finfish: an investment monitor of UK Newspapers

Do you feel safe?

2012-02-11T19:11:00.000Z

Have defensive stocks seen their day? OK, you might think not but Merryn Somerset Webb in FT Money (11-12 Feb) puts forward an interesting case. The case against them to sum it up is that defensives do not look as good as they did (aka, 1) they are 'where most people are' including momentum traders, 2) Tesco despite considered as a defensive stock has found itself in recent trouble, 3) yet a majority of them continue to report high profits despite the bizarre market conditions). What MSW thinks is that these companies are firing staff, increasing cash piles, increasing profits and the bonus pot. And this is where, the public, worldwide are beginning to find the bonus culture increasingly unpalatable which will lead ultimately to legislation and controls over pay incentives. Such a move would be welcome seeing value returned rightly to shareholders. In addition, Quantitative Easing will also push prices higher as it has done which will make people think twice about placing their money in defence shares.

Shape Shifting: confidence grows in equities

2012-02-11T18:10:00.000Z

It might well be frosty outside but January has seen an air of optimism as we have gone through a recent period of positive company reporting. Now to February and colder weather has encroached across the Channel here to little ol' England. The metaphor is of course, the debt storm of Europe is gathering dark clouds again. The basket case which is Greece continues to defy political and economic logic but it is sure to raise concern again. So reading the FT Money this weekend (11-12 February) there is optimism out there that confidence is growing in equities (in the long-term management of debt is improving, US markets are gaining more confidence and China might not turn out to cause due concern). Last week we reported on confidence from Fund Managers wanting to invest in Smaller Companies, could the same be said for growth stocks? Matthew Vincent in his article, Pendulum swings in favour of equities asks that very question. Apparently, Fund Managers are increasing assets with higher risks. But Fund Managers are mixed as to which global market is likely to show best growth, Europe, US, Japan, Emerging Markets? Consensus appears to rate investment in this order: EM, Europe, US and Japan. But before you get excited, FM warn this is merely a short-term position with potential threats possibly to emerge later in the year.

Small to large

2012-02-04T18:39:00.000Z

David Stevensen (FT Money, 4-5 February, 'Experts think small...for larger returns') caught my eye this week as I have recently focused my portfolio to include and increase smaller company funds and its interesting to read that conversations that David has had with fund managers suggest a risk-appetite returning with increasing investments in smaller companies. Now, may possibly be a good time to invest. Underlining this is research which shows that increased risk in smaller companies does pay off in the long-term. Along the way though you will find yourself taking a roller-coaster ride with increased losses in some years. However, as Stevensen points out, this year will be exceptionally tough for smaller entities and that can be witnessed in wider discounts of investment trusts which focus on small-cap investments. Some small-cap ITs are suggested: Standard Life UK Smaller Companies, Montanaro UK and European Funds, Blackrock UK Smaller Companies and Aberforth Smaller Companies. All possibly good funds but Stevensen suggests another route, investments which focus on fledgling indices, and what better way than to partly track the FTSE Fledgling Index via the Henderson Fledgling Trust. 65 per cent of this is fund tracks the index while the remainder is actively managed. But it's worth noting that this fund also is investing in companies dropping out of the FTSE 250 and finding themselves in the FTSE Fledgling index. The problem is in such tough trading conditions how many will survive? If you like scary rides go for it.

See also: http://www.trustnet.com/News/Research.aspx?id=308955; http://www.trustnet.com/News/Research.aspx?id=308954

Feed the world

2012-02-04T16:32:00.000Z

The Times reveals why agriculture should be where your money is if you're a long-term investor. With the population of humans set to increase by 2.3 billion by 2050, feeding so many mouths will require agri-business ingenuity. But that's only half the story. One of the controlling factors is increases in earning potentials whereby diet changes with greater intake of more meat. In addition, environmental factors such as a reduction in land availability due to sea-level rise and changes in use from agriculture to housing or to production of biofuels mean food production is becoming squeezed. Production is also affected by factors such as the economic climate and the weather which in a warming world which may produce erratic summers impacting production.

