decide how and where. Because another weird thing about gold is there’s a lot of choice.

Gold ETCs are the easiest way to get exposure to the gold price. ETCs (Exchange Traded Commodities) are just another kind of ETF. They are cheap to buy and the ongoing costs can be as low as 0.2% or so. That’s good value compared to what your grandparents would have paid to store gold in a bank vault, but it’s still a non-trivial drain if the gold price goes down or sideways for 20 years. Both synthetic and physical forms are available. Physical gold ETCs are backed by bullion. A synthetic ETC does not own any gold, just derivatives linked to the gold. (It may be cheaper, but if you want to ask a gold bug whether a synthetic ETC is the best way to get exposure to the benefits of gold – duck!)

Services like Bullion Vault5 and the Royal Mint bring you a step closer to physically owning gold. They have hoards of it in big safes. When you buy gold with them, a ledger records that you own a certain amount of that physical gold. Invest more and the ledger moves accordingly. Because the gold never leaves the bunker, it doesn’t have to be re-tested for purity, which saves money compared to taking physical ownership. But the services do stress this so so-called ‘allocated gold’ is still legally your personal property. Bullion Vault’s gold for example is held in vaults in various locations around the world, separate from the balance sheet of that company. If it goes bust, the gold should still be yours rather than, say, fair game for an administrator. Hold gold offshore and you may even have a back-up asset against shenanigans at home with your currency or your government if things turn nasty. Whether you’ll be able to access gold you stored in Zurich in the Zombie Apocalypse is debatable. (See an older article I wrote about Bullion Vault).

Physical gold bars, coins, and jewelry are the old-fashioned way to hold gold. In theory, pretty simple – buy something gold and keep it. In practice there are complications. You will have to bear the cost of holding, securing, and insuring your gold yourself. While it might be an acceptable risk to have a couple of gold coins hidden in your shed, beyond that it’s a security risk. Then there’s actually buying gold. You can’t just take somebody’s word the coin they’re selling is made of gold (for all I could tell it could be made of chocolate). This means every time gold changes hands it must be tested for purity (assayed), which costs money. Some forms of gold may also have value beyond the metal (notably jewelry) but do you have the expertise to assess that? On a more positive note, holding your own gold is the only way to go if you want it for when society breaks down. You’ll presumably need it to be accessible in a world without the Internet and scheduled flights. There can be tax advantages, too, if the coins you buy are UK currency – British gold sovereigns, for instance – so do your research.

Buying shares in gold miners gives you exposure to the gold price. However it also brings in a lot of other kinds of risk, such as management and market risk and exposure to other commodity prices (mining for gold uses vast amounts of energy). Gold miners are cyclical, and most people will do poorly trying to trade them. You could consider buying a specialist fund that invests in gold miners, but this is active investing and so you almost certainly shouldn’t.

Taxes are a whole other area to consider. Gold and taxes is an article in itself. In short gold ETCs can be held in ISAs and SIPPs and ideally you’ll want to do so, to avoid capital gains taxes on any gains when you sell. Gold platforms may enable you to wrap your gold in a SIPP, but as far as I know not in ISAs. As I say, some gold coins are capital gains tax free, but coins cost you more to buy and sell, so don’t think you’re going to day trade gold sovereigns.

Probably the best thing to do if you want some exposure to gold is to buy it, hold it, and do your best to nearly forget about. You might only need it in an emergency. Sort of like when you buy travel insurance.

If it never pays you to have bought gold, then you probably lived through happy times. Who cares then if your gold did nothing?

  1. Improving man-made competition is already a good reason to avoid plain diamonds as a store of value, in my view.
  2. Like most commodities, gold is invariably priced in dollars.
  3. See the 2012 edition.
  4. i.e. Inflation-adjusted.
  5. Affiliate link.
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What caught my eye this week.

The cheque has been in the mail for several years now. But in his latest annual letter, Warren Buffett officially declared victory in his $1 million bet that an S&P 500 tracker fund would beat a bevvy of hedge funds over 10 years.

Not that the fund managers will mind – they’ve mostly gotten rich over the decade, too.

