Category Archives: Personal Finance

What is the minimal risk asset?

This article about minimal risk assets is by former hedge fund manager turned author Lars Kroijer, an occasional contributor to Monevator. He also wrote Investing Demystified. I believe any private investor can create a sound and well-diversified investment portfolio by using just two assets as building blocks – a world equity index fund, and an…

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Investing for beginners: What is a share?

Most people who invest their money for the long-term decide they should own some shares (or equities, as they’re also called). This is a good idea. Over the past 116 years, the UK stock market has historically delivered an average after-inflation return of 5.5% a year.1 In comparison, bonds have returned on average just 1.8%…

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The simplest way to rebalance your portfolio

What’s the right way to rebalance a portfolio is a question often asked and about as simple to answer as what’s the right way to end a relationship – the results vary according to circumstance and personal style. A number of different portfolio rebalancing methods exist, but there’s no clear-cut evidence that there is one system…

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Weekend reading: How high property prices are making many of us relatively poorer

Good reads from around the Web. I think we’re nearly all agreed now that UK property prices are too high, and in the South East at historically stretched levels compared to rents or incomes. You do still hear from the odd Barry Blimp who says that it was just as difficult to buy in his…

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Currency hedged ETFs are one response to the weak pound

Last year’s stellar returns for UK passive investors came with a snag: What goes up can come down. Global trackers and all-in-one products like the Vanguard LifeStrategy fund delivered superb returns last year. But this was in large part due to big moves in the exchange rate. UK listed shares only account for about 7%…

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FX Markets Shrink While Bitcoin Expands

Daily foreign exchange market volumes have shrunk for the first time in 15 years, according to the Bank for International Settlements (BIS). Banks are increasingly becoming worried as the BIS, which is owned by central banks, warns them of impending financial stability risks. On the other hand, the bitcoin price continues to rise, reaching its…

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80% of Businesses Lose to Ransomware via Social Media, Phishing

Over 80% of hacked companies reported that attack entry points were phishing emails and social media, according to a new report by SentinelOne published on Friday. Also read: ‘No More Ransom’: A Summer Ransomware Project by Tech Security Giants ‘Immediate Need for Better Solutions’ The latest findings compound evidence that business security is no match for today’s…

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Can I live like a millionaire?

Beer money, champagne taste is a criticism that can be leveled at a few acquaintances of mine – not least a good friend who lives in fine style for the present but reacts like Dracula to sunlight to the word “Pension”. Recent jousting over our contrasting lifestyles (“You can’t take it with you!” comes his…

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Recommended reading: Have you fallen in love with money?

Good reads from around the Web. Are you a prudent saver who regularly runs the numbers on your potential post-retirement income? Or are you a Scrooge McDuck who has fallen in love with money for its own sake? The title of a John Authors’ article in the FT this week – Is Greed Good? No,…

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Can the Federal Reserve Really Save the US Economy?

Is the US Federal Reserve still capable of reducing negative effects from recessions and other economic shocks? Not without drastic measures, says a critic. Also read: The Federal Reserve Gets on Facebook, Greeted by Angry Bitcoiners More Extreme Measures The answer is yes – at least, according to a paper by the Fed’s own deputy director…

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This former hedge fund manager reveals how you can invest for life in five quick videos

I have spent years looking for the best way to get people interested in investing – and to teach them how to do it once they’re hooked. Some methods work better than others. But with bribery expensive and the threat of physical violence a clear violation of my parole conditions, video has proven to be…

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Index trackers: The good, the bad, and the ugly

Commentators often describe index trackers as plain and simple vanilla funds, benign enough for even the most inexperienced retail investors. But in reality, the investing industry is a hothouse of evolution, continually breeding products that pass themselves off as cuddly trackers, but which can conceal retractable claws. The following product types may all be classed…

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The real return on cash is going negative

I don’t know if Bank of England governor Mark Carney is a Monevator reader (perhaps he’s the guy signed up as FoolsGold65) but whether or not he read my Brexit articles he seems to have reached a similar conclusion to me. Some said I was a doom-monger when I suggested it was prudent to prepare…

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Is it really worth trading in your index fund for a cheaper model?

There’s not a lot to jump up and down about as a passive investor, which is why we tend to get over-excited around here whenever a new index tracker enables us to trim our costs by another 0.1%. It’s rather like a retired detective deducing who ate all the cake at their kid’s birthday party.…

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Bitcoin is the Ideal Portfolio Asset

Bitcoin truly is a new asset class that investors should take seriously, not just because of the extraordinary returns thus far, but because of its correlation to everything else. Also read: 4 Reasons Why Bitcoin is Outperforming Everything It’s All About the Correlation The holy grail of portfolio management is to find an asset with…

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Am I saving enough for retirement?

I am sure we’ve all (at least around these rarefied parts) at some time asked ourselves: “Am I saving enough for retirement?” For years, it’s been a boringly predictable question that has been used to frighten people into upping the amount that they put into their pensions. Towards the end of every tax year, for…

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Conjure up big savings without sacrificing your quality of life

Saving hard can hurt, but you can turn it into a psychically sustainable experience by aligning your budget with your values. True, if you have the values of a Russian Oligarch or the cast of The Only Way Is Essex, then this prescription is not going to work. But if like 95% of the human…

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