There are a number of funds available for the investor including many ETC products which track the price of agri-commodities, unit trusts and individual companies (food production, fertilisers, tractors).

Institutional Investors Warm to Africa: VIDEO: Africa is seen as an increasingly attractive destination for instutional assets, according to a recent report from Invest AD and the Economist Intelligence Unit

2012-01-30T20:05:00.000Z

I'm always amazed each time I go to Africa. It seems such a great place to do business as I get the impression that the African continent loves to trade. Anyways, check this story out.

Institutional Investors Warm to Africa: VIDEO: Africa is seen as an increasingly attractive destination for instutional assets, according to a recent report from Invest AD and the Economist Intelligence Unit

What of Japan?

2012-01-29T13:07:00.000Z

Japan is interesting again (again). I say this because of course Japan has been seen as a basket case but once in a while commentators review this country's situation and promote investment. The last time was when the tsunami struck (http://financefish.blogspot.com/2010/03/japan-update.html). The Times suggested it was a shelter that might weather the debt storm in Europe. It certainly proved to be for anyone investing shortly after the tsunami. Merryn Somerset Webb in the FT Money (28-29.01.12), always a wise source of information, reviews the Japanese situation. Apparently, equity valuations are low, battered by earthquake and sea but this doesn't mean to say Japan itself will be swallowed up. Have doubts been overplayed in the market place?

But concerns surround a collapsing Yen, followed by hyperinflation or a fiscal panic leading to a rise in bond yields, equities would respond. But the reason why we end up reviewing Japan and looking on hopeful for investment returns that appear to evaporate is linked to a rising currency. And, that comes back to the fact that right now it's a safe place to be. However, as the western developed nations de-leverage to maintain their heads above water in the wake of continuing Chinese development and competition, that leaves Japan high'n'dry in the view of its exporters. Stirrings have started in political circles. It might take time as MSW states but the pressure is building.

See also: http://www.trustnet.com/News/Research.aspx?id=308630

TrustNet world provides some wise words of advice

2012-01-28T21:50:00.000Z

QE does us good
We start off this entry with an interesting view on Quantitative Easing (QE). http://www.trustnet.com/News/Research.aspx?id=304911. The view is, there will be more QE to come as western democracies including Europe grapple with over-burdening debt and a need to reevaluate their currencies as the only answer against the Chinese currency, the Renminbi.

A cautious tale...
TrustNet also provides some analysis on what a 'cautious' portfolio should include with this article, http://www.trustnet.com/News/Research.aspx?id=305135 and offers some advice on how far diversification should go. One or two funds are also suggested.

Global smaller companies
Have you ever considered, global smaller companies? Well, some seem to think this is the next big thing. Only problem is, there ain't that many funds out there... Follow this link for more: http://www.trustnet.com/News/Research.aspx?id=304512.

Worth a read

2012-01-25T20:06:00.000Z

Barclays Stockbrokers wheel out Mr. J. Cotter for an overview of 2011 and 2012,

https://www.barclaysstockbrokers.co.uk/Market-Insight/Analysis/Cotters-Corner/Pages/Out-with-the-old-and-in-with-the-new.aspx

Some interesting investment suggestions for 2012 include:

Vodafone (VOD)
Tullow Oil (TLW)
Medusa Mining (MML)
BlackRock World Mining (BRWM)
DB X-Tracker tracking Russell 2000 in US (XRU2)
Fidelity China Special Situation (FCSS)
iShares S&P 500 (IUSA)
iShares Brazil (IBZL)

Same familar names...