As Buffett notes:

Both the fund-of-funds managers and the hedge-fund managers they selected significantly shared in gains, even those achieved simply because the market generally moves upwards. (In 100% of the 43 ten-year periods since we took control of Berkshire, years with gains by the S&P 500 exceeded loss years.)

Those performance incentives, it should be emphasized, were frosting on a huge and tasty cake: Even if the funds lost money for their investors during the decade, their managers could grow very rich.

That would occur because fixed fees averaging a staggering 2.5% of assets or so were paid every year by the fund-of-funds’ investors, with part of these fees going to the managers at the five funds-of-funds and the balance going to the 200-plus managers of the underlying hedge funds.

Buffett concludes with a pithy new saying we could hang on the wall:

Performance comes, performance goes. Fees never falter.


p.s. For an alternative take that I don’t quite agree with but that makes some interesting points, see this note by Albert Bridge Capital.

p.p.s. Unrelated, my thoughts on Theresa May’s vacuous ‘big Brexit speech’ – Twitter.

From Monevator

From the archive-ator: Another good reason to open an ISA – Monevator


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

Low volatility ETFs failed to protect investors during recent falls [Search result] – FT

A would-be £100,000 pension squandered down to £3,000 on fees – ThisIsMoney

Beat an interest rate rise by locking into a new mortgage now – Guardian

Experts warn of buy-to-let crunch – ThisIsMoney

Harvard fund blew $1 billion in bet on tomatoes, sugar, and eucalyptus – Bloomberg

Cumulative house price growth from 2009 to 2017 [Paywall] – FT

Products and services

Nationwide launches market-leading ISA savings rate – ThisIsMoney

Target Accuracy calculator to backtest model portfolios – Portfolio Charts

Innovative finance ISAs hit stumbling blocks [Search result] – FT

Sky and Netflix to join forces in single subscription package – ThisIsMoney

Comment and opinion

Modern finance must kick its addiction to indices [Search result] – FT

The importance of buying with a margin of safety – Of Dollars and Data

Will active stock funds save your bacon in a downturn? – Morningstar

Forget market timing. Think ‘expectations driven investing’ – Elm Funds

The morality of suing financial advisors – The Evidence-based Investor

Millennials can chill about not having massive savings – Simple Living in Somerset

Property is a ‘good investment’ mostly because you live in it – ThisIsMoney

A history of the Trump Slump [Speculative!] – The Economist

The case for a diverse portfolio – DIY Investor (UK)

Target date funds are underrated [Note: Tax tidbit is US] – The Finance Buff

Community care – SexHealthMoneyDeath

Crypto corner

Can Bitcoin threaten the stability of financial markets? – Institutional Investor

Bitcoin is falling out of favour on the Dark Web – The Atlantic

BOE governor Mark Carney says it’s time to hold cryptos to account – ThisIsMoney

‘It Just Felt Like a Miracle’: A bitcoin donor’s $56 million giving spree – TCOP

Nearly half of 2017’s Initial Coin Offerings have already failed – Fortune

Off our beat

A week inside WeLive, a utopian apartment complex – GQ

Six charts that show how the world is improving – Visual Capitalist

How a small town reclaimed its energy grid and sparked a community revolution – Guardian

David Lynch teaches typing [Free downloadable game] – Rhino Stew

And finally…

“No breath of wind,
No gleam of sun
Still the white snow
Whirls softly down”
– Walter de La Mare, Snow

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What caught my eye this week.

Bit late with the links, as I spent Friday scrapping it out in a Warren Evans store to secure a bed at a whopping discount.

Fear not, readers! I may be spending money, but I’m still me doing my version of spending money…

Warren Evans has gone into administration. Sad news for various reasons, not least because lots of my friends recommended its beds and said it was a lovely firm to deal with.

Also, the chap working for the administrator to clear the stock said his business is booming in the capital, as more firms fail.

A powwow among the shoppers blamed Brexit, of course. (Some also speculated Warren Evans had seen its affordable craftsman return to Europe.)

I’m not actually convinced my new bed will show up, so chaotic were the scenes. But I will be well pleased if it does.

