Weekend reading: I shopped til I dropped

What caught my eye this week.

I would have had this post to you much earlier on Friday, but for consumerism. You see I got totally distracted trying to get the best out of my new Sage Barista Express:

Real life: Messy.

Having done a barista training course a few years ago, I improbably fancied myself as pretty hot stuff with a coffee grinder.

I’ve enjoyed flat whites knocked out by a friend on this well-reviewed model many times, too.

But it turns out I didn’t know my friend as well as I thought I did!

I’ve discovered he’s great at making coffee – but perhaps more shockingly that he’s modest about it. (What other talents does he boast, I now wonder? Or rather does he not boast?)

Seriously, I know it takes a while to get the hang of DIY espressos on new kit, so I’m not too perturbed. It’s only eaten a couple of hours so far, and that includes washing the bits and bobs, figuring out how it fitted together, and collecting beans I spilled on the floor.

No, the other reason why I fell behind was because as soon this new toy finally arrived from Amazon, I went out for a three-hour hike around West London.

Did you sign for it, sir?

You see I’ve been in all week waiting for deliveries – and it drives me crazy.

I’m on edge all-day, until the deliveries do (or don’t) arrive.

A laid-back friend who doesn’t understand my hair-trigger control freak personality asked me what the big deal was.

“Imagine waiting all day to be slapped in the face,” I said. “You don’t know when it’s coming, but you will be slapped in the face. That’s me waiting for the door buzzer.”

It’s not even that I can’t do the social interaction bit. It’s worse: I usually talk the delivery person’s ear off. (A common failing among those of us who work from home.)

Rather it’s the waiting and uncertainty that kills me – and the unexpected and unscheduled state change.

Years before the Millennials I kept my mobile on silent always, for the same reason.

A totally unexpected phone call to my mobile feels like being tapped on the shoulder by a suddenly apparating supernatural nosy neighbour. I hate it.

Now at this point you’re either nodding along (a very few of you) or you’re aghast with incomprehension. Which is fine.

(I’ve said before when explaining why I invest actively and nearly everyone reading shouldn’t that I’m wired differently. I didn’t say it was easy!)

Economy class

Anyway, the reason I’m sharing these asides – and the rare from real-life picture above – is to give a quick update on my embrace of consumerism.

The story so far: You’ll remember I bought a flat, I still haven’t written up why, and I set about spending some of my 20-odd years of winnings (well, savings and winnings) to make it fancy.

This got off to a good start. I’ve always loved nice furnishings and so on – from afar. But by the middle of the hot summer I was bored of spending money.

I’d lost enthusiasm, I’d lost my girlfriend (she said she didn’t like my sudden interiors obsession, but perhaps she just didn’t like the sofa I finally selected?), and I’d lost (/spent) more money traded for matter than I’d spent on things in the previous two decades combined.

I didn’t even go crazy! It’s just that living like a graduate student even as your earnings multiply is pretty low-rent.

For most of that long era I used to opine to my more normally spendy friends that buying stuff only produced problems. Which in my experience was almost always true.

Stuff didn’t work, or you had to upgrade something else, or it broke, or you felt guilty, or you had to wait in for days to get it delivered, or you were worried it’d get nicked when finally you did get hold of it – or any one of a dozen other woes that people who buy stuff all the time think is just the way the world is.

Only two things hit the spot for me without fail when I splashed the cash. Black cabs – which I almost never took, and felt so luxurious in those pre-Uber days – and the first beer with two poppadoms and all the sauces and other gubbins.

Obviously I did a gazillion other things over the decades. I didn’t just taxi around London from curry house to curry house! And often it was money well spent.

But never reliably so.

Well, this whole flat buying and furnishing thing has proven my younger self right.

Through the keyhole

Don’t get me wrong. It’s coming along. It looks beautiful, to me if not my ex. I feel lucky to live among all these things I chose in my still-new flat, even knowing luck is only part of it.

But, oh! I guess I secretly thought the universe would notice The Investor Is Finally Throwing Money At The Problem and the rules would change. But they haven’t.

Stuff comes broken. Trades people don’t show up. Some of them are great, but some are – well – yet to find their true calling. Deliveries don’t arrive. I made a final push to finish my flat before Christmas, and caned the Black Friday offers. But only three of the seven resultant purchases that were scheduled for delivery have actually made it here so far. A new record of rubbishness.

Coffee machines are harder to use than you expected. Analine leather sofas stain if you sneeze near them. Complete automatic watering systems require add-ons to water completely. Your boiler is already up for a service – and that’ll be £100+ with VAT please.

I feel sometimes like Robinson Crusoe, finally back on the mainland after a long sabbatical away catching fresh fish with his hands and brushing his teeth with a fragrant root. I can confirm 2018 has a lot of gorgeous stuff on offer – but as we all know it comes at a price and doesn’t really solve anything.

Still happy I did it, but pleased I’m mostly buying things that will last.

Once I’m done the hedonic treadmill is going back into storage!

Note: Yes, it’s an expensive coffee machine (though one of the cheaper good ones). I’ve always liked a few quality things in life, I’ve just tended to get them cheaply. I saved about half my income for 20 years, so while the Frugal Police are welcome to give me a caution, keep in mind that I wrote the (racier) pages of the book you’re throwing at me. And beware Buffett’s Folly…

From Monevator

From the archive-ator: Death, infirmity, and investing – 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

Here’s how much fund managers are paid [to lose to the market] – Institutional Investor

Houses prices down on fundamentals not Brexit, research suggests – ThisIsMoney

Property slump could cut number of affordable homes built by 25% – Guardian

UK migration: Fewer EU arrivals, but overall figure stays the same – BBC

Do you live in one of the happiest places in the UK? – ThisIsMoney

The inheritance tax mess, where richest pay a lower percentage rate – Simon Lambert

Products and services

UK rail fares to rise 3.1% in January – Guardian

Shawbrook tops table with a 1.65% one-year cash ISA rate – ThisIsMoney

Ratesetter will pay you £100 [and me a bonus] if you invest £1,000 for a year – Ratesetter