2012-01-11T20:00:00.000Z

The same names just keep popping up. Here we are mentioning a story run by MorningStar (http://www.morningstar.co.uk/uk/news/article.aspx?articleid=103484&categoryid=5&refsource=newsletter) on top-rated Investment Trusts. Many of these names were reviewed recently at the beginning of the year by a number of national newspapers and include the following:

BlackRock Smaller Companies Trust
BlackRock World Mining
City of London Investment Trust
Murry International
Perpetual Income and Growth
Scottish Mortgage Investment Trust

What's attractive about some of these is the low Total Expense Ratio - fees deducted from dividend payments. BlackRock Smaller Companies is 1%; City of London is just 0.5%; and SMIT is 0.8%. Not bad for long-term investments.

When to invest in India

2012-01-08T10:10:00.000Z

Maria Tadeo (FT Money, 7/8 Jan) examines performance of equities and bonds within the last year. The main focus of the article is how well gilt funds have performed in the last year. But my interest lies with the losers. And what is interesting from the Top 10 worst performers is the presence of India. According to Tadeo, on average China/Greater China sector was down 23 per cent. Indian inflation has been a reason for poor performance and currency devaluation against the dollar and in China, concern over property booms and a possible economic slow-down.

Does, this then mean that this is in fact a good time to invest in China/India? Certainly, very long-time frames show that growth in these regions is set to continue. Two funds suggested are First State Asia Pacific and Schroder Asian Income Funds which should continue in 2012 to ride on the back of economic and corporate performance. Again, infrastructure is another suggestion for investment suggestions especially as governments seek to spend their way out of trouble. And this is the second time I have recently seen Liontrust European Absolute Return fund promoted. Probably a fund for a more specialised investor but nonetheless worth investigation.

If you're an investor with Barclays you may seen an article in their last SmartInvestor magazine setting out the graphical facts on when will Asians overtake Americans as the world's big spenders. The article suggests that Asia's middle class are set to become tomorrow's consumers by 2020-2030 overtaking the US around 2025.

Performance of share predictions of 2011

2012-01-02T15:06:00.000Z

Finfish has been going for more than one year, it's now interesting to start comparing stock picks made in national newspapers from one year to the next. Here we start off with The Daily Telegraph's ten choices from the beginning of 2011 (02.01.11).

On average, if you had invested in all the shares suggested you would be -11.66 per cent down which doesn't sound too bad overall in comparison to the All Share Index. In hindsight, not many could have foreseen the incapability of politicians across Europe to make such a mess of sorting out what is relatively a straight forward issue to resolve. Then again, the writing has been on the wall since for some time now so may be more of a defensive portfolio was required.

The Times portfolio of stock picks was made on 02.01.11. Overall, the a loss was made of -16.58 per cent.

Please note. I've researched the most recent prices therefore they are subject to the data source available and my level of accuracy. I have attempted to insure a high level of accuracy when collating data but this could be subject to error.

Share Predictions for 2012

2011-12-31T18:40:00.000Z

The Daily Telegraph kicks off this year's share predictions in colourful style on the web with a photo selection to accompany their predictions.

Prudential (current price, 638.5p) (http://www.telegraph.co.uk/finance/markets/8984420/Telegraph-share-tips-for-2012.html?image=1)
Aggreko (current price, £20.17) (http://www.telegraph.co.uk/finance/markets/8984420/Telegraph-share-tips-for-2012.html?image=2)
London Stock Exchange (795p) (http://www.telegraph.co.uk/finance/markets/8984420/Telegraph-share-tips-for-2012.html?image=3)
Lloyds Banking Group (25.9p) (http://www.telegraph.co.uk/finance/markets/8984420/Telegraph-share-tips-for-2012.html?image=4)
Glencore (394.39p) (http://www.telegraph.co.uk/finance/markets/8984420/Telegraph-share-tips-for-2012.html?image=5)
GKN (183p) (http://www.telegraph.co.uk/finance/markets/8984420/Telegraph-share-tips-for-2012.html?image=6)
ARM Holdings (592p) (http://www.telegraph.co.uk/finance/markets/8984420/Telegraph-share-tips-for-2012.html?image=7)
Next (£27.37) (http://www.telegraph.co.uk/finance/markets/8984420/Telegraph-share-tips-for-2012.html?image=8)
Paragon Group (183p) (http://www.telegraph.co.uk/finance/markets/8984420/Telegraph-share-tips-for-2012.html?image=9)
Ophir Energy (288.8p) (http://www.telegraph.co.uk/finance/markets/8984420/Telegraph-share-tips-for-2012.html?image=10)

The Times goes with a Money centre-spread story with suggestions for shares to follow in the next 12 months. Notice, that's 'follow'...