I was sleeping in an empty flat on a yoga mat when I first moved in, before upgrading to my fancy sci-fi mattress on the floor.

Two steps forward, one step back…

From Monevator

Live it up like a graduate student and save a fortune – Monevator

We updated our Broker Comparison Table for ISA season – Monevator

From the archive-ator: Why UK inflation-linked bonds might not protect you against inflation – Monevator


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

No, residential property hasn’t beaten shares, finds Credit Suisse – ThisIsMoney

Bank of England’s chief cashier doesn’t trust contactless – Guardian

Students demand tuition fee refunds: Here’s how to complain – Telegraph

Crypto platform Coinbase is struggling to scale – Bloomberg

The 2018 Credit Suisse Equity Yearbook is available [PDF] – Credit Suisse

The rich aren’t getting especially richer with collectibles [Search result] – Economist

Products and services

Zopa warns over defaults as investor returns decline [Search result] – FT

Tax confusion as three-year pensioner bonds come to an end – ThisIsMoney

Stelios’ new EasyISA pays 4.05%, but beware it is not risk-free – EasyMoney

12 tips on giving well to charities – ThisIsMoney

Comparing online brokers? Our interactive tool has had a refresh – Monevator

BA goes to war on long-haul flights with a £260 deal to Argentina – ThisIsMoney

10 things to know before choosing a care home [Search result] – FT

After making money in a year when everything went up, “Hedge funds are back!” – Barrons

The seven kinds of asset owning institutions – CFA Institute

Comment and opinion

Variable spending in retirement from a volatile portfolio – Retirement Cafe

Investors have spoken – The Humble Dollar

Lessons learned from a London credit card theft – ThisIsMoney

When (US) stocks and bonds fall together – The Irrelevant Investor

Inflation is a bigger risk to stocks than rising rates – Bloomberg

Be honest: most young homebuyers don’t ‘save’, they inherit [Search result] – FT

Come fly with me (you can pay with BA Avios points) – 3652 Days

Getting rich is about willpower – Financial Samurai

Candid thoughts from a 35-year UK fund management veteran – TEBI

The grouchy epidemic of professional investors – Institutional Investor

Animal Spirits is a great listen for investing fanatics [Podcast] – Animal Spirits

Investment red flag watch: The return of the SPAC – The Value Perspective

For stockpickers: Being (conservatively) roughly right – Gannon on Investing

Off our beat

‘I’m 37, I’m dying and this is how I spend it’ – Guardian

Airbnb and the unintended consequences of disruption – The Atlantic

Why I’m bullish on Generation Z – Morgan Housel

And finally…

“I am never bothered by normal people. It is the bull***tter in the ‘intellectual’ profession who bothers me. Seeing the psychologist Steven Pinker making pronouncements about things intellectual has a similar effect to encountering a drive-in Burger King while hiking in the middle of a national park.”
– Nassim Taleb, Skin in the Game: Hidden Asymmetries in Daily Life

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I had an older friend in college in the 1990s called Guy who was significantly cooler than me.

Guy got his mathematics PhD two years early. So far so nerdy. But like the best Chinese food, French movies, and Ben and Jerry’s ice cream, everything else was contrast.

Guy was a geek, but he had silky long hair that would have flattered the court of the Sun King. He seemed relatively disinterested in women but had a whip smart lover who looked like Maria Carey studying biochemistry. He saw the world in numbers but freelanced for the NME. He taught me a lot, and was generous in other ways, too.

“I read your short stories, you’re the next Martin Amis except you’re nicer to your girlfriend,” he said. “Come over for dinner.”

The graduate student lifestyle of kings

Guy shared a place with Faux Maria in Ladbroke Grove. It was a trendy area on the front line of gentrification. I didn’t know anyone else who lived there.

In fact, I didn’t know anyone else with their own flat. Everyone I knew lived in a crowded prototype of Big Bang Theory before technology was hip and deodorant was universal.

Guy welcomed me in with a smile and some quip about his castle.

The flat was on the first floor. Evening light fell through bay windows that would cost millions to buy in situ a few years later. There was no carpet, just rum-hued floorboards. You could see the worn heads of nails.