New breed of elite dating apps for wealthy singletons [Search result] – FT

Comment and opinion

How to own all tomorrow’s winning stocks – The Evidence-based Investor

John Bogle needn’t worry about index fund dominance – Pragmatic Capitalism

The proliferation of indices isn’t all it appears – Abnormal Returns

In praise of old jobs – Young (Mrs) FIGuy

Spend more: The most ignored piece of financial advice [Search result] – FT

How to retire forever on a big stash [US taxes/insurance] – Mr Money Mustache

FIRE Day! – Retirement Investing Today

You would not have invested with Warren Buffett – Behavioural Value Investor

Anti-FIRE: The YOLO train wreck edition – Simple Living in Somerset

Juggling six-figure margin debt [Don’t try this at home!] – Fire V London

The top 20 personal finance questions answered – Guardian

Morningstar gets into the finance-meets-food-pyramid game – Morningstar

Five things parenting and (active) investing share – The Value Perspective

What can we do about over-confidence? – Behavioural Investor

An attempt at estimating the true ‘global market portfolio’, including all the unlisted assets in the world [Research] – Alpha Architect

Brexit

Government finally admits UK will be worse off under all Brexits – New York Times

Leave voters statistically much likelier to believe conspiracy theories – Guardian

A Daily Mail EU scare story debunked [Again, people believe this crap] – Tom Pride

The French village that fears for its British community – BBC

Romania has lost 16% of its population to rest of EU in a decade – MSW via Twitter

Brexit TV Debate: A former Remainer will argue for her Brexit deal, a closet Leaver for a better deal or Remain. What a time to be alive! – BBC

I’d like to Exit from these homegrown cretins. Where do I vote? – BBC

Kindle book bargains

Why You? 101 Interview Questions You’ll Never Fear Again by James Reed – £1.99 on Kindle

Thank You for Being Late: An Optimist’s Guide to Thriving in the Age of Accelerations by Thomas L. Friedman – £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

Tiny Budget Cooking: Saving Money Never Tasted So Good by Limahl Asmall – £1.09 on Kindle

Off our beat

Internet: The end of the beginning [Video/Presentation] – Benedict Evans

Watch how just a few self-driving cars prevent traffic jams [Graphics] – Science

Nike and Boeing are paying sci-fi writers to predict their futures – Medium

Woman who names daughter ‘Abcde’ is upset when someone finds it funny – ABC News

A man actually ticked the US Visa form ‘Are You A Terrorist?’ box – via Twitter

Maps showing how we’re divided by more than Brexit [Funny, old-ish] – Ink Tank

And finally…

“Why should we look to the past in order to prepare for the future? Because there is nowhere else to look.”
– James Burke, Connections

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”.

from Monevator https://monevator.com/i-shopped-til-i-dropped/

Weekend reading: New investing game has Stax of potential

What caught my eye this week.

When my co-blogger The Accumulator told me about a new investing game, Build Your Stax, I was excited.

This educationally-minded simulation features all the asset classes – even individual stocks – and runs over a 20-year period.

A review by Allan Roth made it sound like The Matrix for money nerds:

Players will see high-flying stocks and learn that some may continue to fly while others will crash and burn.

They will encounter bull and bear markets, and learn the emotions and responses that accompany each.

Exciting! Would I be so bowled over I could swap my risky hobby of active investing for the virtual version instead?

Stax includes assets other than just shares, so it promised to be more than just a ‘pin the tail on the riskiest company’ paper money game.

Stacking the deck

Sadly, Stax didn’t live up to my hype.

Because you live through 20 years of market returns so quickly, you don’t really experience the emotional highs and lows of losing even fantasy money, as Roth suggested.

In fact it’s hard to even follow which assets are doing well, beyond a stark profit or loss line.

The individual stocks part is especially silly. There’s no data on the companies, and their prices whirl around seemingly randomly. I accept share moves might look that way if you’re not following companies closely, but whether a company – or its shares – does well is not random over the long-term, it’s related to earnings.¹

That said, one neat aspect to Stax is it uses real-world data sequences for its asset classes returns – and it doesn’t tell you what time period you’re living through in advance.

The share prices aren’t really random, then, although they might as well be because you’re given no information about the companies.

More importantly, at the asset class level sometimes (usually!) a simple index fund beats everything. But sometimes you’ll wish you stayed in CDs (basically the US equivalent of our fixed-term savings bonds).

I did beat the computer, but I didn’t feel that proved I was the new Warren Buffett.

Oh, and this screen took the biscuit for me:

I’ll take my chances on a bear market, but I can’t envisage ever letting a marriage imperil my wealth.

For all my moans Build Your Stax is a fun way to spend 20 minutes. Give it a go and let us know what you think in the comments below.

From Monevator

How to buy and sell index trackers – Monevator

From the archive-ator: 10 things I’ve learned from being an active 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!²

£15bn pensions windfall: Are you due some after court ruling? [Search result] – FT

US economic growth too robust for the Fed to bow to wobbling markets – Bloomberg

Nine out of ten Black Friday deals cheaper at other times, says Which? – Guardian

Investor says sorry for huge losses [No, not THE Investor…] – BBC

Young are saving more for pension, but many still confused and over-optimistic – ThisIsMoney

Graduates trapped in unpaid internships, study finds – Guardian

Simon Lambert: Five takeaways from the Bitcoin bubble – ThisIsMoney

Mainstream FIRE mini-special

Can anyone retire in their 30s? [Author emailed us, I missed it! ] – Guardian

Want to retire early? Get FIRED – Daily Mail

FIRE: Live frugally and retire early – BBC

Products and services

40 ways to get free money – Moneywise

Smart meters rollout labelled a ‘fiasco’ as consumers face extra £500m bill – Guardian

Building Societies reconsidering the case for 100% mortgages – ThisIsMoney

Ratesetter will pay you £100 [and me a bonus] if you invest £1,000 for a year – Ratesetter

Remember last December, when people paid a 2x premium to invest in a Bitcoin trust? – Bloomberg

Homes for sale on British islands [Gallery] – Guardian

Comment and opinion

Yards after contact – The Reformed Broker

The dangers of maximization – The Research Puzzle

What if active investing wasn’t zero sum? [Trick premise but interesting] – Morningstar

Simple isn’t easy [Dividend tax bit is US taxes] – Humble Dollar

Change almost always comes as a surprise – The Financial Bodyguard

Rich people’s problems: There’s no such thing as free banking [Search result] – FT

Why is divorce expensive? Because it’s worth it! – Financial Samurai

Meb Faber outsmarted by his childhood stock picks – Market Watch

At the intersection of art and money – Abnormal Returns

Saving regret is common, but it’s events not laziness that got in the way [Research] – SSRN [h/t Abnormal Returns]