David Budworth leads with the scene-setting, Eurozone etc etc., 6.7 per cent decrease in the FTSE All-Share Index etc etc. And then, in amazement, Budworth has the balls to admit that if you had invested in last years stock picks you would be a 19 per cent down. This notes the dangers of following news paper stock picks (reader be warned). Further analysis is conducted on the reasons why the portfolio underperformed which is fairly noble I think. Good for them...

One point to add which is worth noting is that a move to more defensive stocks will bring little benefits. Share prices in many defensive stocks are already riding high and there maybe little further room for growth. The crux is improvement in the Eurozone situation coupled with an improvement in the US economy. Therefore, the approach The Times has taken is to seek out quality stocks with attractive yields. To keep you waiting no longer here's their list:

Aviva, 300.8p
Babcock International, 735.5p
Brammer, 240.5p
Centrica, 289.3p
GlaxoSmithKline, 1471.5p
Imperial Tobacco, 2435p
Kier Group, 1360p
Rolls-Royce, 746.5p
Stadium Group, 69p
Vodafone, 178.9p

Now, The Times also runs with some Fund suggestions. Again, last years suggestions didn't fair to well either. We will look at these in a future post but here is this year's:

Perpetual Income & Growth Trust, 253p
Finsbury Growth & Income Trust, 321p
MFM Slater Growth Fund,
Murray International, 916.50p
Scottish Mortgage, 590p

Notes to reader: You should seek the source of this information to understand the logistical reasons for the stock suggestions and not rely on my advice alone. Remember stocks and shares go up and down and 2012 is certainly anticipated to be one hell of a ride.

The Daily Mail (http://www.thisismoney.co.uk/money/news/article-2080475/The-Mails-City-reporters-reveal-market-tips-coming-year.html) reviews it's share choices of 2011 as well as suggest new shares for 2012. A mixture of the safe together with some adventurous shares.

Carclo, 290p
Diageo, 1406.5p
Toumaz, 7.62p
Ocado, 54.4p
TomCo Energy, 1.72p
Stobart, 119.9p
Futara Medical, 82p
Vodafone, 178.9p
Sainsbury, 302.9p

So far, Vodafone is the only company which features in two equity selection lists.

Are shares for everyone?

2011-12-31T14:41:00.000Z

Ian Cowie of the Telegraph poses, 'should you buy shares at all?' (http://www.telegraph.co.uk/finance/personalfinance/investing/8983119/Should-you-buy-shares-in-2012-or-give-them-the-thumbs-down.html) Ian suggests that many investors are their wits end, with many thinking of pulling out of the markets after a dismal decade. Of course, cash might be the logical shelter but banks and building societies are offering next to nothing in rates and have done for some time now. But will the likely uncertainty of 2012 mean break and bust? Well, of course, seasoned investors will know that it in times of flight, many will be looking to invest. Many shares are attractive, take for example, companies paying dividends of more than 5 per cent, e.g. AstraZeneca, Aviva, RSA, BAE Systems, HSBC, National Grid and Vodafone. All of these have seen rising prices in the last 6-months and future dips should be seen as potential buying opportunities. Ian Cowie also suggests topping up on The Polar Capital Technology Investment Trust (exposure to US companies such as Apple, Google and Microsoft for example) the share price of which was 301p in August and is now trading at 321p.

So what of Europe, US, China and other emerging markets? It all seems inevitable that something big is going to happen within the Eurozone very soon. There are hopeful signs that the US economy will recover but it will be slow and it may depend on European outcomes. Likewise China and emerging markets may also be slowing down. Many predict China to go pop.