It looked like a photo shoot. But not pristine – everything was a bit battered and scruffy.

There were brown leather armchairs, wire shelves, a mannequin in the corner wearing a combat jacket, other intriguing stuff. It seemed like someone had cherry-picked the best of Portobello Market, but Maria said they’d found most of it in skips. All around, houses were being gutted and refurbished. Maria had an eye for the best of what these developers were throwing out.

Guy made me a cocktail – he’d just got into them – and joked he should be wearing a smoking jacket. The ice in the battered silver shaker sounded sophisticated.

Later he poured me the first glass of red wine I can remember drinking, because it was memorable, and told me he’d started spending more than £3 a bottle on that, too.

They made Thai food, trendy then, and we listened to the vinyl stacked on the shelves. Like my other friends, I had a CD Walkman that plugged into a cassette player that I’d brought up from my teenage bedroom. Guy had black separate units he’d wired into the sort of Marshall speakers I’d seen at gigs.

They lit some candles and a spliff, and things sparkled. I wasn’t half as good a writer as Martin Amis – I was a grungy student who’d recently ploughed through Marx.

But I now knew I needed some money from somewhere because I wanted to live like Guy.

Living well on less

Here’s the thing – Guy’s lifestyle wasn’t expensive. All his stuff was cheap, artsy, and secondhand. His flat was well located if you didn’t mind the drug dealers. But it wasn’t massive.

He and his girlfriend went to two or three gigs a week, but it was all free, either through NME or the student newspaper. Thai is cheap to cook and eat from plates off your lap. Billionaires listen to the same good music as the rest of us.

I’ve had some lucky breaks in life – my saving gene, my frugal dad – and another was being entranced at an impressionable age by Guy’s graduate student lifestyle.

I have friends who grew up wanting the same sports car as their uncle, or a cupboard full of expensive high heels.

I wanted my own secondhand separates system on a wooden floor.

And for many years, with variations, that’s what I got.

My DIY Guy

I lived below my means for decades. I rarely felt like I was doing without.

I didn’t drive, own more than one suit, or refurbish a kitchen.

I ate out and partied around the world in my 20s, but it was almost all through my (lowly paid) work.

I created this blog, which was a cheap, time-consuming hobby. Eventually it even made a few quid.

I didn’t have kids, which probably shortened relationships but helped my bank balance. New partners tended to be taken with the whole bohemian investor angle.

I pushed it for as long as anyone I knew.

Graduating from the eternal student lifestyle

To be fair, I have spent more in recent years.

I’ve certainly long stopped cutting away like my zealous co-blogger, The Accumulator. I’ve felt like a spendthrift buying a discounted Ted Baker jacket at TK Maxx or taking the odd Uber instead of a night bus.

But I’ve still been saving around half my income.

It was only when I hit 40 that I began to feel a bit sheepish having people over. Not old friends – you’d eat fish and chips in a tent with them – but new people I met later in life.

By then I’d been sharing a house with a pal from university for a few years. It was a good arrangement – we had lots of space and a social circle in common – but we’d begun to be joked about as a married couple who’d die together.

We were definitely a couple who didn’t want to spend anything on where we lived. Instead we saved for the ever-postponed future homes of our own. And it began to show.

Some people all but asked me where it had all gone wrong. My assets were invisible, up in the floating world, and I rarely talked about money. (I always talk about investing, but that’s different.)

It’s nice to think you are immune from all this but let’s be honest: Few of us look at those tin can collecting millionaire tramps without asking if something hasn’t gone a little wrong.

After that it’s all a matter of degree.

Someone will say in the comments: “Ah, so you caved in to keep up with the Jones!”1 And I suppose I have, a bit.

The real story is I got bored of not spending, of semi-disposable furniture, of not hanging anything bigger than an ironic postcard on the wall.

I started to wonder why I was still working if it was just to save money I can’t touch, or to hit arbitrary targets.

I felt ready for something new – and willing to let go of obsessing over the maths.

And I like nice things! I’ve been making occasional sightseeing trips to Heals and Habitat since I graduated. My former housemate couldn’t care less – if you can’t plug it in he’s not interested – but I’ve always loved the boutique hotels I stayed in through work.