There’s still a case for owning Berkshire Hathaway – Brooklyn Investor

The rise of zombie stocks – Factor Research

Brexit

Brexiteer coup flops [Does anyone believe their magic thinking anymore?] – Spectator

Brexit political declaration: What you need to know [Search result] – FT

EU officials meet to finalize agreement – BBC

Dominic Raab: Theresa May’s deal worse than staying in EU – Guardian

Shocked – shocked – to read Tommy Robinson is now an advisor to UKIP – Guardian

Kindle book bargains

Why You? 101 Interview Questions You’ll Never Fear Again by James Reed – £1.99 on Kindle

Thank You for Being Late: An Optimist’s Guide to Thriving in the Age of Accelerations by Thomas L. Friedman – £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

Tiny Budget Cooking: Saving Money Never Tasted So Good by Limahl Asmall – £1.09 on Kindle

Off our beat

High score, low pay: Why the gig economy loves ‘gamification’ – Guardian

The simple joy of ‘no phones allowed’ – Raptitude

There’s seldom any traffic on the high road – Farnham Street

‘Sci-fi’ plane with no moving parts flies successfully [Video] – BBC

Computer vision: How Israel’s secret soldiers drive tech success [Search result] – FT

And finally…

“Never buy anything from someone who is out of breath.”
– Burton G. Malkiel, A Random Walk Down Wall Street

Like these links? Subscribe to get them every Friday!

1. The reason even those who study companies and their prospects closely can’t beat the index is not because share prices are a lottery. It’s because the market mostly does a good job at figuring out the earning’s outlook for different firms, and what to pay for them in advance. And the reason stock price moves can be described as ‘random walks’ is because the current price supposedly encapsulates all the known information about a company, making the next piece of information – and price move – in theory a crap shoot.
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”.

from Monevator https://monevator.com/weekend-reading-new-investing-game-has-stax-of-potential/

How to buy and sell index tracker funds

Previously we’ve run through how to open an online broker account and how to buy and sell ETFs.

Today we’re going to look at purchasing an index tracker fund.

Next stop, the world – muhaha!

[Editor’s note: I think he meant to write ‘Next step, a globally diversified passive portfolio’. Or at least I hope he did.]

What is an index tracker fund?

An index tracker fund is typically an Open Ended Investment Company (OEIC).

In normal-person speak, this means a tracker fund is set-up as a company that you can buy and sell shares of. Index trackers are ‘open-ended’ because the number of shares in the company will rise and fall when investors buy or sell them from the manager of the fund.¹

Some tracker funds are still set up as Unit Trusts. This means they are structured as a trust rather than a company, and investors buy and sell units in the trust. Like OEICs these are also ‘open-ended’.

From an everyday investor’s point of view, the two flavours mostly amount to the same thing. We’ll focus on OEICs, which we’ll refer to simply as index funds from here.

Pricing

Before you buy anything it’s important to know how the market works.

Index funds are priced based on the value of their assets using a set formula. Unlike ETFs or shares, there is only once price for an index fund for all buyers and sellers.

This price is calculated once a day, at a set time (called the valuation point).

Index funds are typically traded at the end of the day (called the market close). To trade on a given day, you need to do it before a particular cut-off time.

If you place your order after the cut-off, your trade will go through at the next valuation point.

I’ll trade yer!

First we need to locate the fund we want to trade. We find it by searching for its fund code – a unique letter string given to every fund, which you’ll find on its factsheet – or else we can search by fund manager.

Below we’ve typed in ‘VVFUSI’, which is the code for one of Vanguard’s FTSE All Share trackers:

Here we can see there’s no ‘active’ price for fund. Instead, we’re given the last closing price (as at 1/10/2018).

We’re then taken through to the following confirmation screen:

(Click to enlarge the small print!)

You’ll notice we’re only confirming a total order value for our trade – £1,000 in this example – and no price. As discussed above, an index fund is only priced once a day. We won’t know the exact price we paid until the deal is done.

Because OEICs have a single price there’s no bid-ask spread, unlike with ETFs. Transaction charges are ‘hidden’ within the price. (Unit Trusts do have two prices, like ETFs.)

Aside for geeks: Most index funds use what’s called ‘swing pricing’, where the asset value of the fund is adjusted based on the volume of buyers and sellers to cover transaction charges. Historically, Vanguard used something called a Dilution Levy, which was an upfront transparent charge. This was used to cover trading costs, so that long-term investors weren’t charged for short-term trading. It was terribly misunderstood and Vanguard gave in to pressure and moved to swing pricing.

Most good brokers don’t charge a commission for trading index funds, or they charge a lower commission. This usually makes them cheaper to invest in than ETFs, where dealing fees are typically applied. No fees is a nice benefit for long-term investors looking to keep costs low, especially when you’re starting with small sums. Have a look at the super-duper Monevator Broker Comparison Table to compare charges.

When we’re happy with our order we click the appropriate boxes and send it through. After that it’s just a matter of sitting back and waiting for it to be fulfilled. The buying is done.

As with our ETF purchase in the previous article, we have to wait a while for official settlement of our trade² but in practice you’re now invested in the fund. Your broker should supply you with a contract note for your records.

That’s it!

Buying and selling index funds is easier than trading ETFs, if only because you don’t have the pressure of a countdown and there’s no need to worry about spreads.

True, you do have to wait to know the exact price you pay with index funds, unlike ETFs.

But for long-term passive investors putting money into broad index funds, that’s no great disadvantage. Price fluctuations on a day-to-day basis are essentially random. We’re growing our investments for decades.

Inspired? If you’re after ideas about what index tracker funds to buy, check out The Accumulator’s overview of low cost index trackers.

Read all The Detail Man’s posts on Monevator, and be sure to check out his own blog at Young FI Guy where he talks about life as a financially free twenty-something.

1. In contrast, an investment trust is ‘closed-ended’, and has a fixed number of shares that you trade on a stock exchange.
2. Usually T+2. See our article on trading ETFs for more details.

from Monevator http://monevator.com/how-to-buy-and-sell-index-tracker-funds/

Martin Lewis – Warning: Energy price comparison savings are WRONG due to the price cap – and how it needs to be fixed

The new energy price cap (following on from the prepay price cap) for millions of customers on a standard tariff will begin on 1 January 2019. It's already been wrongly reported, but there's a bigger worry that it will make the savings on comparison sites wrong.

from Martin Lewis' Blog https://blog.moneysavingexpert.com/2018/11/martin-lewis---warning--energy-price-comparison-savings-are-wron/

Weekend reading: The best money and investment reads from around the web

What caught my eye this week.