But, if you think all that uncertainty is just too much, always consider the F&C Investment Trust rule that £1,000 invested in 1987 (after the crash) would, with dividend income reinvested be worth £8,440 today.

Fund and Trust suggestions for 2012

2011-12-27T18:57:00.001Z

Five Must-have funds for 2012 from TrustNet

TrustNet comes up with some useful Fund suggestions for 2012. http://www.trustnet.com/News/Research.aspx?id=296610.

Tom Becket from Psigma discusses some potential Unit Trust Funds. Interestingly, Tom's approach is kindly based on how much risk you would like to expose yourself too. His choices are:

Optimistic investor – R&M UK Equity Long Term Recovery

Cautious investor – Henderson Credit Alpha

Balanced investor – Legg Mason US Equity Income

Contrarian investor – Schroder Income Maximiser
Inflation-conscious investor – M&G Inflation-Linked Corporate Bond

Five funds for 2012 from the Daily Telegraph

Paul Farrow from the Telegraph also leads his story (http://www.telegraph.co.uk/finance/personalfinance/investing/8983146/Five-funds-for-2012.html) with a similar title to TrustNet but suggests a different five funds to chose. These include:

Troy Trojan

This fund has swelled in recent years as its performance statistics become well known and you can see why when the Fund Manager trades on careful stock-picking rather than 'closet tracking'.

M&G Recovery

It is no surprise this fund features. It is not only consistent in its performance but also in the number of times it features in the papers. Farrow's choice of this fund is based on historic consistency in performance and leadership. But this is a fund for tomorrow which will perform well should we ever get out of this economic quagmire.

Invesco Perpetual High Income

Invesco Perpetual's mammoth High Income Fund has done very well in 2011. Paul quite rightly points out that this fund got a kicking earlier this year but the Fund Manager has proved his critics wrong delivering a thumping 11 per cent.

Miton Special Situations

Another fund similar to M&G Recovery which doesn't follow the herd. Instead, Miton tends to do well when times are hard and lag the market in times of recovery.

LionTrust European Absolute Fund

A fund for the more specialised investor possibly, but we should not ignore Europe. One day, who knows when mind you, better times will be ahead and this fund may well take advantage of that.

This Is Money website reviewed and suggested some Investment Trusts which are featured in this article:

http://www.thisismoney.co.uk/money/investing/article-2065240/The-best-investment-trusts-long-term-investors.html

Financial Predictions for 2012

2011-12-27T18:17:00.002Z

Interesting, as I review some 2012 financial predictions there appears to be much clarity from some of the commentators but more importantly there appears to be a general agreement on the trends. Let's start off with London Loves Business. Just let me warn you, it doesn't bode well for next year...

http://www.londonlovesbusiness.com/comment/ftse-will-crash-in-2012-predicts-leading-market-analyst/1352.article

Similar, comments from other leading city analysts also feature in this Telegraph article, '2012 predictions, what's next for the FTSE' which appear to back-up above the scenarios discussed in the first article. The first comment is also interesting.

http://www.telegraph.co.uk/finance/personalfinance/investing/8956054/2012-predictions-whats-next-for-the-FTSE.html

The Telegraph also focuses on the Euro crisis as the story continues to develop with the Germans eventually relenting and allowing the ECB to begin the money presses.

http://uk.finance.yahoo.com/news/Predictions-2012-eurozone-tele-2243015693.html

This Is Money looks back over 2011 and provides an indepth analysis for share predictions in 2012 and the coming years.

http://www.thisismoney.co.uk/money/investing/article-1619305/Stock-market-predictions-What-shares.html

Interactive Investor provides a slightly different line for its 2012 predictions.

http://www.iii.co.uk/articles/22388/experts-predictions-2012

Finfish wishes you all a Happy Christmas

2011-12-19T17:41:00.003Z

It's been a turbulent year but hey-ho that's way it sometimes goes. Let's hope readers, 2012 improves and we see some better performances in the second half.