So I am going to recreate one here in my new home.

A time to save, and a time to spend

Just how much money my eternal graduate student habit saved me has become apparent since I bought my own flat.

I don’t even mean the heartbreaking cash evisceration of paying stamp duty. (Guaranteed to move anyone two paces to the right.)

I mean that complete lack of four-figure home-related purchases for my entire adult life.

I knew I’d saved by living like Guy for so long. But I thought mostly about rent or utility bills. I was used to paying those. I didn’t think much about the cost of furniture that didn’t come from friends, IKEA, or Gumtree.

Now the savings are clear – in a punch to the gut sort of way.

People have been spending like this since college? Really?

I’m like some hunter-gatherer brought to civilization and left staring at a wall of flatscreen TVs. After years of writing about how much stuff costs, I can’t quite believe it.

I’m set to spend 2-3% of my net worth making this place the home I want. I’ll shop well and kid myself I’m buying quality. I’ll get the odd affordable antique and claim it’s an investment. Really I know I’m stepping on to a treadmill.

I just ordered a mattress for £600!2 A year ago I promised myself I’d buy such a mattress when I woke up at a friend’s feeling as if I’d had a full body massage.

But £600? That’s £10,000 in tomorrow’s money!3

The mind reels.

Still, the money I’m spending on my flat – after 20-odd years of living light, saving, and compounding, remember – looks surplus to my foreseeable plans, given my aim is not to quit work anytime soon.

In unhappy contrast, a 40-something friend recently told me she hadn’t yet started a pension.

I can’t avoid being hit by that bus forever

Roughly 97% of my post-house purchase money should continue to compound unmolested. I’ll save less in the future, but I’ve realized I don’t want to be the richest eternal student in the graveyard.

When I was dithering about buying my new flat an ex-girlfriend asked me, “Well, what ARE you saving for then?”

I didn’t have a good answer.

Many of us have to learn to save. I’ve had to learn to spend.

But put it off for as long as you can, I say. Have eclectic tastes and comfortably scruffy friends. Keep dinner at the Indian a treat for as long as possible. Go to Menorca, not Barbados. Look after your things.

Have fun when you’re young and rich in other ways.

And save, save, save.

  1. They will probably be the same people who say everyone should be happy renting while opining from the comfort of their paid-up own homes, but hey ho.
  2. Or £50 less through that link, and I get a referral fee too. Go on, it’ll help me pay for my new lavish lifestyle.
  3. £600 compounded for 30 years at 10%.
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What caught my eye this week.

I continue to live out of boxes after the move – and more pertinently have no Internet as of yet – but I’m still reading and reading and reading when I’m out and about.

Google blew up my ad revenue when it insisted I make Monevator and other sites look good on mobile phones – but for these past few days I’ve been glad of it!

Here are the articles I bookmarked for the links this week. Feel free to add anything Monevator-y that I missed in the comments below.

Have a good weekend!

From Monevator

Our updated guide to help you find the best broker – Monevator

From the archive-ator: They don’t tax free time – Monevator


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

‘Universal basic income’: report suggests giving £10,000 to everyone under 55 – Telegraph

Divorcing couples may clash over Bitcoin – BBC

Home ownership among young adults has ‘collapsed’, IFS finds… – Guardian

…though first-time buyer numbers just hit a 10-year high – Guardian

Real estate bubbles worldwide [Yes, London is on the list] – Visual Capitalist

The rising speed of technological adoption – Visual Capitalist

Products and services

A risk too far: Accident victims and compensation [Search result] – FT

Two thirds of investment shops ‘fail to publish full details of charges’ – Telegraph

Auto-enrollment pension contributions set to rise: How to take charge – Telegraph

Just 12 days left to spend your old £10 notes – Guardian

Loyalty counts for nothing with household bills [Search result] – FT

High out-of-contract prices for mobile and broadband can sting – ThisIsMoney

Halifax offering £125 to open a bank account, but better deals around – ThisIsMoney

Pocket money goes digital with apps for children as young as four [Search result] – FT

