Fundbuyer’s Checklist
We give a checklist of 8 things to consider when buying a fund. This list helps you make a reasoned and considered choice when deciding on which fund to buy. It also helps you record why you made a purchase.
How I Invested 20k Using ETFs and Vanguard Direct ISA
You asked on YouTube how I would invest £20k of my own money. Here is my answer illustrated with my Vanguard Direct ISA. I take you from planning the portfolio using a correlation tree via macroeconomic indicators, valuation and then implementing the actual trades in my Vanguard account.
China for Investors with George Magnus
China has the second largest share market in the world behind the US. If China stumbles it affects all global markets. If you are an investor you need to stay informed about political and economic developments in China. The renowned economic George Magnus shares his knowledge of China; you literally can't afford to miss what he says.
Are ETFs Dangerous?
An active fund manager has launched a broadside against passive Exchange Traded Funds. He claims that ETFs are like a blindfold for investors which will make the whole market stumble when the next downturn arrives. We disagree, and here are the reasons why...
Interview with Chris Stringman author of “Win, Lose, Repeat”
Chris Stringman is a "regular guy" who got involved in financial spread betting and lost £130,000 as a result. He wrote a book called "Win, Lose, Repeat" and in this interview, he gives us some of his motivations for writing the book and how he kicked his spread betting gambling addiction.
Fabulous Fulcrum Fees From Fidelity
Fidelity is a global investment company with 45,000 employees and $6 trillion in customer assets under administration: when Fidelity talks people listen. They have just announced that they will offer performance-related fees ("fulcrum fees") because active fees are a "challenge the industry can no longer duck and has to tackle head on... only active managers who provide demonstrable value will thrive".
Why I’m Not Cheering 80% UK Fund Outperformance for Mid 2017
S&P has published it's mid-2017 S&P Indices vs Active (SPIVA) Europe Scorecard. This is a very large-scale international survey performed[...]
What is Money Illusion?
When it comes to wage negotiation, employment contracts and financial planning, few people consider the effect of inflation. This is money illusion, and the best way to conquer it is to understand inflation: how it is measured, where to find the numbers and what they mean.
The Mayfly and Methuselah
Our lifespan dictates our behaviour. If we invest like Mayflies, which live for a day, the returns we earn will be dominated by unpredictable noise and amount to gambling. If we invest over decades the noise fades and we are exposed to steady and more predictable earnings growth.
Animal Spirits Rule
Robert Shiller launched a whole new field of behavioural finance in 1981 when he showed that markets are just too volatile to be priced rationally. His ideas, which won him the Nobel Prize for economics, will help you keep your feet solidly on the ground during market bubbles or crashes.
High Returns from Warped Risk
Why are we so scared of market crashes? We consistently overestimate the occurrence of these, and other, rare events and this distorts the prices of particular assets. We also focus on anecdotal information rather than general information. The best forecasters work around this cognitive bias by always using general information which dodges this cognitive bias called base rate neglect.
Death of the Alpha Cult
You know you're in a cult when your leaders lay claim to secret truth not in anyone else's possession, put down other groups, penalise you for leaving, and discourage you from asking questions. While commonplace in extremist religious cults these practices should have no place in the fund management industry. We explore why the Alpha Cult is slowly dying.
Overconfidence Makes You Poorer
We are taught to be confident and decisive, but when it comes to investment this behavioural flaw is proven to be a highly significant drag on your wealth. We present the evidence for this startling fact and describe workarounds to avoid this pitfall.
Interview with Ryan Barrows of Vanguard UK
Vanguard has cut a swathe through the US fund management industry with its zealous approach to keeping costs for investors as low as possible. It now manages over $4 trillion dollars of funds in the US and in May 2017 it launched a low-cost platform selling directly to UK investors cutting out expensive intermediaries. In this interview, Ryan Barrows, Head of Business Development for Vanguard UK, describes the new ultra low-cost platform that allows investors to buy Vanguard funds, complete with ISAs, Junior ISAs and, soon, SIPPS.
Why We Underinvest
Most of us are not saving enough for retirement, and behavioural economics and cognitive biases give insight into why this might be the case. But how can we overcome these limitations to become better guardians of our own financial welfare?
Review of Fundsmith Equity Fund
Fundsmith's Equity fund has consistently beaten its benchmark and is attracting investors as a result. But can this outperformance continue? We doubt it.
Why Fees Matter
Compound interest works in your favour when you invest. Unfortunately, compounding also boosts fees such that an innocuous percentage builds up over time. You may be shocked at the long-term effects on return. We illustrate this with a simple example, give you a spreadsheet to play with and look at what you can do about it.
Review: Spare Change by Iona Bain
Most investment books make false promises about getting rich. Iona doesn't do that. She explains how you should shape your finances around your life goals and how to avoid behaviours that will stop you achieving those goals.
Interview with Dan Brocklebank head of Orbis UK
Orbis is an active fund manager with a difference. They have a radical performance-related fee structure. This aligns their incentives with your investment performance rather than the fixed fee on offer from most fund managers. If they consistently underperform their benchmark their fee won't cover their costs. Dan Brocklebank shares how they find the next generation of stock picking experts and how their fee structure works in practice.
Review of Orbis Access: Active Management With A Radical Fee Structure
Orbis Investment Management offers a performance related fee for the two global funds which they offer to UK investors. If Orbis underperforms they lose some income. How does it work, and are there any drawbacks?