Out of sympathy with those who can take no more of the national pantomime, I decided to run my Brexit-themed introduction as a separate article this week.

(There’s a pretty good conversation developing in the comments, so you might take a look if you only tend to read us via email.)

Fewer than six weeks to Christmas!

From Monevator

House prices, mental accounting, and leaky buckets – Monevator

Navigating the #BrexitShambles – Monevator

From the archive-ator: Rich friends, poor friends

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

Warning over property peer-to-peer defaults [Search result] – FT

Bellwether estate agent Foxtons closes six branches in ‘challenging’ London market… – Guardian

…but prices in the Midlands are rising 6% a year – ThisIsMoney

Tesco and WWF partner to halve environmental impact of UK food shopping – Which?

Banks urged to justify ‘staggering’ level of branch closures [Er, smartphones and the Internet?] – Guardian

Beware this TV licensing email scam – ThisIsMoney

Austerity has inflicted ‘great misery’ on UK citizens, says UN – Guardian

Most people give up on non-fiction books halfway through [PDF] – Kobo Report (h/t Michael Batnick)

Products and services

Megatrends: How to align your ETF portfolio with global developments – JustETF

Should taking out 50 Wonga loans make getting a mortgage difficult? [Um…] – ThisIsMoney

Investment trusts see beauty in small companies [Search result] – FT

Ratesetter will pay you £100 [and me a bonus] if you invest £1,000 with it for a year – Ratesetter

New investors increasingly look to robo advisers [Search result] – FT

Many popular Black Friday products are cheaper at other times of the year – ThisIsMoney

Homes in former train stations [Gallery] – Guardian

Comment and opinion

A brief history of investors being duped by market manipulators – Jamie Catherwood

How I track my investment returns [Very pretty spreadsheet!] – Young FI Guy

The secret of marital bliss? Credit Scores. – Humble Dollar

12 investment contradictions – Behavioural Investment

What FIRE gets right – Rad Reads (h/t Abnormal Returns)

A Corbyn government, unlike New Labour, would tax the rich properly – Guardian

We’ve known for 85 years that financial forecasters can’t forecast – Evidence-based Investor

Fund managers are holding a lot of cash right now [I read it as they are more bearish about bonds than shares] – The Fat Pitch

Expensive businesses and high debt combined is a cause for concern – The Value Perspective

Why WH Smith could be a buy for dividend growth [PDF] – UK Value Investor

Once the world’s most valuable company, does smashed-up General Electric have a future? – Musings on Markets

Brexit

Gordon Brown: To calm the Brexit storm, we must listen to the UK’s views again [Search result] – FT

New Brexit dividend line is between pragmatists and players – CapX

Jo Johnson: the inside story of Brexit and where it all went wrong [Search result] – FT

The Brexit wreckers are slinking away from the rancid mess they’ve made – Guardian

Kindle book bargains

Why You? 101 Interview Questions You’ll Never Fear Again by James Reed – £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

Tiny Budget Cooking: Saving Money Never Tasted So Good by Limahl Asmall – £1.09 on Kindle

The Strategist: Be the Leader Your Business Needs by Cynthia Montgomery – £0.99 on Kindle

Off our beat

Study warns we’re headed towards a humanity killing 5-degree rise by 2100 – Clean Technica

Everything on Amazon is Amazon – New York Times

The old gods and the new – Of Dollars and Data

Are we really in the middle of a global sex recession? – The Guardian

And finally…

“Be aware that the market does not turn when it sees light at the end of the tunnel. It turns when all looks black, but just a subtle shade less black than the day before.”
– James Montier, The Little Book of Behavioral Investing

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”.

from Monevator http://monevator.com/weekend-reading-the-best-money-and-investment-reads-from-around-the-web/

Navigating the #BrexitShambles

[Trigger warning: Off the cuff Brexit thoughts ahead. Reading is optional! My blog, my thoughts, and I’ve started so I’ll finish. Just click away and you needn’t be troubled by it! Nor will you feel forced to be rude about me in the comments.]

A few days after the Referendum in 2016, I wrote a short satire chronicling the happy state of Barry Blimp, a middle England  Leave supporter:

And Brexit is going so well! Better than even Barry might have expected.

True, the markets initially dipped 2-3% percent when the result was announced, as lily-livered Remainers sold their holdings and made enquiries about moving to Australia.

But equities soon bounced back as brave Brits like Barry stepped in to staunch the bleeding.

Article 50 was triggered immediately, and the terrified Europeans quickly caved in to all the bold Brexiteers’ demands.

Now international capital is flocking to the UK, as it sees how the nation has freed itself from the yoke of EU membership that had held it down and kept it only the fifth largest economy in the world.

At this rate we’ll be challenging China for the number two spot by Christmas!

Two and a half years on, and as fantasy has given way to fact an apology is required.

I apologize to anyone named Barry.

Back in the (sur)real world, Brexiteer MPs – including two former Brexit secretaries – are looking to thwart Theresa May’s best attempt at solving British politics’ version of Gödel’s incompleteness theorem.

They aim to derail May’s deal by employing the same meaningful Parliamentary vote won by those they once branded “The Enemies of the People”.

Just another day in Brexiteer-land.

After that Referendum

As predicted, Brexit has been an all-consuming waste of time for nearly three years¹.

And it’s done this blog no more favours than the country.

I lost many readers in the Referendum’s divisive aftermath. I became less enthusiastic about writing here, too.

At least Remainers and Leavers are now united in agreeing Brexit has been a shambles.

My more constructive critics suggested I focus on the investing implications.

I see their point, but the perverse contradictions of Brexit makes this easier said than done.

Macro-economic forecasting is always fiendishly hard, and with Brexit the range of outcomes is very wide and the appropriate actions you might take at odds with each other. Assigning probabilities to the various exit scenarios feels like betting on raindrops sliding down a window pane.

The only certain advice is to be diversified. But that is always the best advice.

Even leaving aside the fickle markets, let’s consider the British economy.

The story so far

Everything that has happened so far is before any Brexit, remember. Today we still enjoy exactly the trading arrangements as we did before the Referendum.