A new way to approach alternative funds – Morningstar

All the world’s a bet [Reviewing Thinking in Bets] – Abnormal Returns

Comment and opinion

Financial firewalls defend against volatile markets – Portfolio Charts

The new Permanent Portfolio for millennials – A Wealth of Common Sense

Is it fair to blame older people for the housing crisis? – Guardian

Be terrified – The Reformed Broker

A deep (and technical) dive into market gyrations/valuation – Grumpy Economist

How to become an ISA millionaire – Interactive Investor

Hedge fund mediocrity is the best magic trick – Bloomberg

Get rich with… The Process – The Escape Artist

Becoming a lender: What can possible go wrong? – FirevLondon

Unraveling retirement strategies: The constant spending rule – The Retirement Cafe

Should us stockpickers run our winners and cut our losers? – UK Value Investor

Taking the plunge – SexHealthMoneyDeath

London is a different country – Simple Living in Somerset

No new stuff for a year – 3652 Days

Off our beat

DIY solar energy project: Free energy for life! – Mr Money Mustache

Can you save an American mall from extinction? [80s-style game] – Bloomberg

And finally…

“You and everyone you know are going to be dead soon. And in the short amount of time between here and there, you have a limited amount of fucks to give. Very few, in fact. And if you go around giving a fuck about everything and everyone without conscious thought or choice – well, then you’re going to get fucked.”
The Subtle Art of Not Giving a F*ck, Mark Manson

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Fear not friends, and back to the drawing board foes. I’m alive and well. Thanks for the several notes of concern.

A few readers mused whether the – ahem – tumult of the past few days had sent me into exile?

Had my 100% all-in bet on a low volatility ETF blown up, taking my wealth and credibility with it?

Alas, no cigars. It takes much more than a 5% swing in my portfolio to send me packing. Besides, this is too much fun.

All week I mentally drafted and redrafted a post about the fascinating return of market volatility in the past 10 days.

Unfortunately though I first had no time to write it, and now I’ve no Internet. More on why below.

It’s probably just as well. Whenever the stock market makes the mainstream news, there are worse rules of thumb for long-term investors than to turn that news off.

Watch the rugby instead! I found this past week or so invigorating, but I’m a fanatic. You don’t need to be.

Musing on the markets

Here’s a few quick thoughts – feel free to skip if you’ve sensibly developed an intolerance for one person’s speculations:

