My advice to the trustee could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard‘s.) I believe the trust’s long-term results from this policy will be superior to those attained by most investors—whether pension funds, institutions, or individuals—who employ high-fee managers.
At the turn of the century (well nearly 20 years ago) cash was a usable asset class. For those wanting to “safeguard” capital and receive an income it seemed the perfect choice; £100,000 could provide an “income” of around £5,000 per annum. In 2008/2009 this all changed as globally, interest rates dropped to near zero; […]
As fads and phases in markets and economies come and go, the smouldering wreckage of once hyped ‘must have’ investments often lie in a worthless crumpled heap next to people muttering. ‘But I really thought this time was different’ It rarely is!
George and I spend many hours discussing the politics and economics of the world, with reference to where and how to most productively employ capital. We try, in doing this, to separate the personal from the strategic, so what I will write is not necessarily my own view on what would be best or honourable but rather an analysis of what we currently see as likely to happen and why.
I have just returned from two weeks away on a Greek Island. Although we had Wi-Fi, I had decided before we left that I wouldn’t check emails nor would I engage with the news. The last time I did this was in 2011; I remember getting on the ferry back from France and reading that […]
How many of us remember the events 2001 or 2008? Over the ten or so years since 2008, only in 2011 did we see a negative year through fears on the fragility of the global economy. In fact, over the last ten years it has been easy to forget that markets can go down, as well as up.
Two years ago, I was talking to a friend; the conversation went along the lines of, “2016 was good, but markets are going to fall so I am going to take my money out of the market and hold it in cash”. My friend then went on to explain that once the markets had reached the bottom, he would re-invest his money. I asked the question I always ask in these cases; what is the money for? He explained that the money was in a pension fund which he didn’t need and was planning to leave to his children.
a penny doubled every day for 31 days will be worth over £10 million at the end of the period Over the past few months I have produced several blogs looking at investing, market timing, and risk and volatility. To end this series I want to focus on the key message behind everything our financial […]
One of my favourite TV programmes is Only Fools and Horses. The immortal words “this time next year, Rodders, we’ll be millionaires!”, will forever be stuck in my head! In almost every episode Del had another money-making scheme; each time they never seemed to come to fruition. Ironically after all those years of scheming, the […]
A real lesson for investing is that for it to work, the process is pretty boring. You must be prepared to sit and wait for things to play out. Our brains are naturally wired to avoid pain and seek pleasure. When there is so much information available to us, there is often a blur between […]