Thanks for following my blog this year, I've enjoyed writing entries and researching the next stories. For 2012, I have some catching up to do on last years share tips - so watch this space!

Happy Christmas and wishing you all the best for 2012!

Finfish.

December round-up

2011-12-13T21:04:00.004Z

I start off with noting this interesting indepth article from Morningstar regarding a low-growth-low-income environment. The article examines various investment fronts. http://www.morningstar.co.uk/uk/news/article.aspx?articleid=102725&categoryid=5&refsource=newsletter.

In the FT Money (w/e 3-4 Dec) Geordie Clarke discusses the US, specifically, US Smaller Companies Funds and ITs. Previous growth suggests now might be a good time to invest but notes the continuing eurozone troubles as an issue to watch if you are considering to invest.

Some top funds include (and returns over 1 yr, 2 yr, 3 yr based on £1000 original investment),
F&C US Smaller Companies | 1 yr return: £1103 / 3 yr return: £2116
Scot. Widows American Smaller Companies | 1 yr return: £1055 / 3 yr return: £1611
JPM US Smaller Companies | 1 yr return: £1053 / 3 yr return: £2044
Schroder US Smaller Companies | 1 yr return: £997 / 3 yr return: £1721
Threadneedle American Smaller Companies | 1 yr return: £982 / 3 yr return: £1946

This data was sourced from MorningStar so if you want to check 5 yr or 10 yr returns please go to them.

Growth in the US is expected at 2 per cent for 2012 which should serve smaller companies well. Smaller company investments, how do tend to be more riskier with greater downside when times are down. But notes, Clarke, US smaller companies out do their UK counterparts. The key is long-term holding from 3 to 5 years, but for the foreseeable future it's going to be a bumpy ride. If the economic climate continues then the growth outlook may be low.

Some funds go for companies 'with stronger balance sheets, good corporate governance and unique products.' Other funds exploit companies on historically low values but are anticipating a good investing period ahead. However, choice in US Smaller Company funds is limited in the UK.

Time to move to Frankfurt?

2011-12-09T21:17:00.001Z

What a depressing day for pro-Europeans. Cameron's approach this week has appeared immature. Immature because he shows a lack of command over his party regarding the Eurosceptics wails. He shows political immaturity in an inability to build alliances with other European states. We could go on but this is a financial blog so its important to focus on this side of things. But Cameron's immaturity goes further as Vince Cable, Business and Enterprise Secretary believed that regulatory issues between Europe and London could be fixed. Cameron didn't clearly have time for that.

Coalition cracks appear as Clegg warns Eurosceptics against rejoicing over veto

Saturday 10th December. Press across Europe appears to show that Cameron has catastrophically miscalcuated.

Press reaction over Cameron veto?

Radio/TV Eurosceptics roll out how we [Britain] 'will never go into the Euro'. Can you remind me please, when was that decision made?

Top Managers' Equity Picks for 2012: European equities could be the ones to watch next year, though diversification is paramount given the difficulty in predicting risk in the current environment

2011-12-06T20:40:00.000Z

Some interesting notes in this article published on MorningStar. The European market is one to watch now according to the analysts, either way now it could go 15% up or 20% down! Interesting comments on the UK market, lags on the way up, overdone on the slides, well isn't that your typical characteristic Brit?

Top Managers' Equity Picks for 2012: European equities could be the ones to watch next year, though diversification is paramount given the difficulty in predicting risk in the current environment

Mr. King tells it straight

2011-12-02T07:09:00.001Z

For once, an intelligent overview of this weeks impending debt storm from the Daily Mail: http://www.mailonsunday.co.uk/debate/article-2068937/Mervyn-King-financial-crisis-In-30-years-Ive-heard-talk-bank-chief.html.

Recent suggestions round-up

2011-12-01T21:05:00.001Z

A recap of Autumn's investment suggestions from UK newspapers listed in Finfish:

November, 14th.
Murray International Trust
Baring Korea Trust

October, 17th.