  • Talking heads on CNBC and elsewhere blamed the volatility on robot traders and ETFs and the new era of Skynet and Robocop. This is mostly nonsense. Volatility has always existed in markets, especially at times of regime change, which is what I think this. (Regime change is loosely a systemic change in fear levels or rate or inflation expectations or a momentum change).
  • Hilariously, the same pundits have spent two years blaming the very low volatility we’ve had on robot traders and ETFs. Equally nonsense. The market has been through low volatility periods before, too.
  • If anything novel was dampening volatility, it was almost certainly very low interest rates since the financial crisis. It is that regime that seems to be ending.
  • Higher bond yields were always going to be reflected in changing equity valuations. That is one reason why I have warned those who feared bonds were excessively expensive to remember that equities are partly priced off bond yields. See my article on the problem with low interest rates for more.
  • I personally believe the market has detected the return of inflation, and is repricing accordingly. To some extent the sudden and sharp disruption to the long-prevailing millpond conditions was probably because lots of active money (e.g. hedge funds) had been betting explicitly on low volatility. But as I allude to in that article I linked to above, it’s also because equities are priced partly off long-term yield expectations.
  • None of this works like clockwork, not least due to technical factors. So for example bonds and equities can go down at the same time together, and will if the market expects increasing yields in the future. Repositioning an entire market structure creates its own short-term dislocations! It’s over months and years we’ll see what was really going on, not hours or even days. Diversification doesn’t deliver minute-by-minute compensations.
  • It is completely true that several daily rebalanced and in some cases leveraged exchange-traded products ‘blew up’ when volatility returned and promptly screamed off the charts. A few closed down. The products didn’t fail as such – they did what they said they’d do, in these conditions. You were silly if you’d bet the farm on them. Surely nobody did?
  • More relevant (far bigger) are the so-called risk-parity funds that try to balance equities and (usually leveraged) bonds to the optimal point for the best risk-reward returns. As volatility increases, their risk models change, which means they need to rebalance, which can prompt selling, which will increase volatility, which feeds into the model, and so on.
  • To that limited extent there was a feedback mechanism in the market. But I still think it’s wrong to blame ‘robots run amok’. Humans would do the same thing, only more slowly. Higher volatility means more value at risk in a portfolio. For some money managers that can prompt selling riskier assets (shares, maybe certain kinds of shares) to reduce risk.
  • Once this (supposed) ‘de-risking’ began, it was going to go on for a while. Personally I think it will likely continue for some time to come, and we may well see a small bear market develop over the next few weeks and months. Your guess is as good as mine though. I’m opining for fun – nobody knows!
  • High equity and bond valuations exacerbate all this, for many different reasons. But cheap equity valuations are no protection once the selling begins.
  • It’s different for bonds, because the pension world needs to own them to match liabilities (and arguably there’s not enough around.) There’s a permanent bid, and at some point a yield will be found where bonds stabilize. Probably higher than here, across the world.
  • Remember this is almost certainly a market correction, not an economic disruption. Growth is great everywhere apart from the UK, which is lagging because of the Brexit baloney (as it will likely now do for a decade, as even the government’s own forecasts have now admitted).
  • Great growth does imply higher inflation, but also a good environment for companies to grow profits, hire more workers, increase wages, and so forth. These are ongoing ills that do need addressing. In the long-term this is a good problem to have.
  • If you’re an active sort, you might want to make sure you own companies with exposure to bulk commodities. (Passive investors will have some exposure anyway in FTSE trackers etc). I’d consider owning some gold, too. (Don’t expect gold to go up the day markets go down, or anything so orderly. If share prices follow a random walk, gold follows the random walk of a drunk. But eventually he makes it home.)
  • People will say “you have to be in equities because they will protect you against inflation”. But remember, we may have already had our inflation protection from shares. Pundits tend to miss this – global trackers have been going gangbusters for a decade, and they could not continue like that forever. You get your on-average higher returns from shares averaged over many years. i.e. High returns in recent years could have ‘borrowed’ some returns from the future.
  • The best thing is a balanced portfolio that you set up for all-weathers. Many Monevator readers – particular the passive-minded who find my co-blogger less distracted than old gadfly me – have such portfolios. Along the lines of our Slow and Steady model portfolio.
  • Such passive investors should probably do nothing in the face of this return of volatility (and potential regime change towards higher yields). Continue with your plan, and rebalance when you’d planned to rebalance. Don’t panic!
  • The exception is if you’ve now realized you really own too many equities as you’ve watched your portfolio oscillate this week. Be careful! Most people find it infinitely easier to see shares go up than down. Do nothing is a plan of action to stop you focusing and fussing, and selling when markets are down. But if you genuinely feel you own too many shares in retrospect, it’s probably better to get comfortable by reducing your allocation a little (I’d switch to cash not bonds for now) rather than risk selling everything if we have a bigger correction.
  • Markets go down as well as up. That is not small print, it’s chalked into the walls of the stone Temple of Investing. We were bound to see falls again, and while this week has had some fun elements we will see far worse in terms of peak-to-trough declines in the future, some day.
  • Volatility is a feature, not a bug!
Not (yet) all mod cons

Right, so I’m in a coffee shop. Why? Because my new flat has no Internet yet.

Yes, I’ve bought a property and moved this weekend!

Let’s discuss why, how, and whether it was a good idea in a future post. I hope to be back to normal in a fortnight or so – at least back with links by next weekend.

But for now my cup running empty. The millennials around me seem happy to occupy their tables all day with an espresso bought six hours ago, but I’m made of more self-conscious stuff.

Take care, don’t do anything silly with your investments – and look out for The Accumulator’s broker table update on Tuesday!

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What caught my eye this week.

These three graphs from The Retirement Café illustrate the case for a so-called ‘floor and upside’ approach to investing for an income in retirement.