Still, I thought uncertainty alone could take us into recession after the Referendum. I wrote a post saying so, and suggested ways to think more defensively.

But as things turned out, there was no recession. Some criticism from Leavers on those warnings is understandable.

So why did the economy keep growing, against expectations?

Perhaps I and others were wrong to be so gloomy, but there were other factors – the unexpected delay in triggering Article 50, the interest rate cut (opposed by many Brexiteers), and most of all a sudden recovery in the Eurozone, ironically enough. It’s hard to have a recession when your largest trading partner is expanding, retooling, and restocking, even as interest rates are being cut towards zero.

The weak pound probably hasn’t hurt either, although it’s squeezed importers – not least struggling retailers and restaurants.

Also, while we didn’t go into recession, we did go slump from being the fastest-grower among the leading G7 economies to the slowest:

Source: Full Fact

If you’re a hardcore Brexiteer who wants maximum sovereignty then this economic hit – and even the chaos of a No Deal exit – may well be worth it.

I can respect that point of view, though I think maximum technical sovereignty is a hollow victory in our incredibly integrated world (we’re already seeing that in the compromises May struck with Brussels).²

But for the rest of us, it’s a bit sickening to imagine where we might be now had Remain won.

With Europe recovering and the rest of the global economy motoring, we’d likely have seen a mini-boom. Higher real wages, and politicians focused on all the important issues they’ve been forsaking for the phony Brexit war.

We might even have made headway with the public finances.

Pounding the point home

As for our personal finances, so far Brexit has appeared to be a boon for well-diversified British investors based in Britain.

This is due entirely to the sharp fall in the pound – something Brexiteer MPs reliable fail to mention when citing a rise in the FTSE 100 as proof the market is fine with Brexit.

As is now well understood, global equity trackers mostly hold overseas assets. Three-quarters of the revenues of the UK’s largest companies come from abroad, too.

So the sharp fall in the pound on worries about what Brexit means for Britain has actually boosted both the London market and many a diversified Monevator reader’s net worth.

Of course, that’s measuring your net worth in sterling terms, as most of us do.

On the global stage we’re poorer than before the Referendum, due to that plunge in the pound. This loss of purchasing power is showing up at the margins in higher import prices including food and fuel, and in Britain becoming a less lucrative market for EU workers. You’ll also feel it if you holiday abroad.

Investing in the fact of Brexit

Having made it thus far intact through the Brexit saga, what should investors do now?

Well, in terms of your personal finances, I think a safety first review is in order. Even Brexiteers admit crashing out without a deal in March will be disruptive. At the other end of the spectrum the forecasts are dire.

Either way, given Hard Brexit has become a very possible – if still less likely – outcome, make sure you’re sandbagged against any potential storms.

I think my original post on actions to take ahead of a possible recession is worth reading.

What about investing specifically?

Passive investors

The good news for well-diversified passive investors is they needn’t do much, if anything.

Indeed the entire Brexit saga has been another notch on the bedpost for strategies like our own Slow & Steady passive portfolio.

One of many benefits to getting your equity exposure via a global tracker (or a basket of large geographic equivalents) is you diversify away country-specific risk. This inoculates you against the dreaded ‘Japan syndrome’ – the possibility that a particular country’s stock market goes down not for a brief bear market but for an investing lifetime.

True, with the bulk of its earnings generated overseas, the UK’s FTSE All-Share is less at risk of this than most indices. But it is still good practice for hands-off passive investors to follow the global money, as we’ve explained before, and it has served you well in the face of Brexit.

Most passive portfolios will also own a chunk of UK government bonds, which have held up well.

Of course they’ve not benefited from the weaker currency, but that’s fine. A good portfolio is about balance. Bonds are not really there for return, and you’ll be happy to have some exposure to the pound if Brexit is resolved amicably and sterling rallies.

Beyond the two lynchpin holdings come corporate bonds, commercial property, foreign bonds (typically hedged) and more exotic fair such as emerging market and small cap funds, gold and commodity ETFs, as well as factor funds.

These should all be relatively small allocations, and so in the short-term they shouldn’t be determining how your portfolio fluctuates as Brexit progresses. Their aim is rather to gain a small edge over the long-term.

Active investors

When I started this post I thought this would be the biggest section. Now I’ve got here though I find myself thinking there’s little to constructive say to my fellow naughty active investors.

I can only tell you what I’ve been doing.

Note: This post should be taken as a talking point, not as advice as to what you should do yourself. I am far less sure as to how things will unfold than I was even in the financial crisis! See below for more.

Firstly, I am shifting my portfolio allocations around a lot – daily – as things change. This has a big cost in terms of friction and hassle, but, well, that’s what I’ve signed up for. (See this for more. And again I don’t advise it!)

Right now I have the smallest allocation to UK -listed companies – my traditional stock picking ground – I’ve had in 15 years, though it’s still above benchmark weighting. I’ve been especially wary of most UK-focused firms.

Percentage-wise I’m the least exposed to equities I’ve ever been as an investor, although mostly for reasons other than Brexit.

I hold huge (for me) wodges of cash as well as a handpicked and changeable collection of bond ETFs. I’m 6% in gold ETFs (hedged and unhedged).

Diversify, diversify, diversify!

For two years now I’ve also invested with one eye on the exchange rate, which has been an extra headache.

Several times I’ve increased my UK focused holdings when the outlook has looked brighter.

The pound looks undervalued, and I fear a sudden reversal if Brexit pessimism proves unfounded.

But mostly the traffic of UK holdings from my portfolio has been outbound.

This snapshot of the biggest fallers from the FTSE 100 mid-afternoon yesterday gives a good idea why:

To make matters even more complicated, many UK-focused companies are probably falling due to the growing chance of an interventionist Jeremy Corbyn government.

In fact active investors trying to position their portfolios in light of the various Brexit outcomes have to think about at least five credible scenarios (my guesses on the likely impact in italics):

Hard Brexit – Clearly now possible given the universal dislike in Parliament of Theresa May’s deal and the time left before we’re meant to leave. Bad for UK-focused shares, unclear for gilts, very bad for the pound, good for overseas earners/holdings, could see interest rates may go higher or lower.

