Newsletter – October 2024
- Volatile Market Prices
- Virgin Money – Review
- eToro – Review
- New Portfolios on My Website
- Performance & Costs
- WTF (What’s the Fact?) – Holy Uncalled For
Volatile Market Prices
Prices of shares and bonds are being pushed around at the moment as folk try to understand what various governments and central banks are up to.
The general rate of inflation in most big economies is falling and that’s allowing central banks to lower interest rates. Lower interest rates make borrowing cheaper giving customers more disposable income and companies cheaper access to money that they can use to invest.
However, central banks are getting serious about reversing the actions they took to support the economy in the aftermath of the financial crisis in 2007 to 2009.
That reversal means that there is lower demand for bonds which sends their prices down.
At the same time, folk are worried that we might be entering an economic downturn, which would suggest lower profits in future and, therefore, lower prices of company shares.
It’s all a bit up in the air as we also hope for common sense to break out in various global conflicts that have made trade difficult and pushed prices of oil and whatnot up.
As always, my mantra remains the same: rebalance once a year and, for the rest of the time, just get on with my life. That being the case, you might be wondering why I’m explaining this market malarky; it’s in case you’re interested or worried. I don’t think there’s reason to worry IF you are a long-term investor with a diversified portfolio.
New Review: Virgin Money
A simple but restricted offering that’s a bit pricey. For investments of under £25,000 in total, this might be OK. But the fees quickly become uncompetitive after that, despite a relatively low basic charge for running a Self-Invested Personal Pension.
They skirt around the trading fees and don’t show net performance, which is fairly common, but goes against their otherwise justified claim of keeping things open and simple.
Finally, their selection of just four portfolios means that you’re relying on their research. I prefer to copy the overall investment decisions of 150 funds rather than relying on the opinion of just one.
eToro – investment platform review
This one is best suited for high-risk trading on things like cryptocurrency (Dick Emery helped me convey my opinion of cryptocurrency – click here to see that).
eToro doesn’t offer a SIPP and it uses Moneyfarm to provide an ISA. With the platform’s focus on USA-based trading and spread bets, the offering of low-cost funds is terrible. I could only find one fund that passes the test to make into my portfolios. The rest were either expensive, irrelevant or domiciled in the USA and, therefore, unavailable for me to buy directly into.
Pinning this information down took a lot of searching and several messages to their helpline which only started to be useful once I’d set up an account.
I see no point in a sensible, long-term UK investor using eToro.
It gets featured in several “best of” lists and I can only assume that this is because of eToro’s affiliate marketing programme which pays handsomely to anyone sending it a new customer; I’m NOT going to recommend it to you no matter how much they offer me to do so.
New Portfolios on the Website
I’ve updated the website to include three new portfolios that I’m running click here to see them.
- £10k Medium-Risk Rated Portfolio
- £50k Medium-Risk Rated Portflio
- £50K Higher-Risk Rated Portfolio
The numbers will be updated at least monthly so you can see how they are performing and what the charges and fees are down to the last penny. This is something that far too many investment companies refuse to do. They’ll say that it’s because it’s too difficult to provide the returns after fees.
I suspect it has more to do with showing the highest number possible and keeping your attention away from how much of your investments they’re helping themselves to.
Performance & Costs
Chart: Return since inception of my Higher-Risk Rated £10,000 portfolio. Data as at 20/09/2024, sourced from Refinitiv Eikon & David Ryder.
My Higher-Risk rated portfolio (set up May 2023) performance to 20/09/2024: +20.62% gross, +18.85% net (after costs).
Industry average (3,999 firms across 2023) +2.82% gross.
Click here to see all my portfolios in more detail
WTF (What’s the Fact?) – Holy Uncalled For
I saw this headline on the BBC the other day and it brought back some memories.
That headline could not be applied to the secondary school I attended; very little learning went on there as far as I could see.
As you can imagine, I was a model pupil whom all teachers found to be a joy to teach. The school I attended was very religious hence, when our dry-as-dust computer science teacher sneezed in an otherwise deathly silent lesson, I took it upon myself to say, “bless you my child”. For some reason, he didn’t seem terribly grateful. But he did enjoy my company sufficiently to invite me to remain an extra 10 minutes before heading home that evening.
Much like the woman who was head of “home economics”, the computer science teacher had a moustache. In the rare event that a pupil cooked something edible, the head of HE would demonstrate her understanding of “home economics” by helping herself to the pupil’s meal.
At the other end of the scale was the youngish German teacher by the name of, and I kid you not, Mrs. Hunn. She didn’t stay long at my school because she made the cardinal error of being a good teacher.
No such danger with the head of English; a Scotsman with an Irish name, obviously. He made sure that the syllabus was never completed and, as a result, two consequences were achieved:
- 31 out of 36 pupils in the top stream failed the GCSE/O-level
- He kept his job.
All in all, this religious experience might have put the parents in mind of the shortest sentence in the Christian bible, “Jesus wept”. Being teenagers, it put us more in mind of a two-word phrase that begins with “Holy”.