Some people plan to have all their money at the mercy of the markets in retirement. They’ll then make systematic withdrawals, either by selling down capital, taking an income, or a mixture of both.

That’s a fine approach on paper – especially if you like an exciting read, because the fact is you don’t know how the story is going to end:

An alternative is to turn your entire pension pot into a certain income. This is the equivalent of what you used to have to do in the UK when you were compelled to buy an annuity:

The floor-and-upside approach always looks the most sensible blend to me – if you can afford it. Here you turn some of your funds into a guaranteed income, and invest the rest in volatile assets:

The lack of a scale on the first two graphs does flatter the cost of buying a secure ‘floor’, in terms of forgoing potentially superior returns. But that’s a minor gripe. Do read the whole article.

Remember that British retirees are entitled to a state pension, which provides some element of your secure income floor. See our previous articles on creating a secure retirement plan and devising your income floor.

From Monevator

Types of investing risks – Monevator

From the archive-ator: The time value of money – Monevator


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

Three million stock indices dwarf tally of quoted companies [Search result] – FT

Hammond calls for simpler inheritance tax [Search result] – FT

Number of millionaire households in UK surges to 3.6 million – ThisIsMoney

Surprise rise in UK house prices as lack of homes for sale fuels lift… – Guardian

…while UK mortgage lending falls to lowest level since January 2015… – Guardian

…and interest-only borrowers are in denial, watchdog warns – ThisIsMoney

What’s a Ping Pool? A VIP lounge for dark trading – Bloomberg

Record number of Americans expect US stocks to rise – Tracy Alloway

What hedge fund managers earn (on average) to lag (on average) the market – SumZero

Products and services

Last chance to claim £1,100 Lifetime ISA bonus – Telegraph

Are the days of the trust fund numbered? [Search result] – FT

M&S Bank launches top mortgages for first-time buyers – Telegraph

Personal finance apps can’t automate adulthood [US apps but relevant] – BuzzFeed

Portfolio charts has been updated with new data for 2017 – Portfolio Charts

Inside the bustling comic-con of ETFs [Podcast] – Bloomberg

Neil Woodford’s funds hit by exposure to Capita – ThisIsMoney

Comment and opinion

Retirement strategies: Floor-and-upside [US but relevant] – The Retirement Café

It’s hard to predict how you’ll respond to risk – Morgan Housel

Taxing issues – SexHealthMoneyDeath

Can you really save for a deposit by ditching coffee and avocado toast? – Guardian

Richard Beddard: The beauty of buy and build companies – Sharescope

Larry Swedroe: Size premium persists – ETF.com

From glass half-empty to half-full, but still no euphoria – Investing Caffeine

Active risk: One fund’s 20-years of out-performance lost in four years – Servo Wealth

Economic progress doesn’t equate to stock market returns – Morningstar

Five lessons from semi-retirement – Humble Dollar

Are company spin-offs worth a look? – The Value Perspective

The best way to lose $5 billion – Of Dollars and Data

Read this before joining as employee 1 to 20 at a startup – First Round

Crypto corner

Bitcoin whipsaws investors as bubble shows signs of bursting – Bloomberg

Bitcoin is the new gold, perhaps. But it will never be a currency – Bloomberg


Worse off under all scenarios after Brexit [Search result] – Government via leak via FT

Credit BuzzFeed for the scoop – BuzzFeed

Leaked Brexit impact report: key questions answered – Guardian

How to make sense of those pesky Brexit forecasts – BBC

Simon Jenkins: The brave Brexit speech Theresa May is afraid to give? Here it is – Guardian

Off our beat

Fitness app discloses the location of secret military bases – TechCrunch

You’re on the verge of losing everything – but you don’t understand why – BBC

Deepfakes porn has serious consequences – BBC

Grand Theft Life: Interview with Tim Urban [Podcast] – Invest Like The Best

Hardcore History Episode 61: Painfotainment [Podcast] – Dan Carlin

Working from home with pets [Silly pictures] – Ask a Manager

And finally…

“It’s easier to hold your principles 100% of the time than it is to hold them 98% of the time.”
– Clayton M. Christensen, How Will You Measure Your Life?

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  1. 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”.
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