May’s Deal (previously Soft Brexit) – The deal on the table pleases nobody (leaving aside the fact that it’s not even really a deal, just a divorce settlement and an outline for how to proceed). In the short-term at least it’s a far worse arrangement than we have now in almost every respect. But MPs might end up voting it through anyway because it’s better than Hard Brexit. Okay for UK-focused shares, unclear for gilts, good for the pound, bad for overseas earners/holdings, interest rates probably go higher.

A New Amazing Deal With Unicorns – Perhaps the Government will somehow get more time to come up with something better. I don’t believe anything much better is possible, given the contradictions of Brexit and the EU’s position, but who knows. Great for UK-focused shares, unclear for gilts, good for the pound, bad for overseas earners/holdings, interest rates probably go higher.

Second Referendum / No Brexit – Does anyone believe Leave would win a Referendum if it was held tomorrow? Brexit was blatantly mis-sold, which you’d think would be enough to reverse Leave’s slender majority. I worry about the democratic impact of not Brexiting, given how it’s been spun up as The Will of the People, but that’s for another day. Still unlikely, anyway. Great for UK-focused shares, unclear for gilts, great for the pound, bad for overseas earners/holdings, interest rates probably go higher.

General Election – Possible now, and I think Jeremy Corbyn would have a fair chance of winning. It’s unclear what the Labour party’s approach to Brexit is. Yes I know what they say, but are, for instance, the fantastical ‘six tests’ really meaningful? Bad for UK-focused shares, bad for gilts, bad for the pound, good for overseas earners/holdings (short-term), interest rates may go higher or lower.

As you can see, describing Brexit possibilities as a binary outcome doesn’t really cover it.

Moreover as these possibilities come to seem more or less likely, their consequences are brought forward or discounted on a moment to moment basis.

Traders might thrive in such an environment (though I’ve seen little evidence of that) but it sure makes the fundamental company-level analysis I mostly employ extremely difficult.

Passive is a great alternative. If I could click my fingers and do it all again I think I’d put everything into a Vanguard LifeStrategy 60/40 fund the day before the Referendum and not look at my portfolio until this is over!

How are you invested?

Finally, remember our recent discussion of mental accounting in all this. In particular factor your home into your thinking about your exposure to recession and market risks, assuming you own it.

If you’re concerned that your global trackers mean you’ll be hit should the pound rise, your house may comprise a huge proportion of your wealth that effectively hedges against that possibility.

On the other hand if you’re a stock picker who has mainly been buying cheap UK-focused shares, the opposite could apply. Your house could fall 20% or more in some Hard Brexit scenarios. Why take the risk of all your shares going the same way?

So how have you been investing through Brexit? I am sure – indeed I hope – we’ll hear passive investors say “drama, what drama?” That’s what this site exists for!

But I’d also be curious to hear how fellow travelers dark side of investing are approaching the conundrum.

1. If you count the campaigning beforehand.
2. I also don’t believe it’s what motivated a majority of the 52% in the Referendum. But let’s not start that again.

from Monevator http://monevator.com/navigating-the-brexitshambles/

House prices, mental accounting, and leaky buckets

People say odd things about the 100 to 1,500% returns they’ve made from home ownership.

• They say no financial value is created until they sell.

• They say even if they did sell they’d only buy another home, so the gains still don’t count.

• They say it isn’t real money, or it’s funny money, or it’s paper money.

• House price falls don’t count either, because of the ‘unless you sell it’s not real money’

• They also say a home isn’t an asset because you have to live somewhere. Useful things can’t be assets? (I debunked this in a different post.)

What you’ll notice if you observe this as only an obsessive property-loser like me could – green eyes pressed up against their fancy bi-fold doors, watching them toast their non-existent mortgages – is how the line varies.

Some clearly do believe their house price gains are real money, because they’ll inform you they foresaw stratospheric rises when they bought a bedsit in Balham in the early 1990s for £20,000 that’s now worth £500,000.

When such gurus speak I get out my notebook and learn all I can. It’s not often you meet prescient financial wizards.

More often, thankfully, I hear the ‘only paper money’ sentiments offered not unkindly as a consolation to people who don’t own their own home.

Yet saying your six-figure house price gains aren’t real comes across as about as self-aware as a supermodel giving tips on succeeding on Tinder by wearing a hat.

What anyone normal sees if you got onto say the London property ladder 25 years ago with a £10,000 deposit and a £100,000 mortgage is you now own an asset worth perhaps £700,000 – a gain far north of half a million quid.¹

Agreed, the homeowner will have paid a mortgage on top – but remember the We All Have To Live Somewhere clause.

Non-homeowners pay rent, moving costs, and they go to IKEA, too.

We can quibble about the precise numbers, but given landlords (i.e. professional homeowners) aim to profit from renters, it’s clear owning over the long-term isn’t usually a bigger financial burden than renting a similar property.

The net result is Person A bought and owns an asset worth maybe £700,000.

Person B didn’t, rented instead, and doesn’t.

Yet I’m told Person A is not better off than Person B, because it’s not real money.

Have I got that right?

Mental accountancy: The number of the beast

I’m having fun, but this isn’t really a post about the specifics of house prices, or the rights and wrongs of the market – or even sour grapes!

(And yes, I do still owe you an article on why I did finally buy my own flat. It’s coming. Prepare for an anti-climax.)

Today I’m more focusing on this mental accounting people do.

Mental accounting is why they say their home is not an investment, and that house price gains and losses aren’t real.

Their mental accounting is also what can makes them sound so insensitive when they tell you they’re not really better off, because when they sell this £1m property they’ll only have to buy another bloody one.

In reality they could sell-up, rent, and have all that cash in the bank, or in a diversified portfolio of shares.²

But the house equity lives in a different mental bucket, so they rarely see it that way.

Mental accountants I have known

I have a close friend who is of the ‘house gains aren’t real money’ mindset.

Helped by a chunky family-funded deposit, he bought his first flat in a gentrifying part of South London in the late 1990s.

A bighearted person, he has often acknowledged his good fortune in getting help onto the ladder. He even charged me a mate’s rate rent as my landlord for a couple of years, which I didn’t expect and appreciated.

Yet he has shrugged off the growing value of his property assets over the years – even as the equity came to dwarf his other savings and any sensible multiple of his income – due to the ‘needing somewhere to live’ theory.

I saw things differently (increasingly so, as prices got away from me) and said so whenever the subject came up.

Things came to a head recently when he suggested I finally join him on one of his incredibly regular foreign holidays.

I’m also currently single and childless, he said – why not enjoy myself? After all, now I’d finally bought my own flat too I could surely let my hair down.

That – ahem – triggered me.

As tactfully as I could after 20 years debate and several glasses of wine, I pointed out that to buy my flat I’d had to find more than £500,000 from somewhere that he had never had to.

He might not consider his price gains real. But the price rises are very meaningful to someone who has to pay them in today’s market!

In short, he could take a couple of hundred holidays costing £2,500 or so over the next 25 years – maybe 5-10 a year – before I’d be in the same position as him.

Not my finest hour, granted, but there’s only so much you can take of someone saying it’s meaningless trivia that they live in a property that would today cost them roughly 20-times their income before you snap.

His mental accounting met my mortgage budgeting, and there were fireworks.

But…

…it’s actually worse than that. Because I’m sure you saw what I did there.

What earthly reason did I have to set holiday costs against the gains on his flat?

There is no good reason. I was just mentally bracketing them together in the moment to wallow in my martyrdom for a few minutes – and perhaps to get out of an expensive holiday without resorting to voicing environmental qualms or my tightwad tendencies. (I see them more attractively, of course!)

I was fudging the figures for both of us. Instead of his housing equity I could have mentally positioned my investment portfolio against his meager ISAs and booked us both tickets to go.

But sadly I’m only human (my exes may disagree) with the same fit-for-the-savannah mind as everyone else.

And achoring, framing – many of behavioural finance’s Greatest Hits – all featured in that exchange.

More mental accounting

Examples abound:

• I’ve friends who say they have no savings. Over time I’ve learned (out of concern) most have fairly sizeable pensions. They don’t count these as savings, because they’re locked away for old age. But they are savings. If they didn’t have them, they’d have to start acquiring them.

• An active investor will sell half of a share holding that has doubled, and consider the residual investment to be free and losable – even though they’d baulk at working overtime for weeks to earn the same amount. See also Las Vegas gamblers and crypto-currency investors after the bubble burst. Sorry, your losses are real money losses.

• Passive investors will say a market decline doesn’t affect them because they are in it for the long-term. But there’s no guarantee the market will come back – or thanks to sequence of returns risk do it before they want to start spending. If your portfolio halves, it halves. You’re poorer, for now.

To be clear, I believe the passive investing mindset is the right way to go for most.

For that matter I’ve nothing against active investors diversifying out of winning shares, or gamblers resorting to mental accounting trickery to get some money off the table.

The key is to be aware when you’re doing it – because mental accounting can cause problems.

Consider an emergency fund. In my book, that’s a wodge of cash set aside to deal with emergencies.

Yet others will say their emergency fund is covered by their credit cards, or a share portfolio that they’ll sell down if they have to.

Such a strategy to meet cash needs may be right for them (I don’t advise it) but it does not have the characteristics of an emergency fund.

Share portfolios fluctuate, unlike cash.

Credit limits can be cut – perhaps just when you need the cash, and in the worst case for the same reason. And if you’ve just lost your job and need ready money fast is that really the time to go into debt?

Even an allocation of cash in a portfolio that’s mentally accounted for as doing double-duty as an emergency fund might lead you astray.

Perhaps you’ll own few to no bonds because of that cash. Then the market crashes, there’s a recession, you get a lower-paying job – and while you do have the cash to see you through, you didn’t enjoy the counter-balancing benefits you might have had with bonds, because instead you had cash moonlighting in two roles at once.

Worst case is you sell your shares at the bottom, because as you withdraw and spend cash from your portfolio, what’s left comprises an ever-higher proportion of equities that are falling in value, until you get scared you’ll lose everything. If your emergency cash had been mentally accounted for and separate in its own savings account, you might have ridden it out.

The truth is you never had an emergency fund. You had a flawed mental model.

There are also societal consequences of mental accounting.

You might choose to think of your home equity as paper money or not an investment, because you have to live somewhere, or because the costs and time involved in selling make it somehow not an asset in your view.

Fair enough, your call.

But the widespread acceptance of such thinking leads to the situation where as a society we’re asked to have sympathy for cash-poor pensioners rattling around wholly-owned five-bedroom family homes in the midst of a housing crisis, when they could sell up, downsize, and be flush with spending money.

Holding your finances to account

I try to counter my mental accounting with a giant spreadsheet.

This consists of a master sheet that details my best current estimate of my net worth from all sources.

Sub-sheets cover things like my share portfolio, my cash accounts, my unlisted investments, my flat and my mortgage, and other bits and pieces.

Some of the underlying sheets are updated automatically via the Web, others occasionally manually updated by me. The master sheet pulls from all of them.

Like this I can ‘bucket’ my money and investments as our brains seem to want us to do, but I also keep track of the true big picture.

I can also create novel perspectives on my financial status, by dividing various numbers by others. For instance I can work out my own debt-to-equity ratio, my liquidity position, or how exposed I am to property versus shares.

I break out what’s sheltered from taxes, and how, and what’s not.

In recent years I’ve even included an estimate of how exposed I am to different Brexit scenarios via the investments I’ve made (including my flat).

Some of this might seem wonky. But the point is I have many different angles on my finances – conventional and unusual – so it’s harder for me to delude myself.

If you do this, you might realize you’ve got more money tied up in your property than your pension, for example – or vice-versa.

You might see the £5,000 you keep in cash earning 1% that feels like such a drag on your returns is really just a small proportion of your total wealth including all your assets. It may be revealed as a small price to pay for the security of having cash on tap if required.

And if you don’t think your house gains are real money because it’d cost you to move, then fine, apply a discount of 5-10% on the appropriate sub-sheet. That’ll be a more accurate version of reality than pretending it’s still 1997.

Bottom line: However it’s wrapped up, whatever it’s earmarked for, whether it’s easy to get hold of or a right pain – it’s all the same real money.

Share your own examples of mental accounting in the comments below!

1. In practice you probably moved a couple of times, but of course those wonderfully untaxed gains go with you.
2. I’m not saying they should – again, this post isn’t about the rights and wrongs of property ownership. It’s about how people think about it and other assets.

from Monevator http://monevator.com/house-prices-mental-accounting-and-leaky-buckets/

Weekend reading: It’s not perfect, but historical data is the best we have to go on when investing

What caught my eye this week.

Writing a regular personal finance and investing blog isn’t all glamour, acclaim, and partying with insouciant French models, you know.

Sometimes it can even be a tad dispiriting.

You, dear reader, can come across a comment like…

• “I don’t see the point in bonds – I decided not to buy any when I started investing 18 months ago and I haven’t looked back!”

or…

• “Stop trying to pump up FED-inflated shares even higher I bought shares in 1999 and they crashed in 2000 and I lost everything IT WILL HAPPEN AGAIN.”

or…

• “Index funds are for losers. I got my Amazon shares in 2005 when I didn’t know what I was doing and then forgot I owned them and now I’m rich.”

…and you can shrug and be glad you decided not to invest with that particular active fund manager.

(Ha ha. Little joke there, active fund manager friends.)

But as someone who has been writing a blog about this stuff for ten years – well over 1,000 articles in total – it’s hard not to take such silliness personally. Especially when it’s written in the comments of your own website.

It’s understandable that investors in the 1930s, the 1950s or even the 1980s might base their beliefs about investing on personal experience.

Up until the 1990s you had to hunt to find good books about investing.

As for accessing data to reach your own conclusions and devise the right plan – you had to be rich already to buy that data in the first place!

Nowadays though we’re drowning in solid investing advice. Obviously lots of rubbish, too, but there’s so much good stuff being written it’s almost excessive. Filling this page with links every week takes a while, but it’s never for a lack of decent material.

Resources like the wonderful Portfolio Charts has brought data to the masses, too.

So why do some people persist with hokey homemade theories based on just a few years’ personal experience?

Presumably it’s evolutionary. There is good reason to believe what you’ve seen before with your own eyes when another caveman tells you to go cuddle a sabre-toothed tiger.

But as Michael Batnick pointed out in his Irrelevant Investor blog this week, your personal experiences and mine may differ wildly – and when it comes to investing both may be inadequate when it comes to the big picture.

Look at how various cohorts of investors fared with the S&P 500 over the first ten years of their investing life:

Those are extremely different outcomes. As Batnick notes:

Consider an investor who started in 1946 (black) versus one who started in 1966 (light blue).

The former got the chance to invest in a market that compounded at 16.7% while the latter saw stocks compound at just 3.3% while being ravaged by two bear markets.

Now you and I might look at that graph and conclude luck plays a huge role over the short-term in investing.

Some ambitious folk might even believe the graph demonstrates that you need to pay attention to levels of market valuation or momentum when deciding how much to allocate to shares – though I wouldn’t recommend it for most.

But what one should clearly avoid doing is concluding “shares are the only place to be” because you happened to get going in 1946 or “when I hear the phrase ‘stocks for the long run’ I reach for my revolver” because you started investing 20 years later.

True, we can never be sure the future will look like the past.

But it must be better to be aware of a hundred years of ups and downs than to believe investing started the day you opened your broker account.

From Monevator

Asset allocation starts with defining your investment goals – Monevator

From the archive-ator: Bitcoin is a bubble. Probably – 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 property market is weakest for six years, says RICS – Guardian

Record number of markets have negative total return (in USD) in worst year since 1901  [by that measure] – Bloomberg

UK economy grows at fastest rate since late 2016 – BBC

5.8m Britons excluded from mainstream finance [Search result] – FT

The firms that have switched to a four-day week – Guardian

Chinese headmaster fired over secret crypto-mining operation at school – BBC

43-year old presidential hopeful offering $1,000 a month to all Americans – CNBC

Real wages picking up, fastest growth in nominal wages for ten years – Deloitte

Products and services

Interactive Investor scraps exit fees for all customers – Moneywise

Government announces probate fees hike – Money Saving Expert

Is rent cheaper in the next street? [Interactive map] – BBC

Ratesetter will pay you £100 [and me a bonus] if you invest £1,000 with it for a year – Ratesetter

Would you spend £50 a month, Netflix-style, to go on three weekend holiday breaks a year? – ThisIsMoney

Comment and opinion

Things you see during every market correction – A Wealth of Common Sense

The magic – and danger – of compound interest – Moneywise

What is early retirement like? – Young FI Guy

When things get wild – Morgan Housel

Busting the myths of investment: Do equities outperform bonds? [Search result] – FT

Tracking alpha’s shrinkage [Why ever fewer funds beat the market] – ETF.com

Merryn Somerset Webb: Life begins at 60 [Search result] – FT

You are never done being you – Abnormal Returns

The power of passive [On market/industry structures] – CFA Institute

Inflation, not recession, is the big risk for investors – Forager

You are what your record says you are – Epsilon Theory

Investing in venture capital [I’m writing a series on this, too!] – Value and Opportunity

‘Bonds with a twist’ sends worrying message on risk – The Value Perspective

For stock pickers: Selling Victrex after a rapid turnaround – UK Value Investor

Buffett’s underrated investment attribute – Base Hit Investing

The odd factors: Profitability & Investment [For investing nerds] – Factor Research

Brexit

Brexit is teaching Britain its true place in the world [Search result] – FT

Pound skeptics turn believers as divorce deal looks near – Bloomberg

Cabinet Office investigates leak of Brexit PR plan it claimed was “not genuine” – Andrew Adonis via Twitter

Kindle book bargains

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

Tiny Budget Cooking: Saving Money Never Tasted So Good by Limahl Asmall – £1.09 on Kindle

The Strategist: Be the Leader Your Business Needs by Cynthia Montgomery – £0.99 on Kindle

A Street Cat Named Bob: How One Man and his Cat Found Hope on the Streets by James Bowen – £0.99 on Kindle

Off our beat

David Attenborough has betrayed the living world he loves… – Guardian

…though on a happier note, the global fertility rate is collapsing – BBC

Britain’s renewable energy capacity overtakes fossil fuels – Reuters

Why the robot apocalypse might not be intentional – Schroders

Trump calls CNN reporter ‘the enemy of the people’ [Video] – Reuters via Twitter

In China, Bill Gates encourages the world to build a better toilet – New York Times

Four forum posts about software that changed the word – Chris Dixon

And finally…

“It’s a huge positive step forward if you can embrace the fact that you don’t have the edge to beat the markets. It will make you a better investor and leave you wealthier in the long run while spending less time worrying about your investments.”
Lars Kroijer, Investing Demystified

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”.

from Monevator http://monevator.com/weekend-reading-its-not-perfect-but-historical-data-is-the-best-we-have-to-go-on-when-investing/