First State Asia Pacific Fund

Findlay Park Latin American Fund

Somerset Capital Emerging Market Dividend Fund

Investec Emerging Markets Local Currency Debt Fund

Aberdeen Asian Local Currency Short Duration Bond Fund

Stratton Street Capital's Wealthy Nations Bond Fund

October, 16th.

iShares Markit iBoxx Sterling Corporate Bond 1-5 years
HSBC MSCI Emerging Markets ETF
HSBC MSCI Russia Capped ETF
Nomura Voltage Mid-Term Source ETF
iShares Physical Gold
iShares Physical Silver
iShares FTSE UK Dividend Plus
iShares Sterling Corporate Bond
iShares S&P Commodity Producers Oil & Gas ETF

October, 17th.

iShares UK Dividend Plus ETF

September, 8th.

John Laing Infrastructure Fund
International Public Partnership
HICL

Can Germans save the day?

2011-12-01T20:45:00.001Z

Interesting and for once a perceptive view from the Telegraph on today's events and pondering what really is going on in Germany. Link here: Germany remains oblivious

Wipeout

2011-11-27T15:41:00.001Z

This week sees a change. Investors are losing confidence big time, 'Loss of confidence and conviction set to linger' shouts John Authers column. 'Asset prices are set by human emotion' and right now it seems we're already running through a bout of winter blues and its only the end of November. This is worst since March 2009 when pessimism was last highest yet stocks ironically began to rise. Same on this occasion? I don't think so. Mr Authers states people have lost their animal spirits when it comes to investing and it could take years to recover. 'Two savage bear markets in a decade appear to have stripped retail investors of their faith.' Hmm, I know the FT likes to play the doom card but even the Editorial states with its headline, 'Preserving capital becomes the main game in the City.' The FTSE 100 has just put in a horrendous run of days since January 2003. £107bn wiped. But what's different this time? Well as Neil Hume rightly points out no one is shouting about whether the sell off has gone too far, whether equities are cheap and there is value out there and its time to buy. Seems we may have further to drop. 'Where there was hope in 2009, there's now almost despair'. Follow that, eh.

Bolton apologises for performance after 'brutal' six months

2011-11-27T12:36:00.000Z

Poor Anthony Bolton. At least he's got the guts to admit it and try and move on.

Bolton apologises for performance after 'brutal' six months

Is it a good time to buy (..long term applicants need only reply)

2011-11-23T20:06:00.001Z

The FTSE 100 continued its decline today shedding another 67.04 points. There is no solution in sight for the Euro. US debt fears and eruptions in the middle east clearly haven't helped investment sentiment. It looks fairly clear that prices will continue to slowly slide for the next week, possibly two weeks. But, I don't see anyone asking the questions is now a good time to buy for a long-term investor (10 years+).

Some funds suggested by FT Money are currently trading at 20 to 25 per cent discount, examples include Scottish Mortgage Investment Trust (SMT @ 581.50p) and Jupiter European Opportunities. (JEO @ 219p).

Talking about the long-term, Trustnet cover this interesting story (http://www.trustnet.com/News/Research.aspx?id=288519) looking at inflationary pressures for the next 15 years.

For those looking for income and growth, Trustnet also run this article Five funds for income and growth. It looks like Newton Asian Income has done well, another of FT Money's choices earlier this year.

Funds That Have Been Bludgeoned: Beware of these portfolio-eating zombie funds, all five of which are top of the casualty list so far this year

2011-11-22T20:30:00.000Z

Duff funds to avoid from Morningstar:

Nightmare Returns: Funds That Have Been Bludgeoned: Beware of these portfolio-eating zombie funds, all five of which are top of the casualty list so far this year

Writing on the wall...

2011-11-20T11:18:00.001Z

FT this weekend goes into doomster mood, predicting that there is nothing more that can be done for the Euro. It's game over. It's not predicting immediate break-up but certainly indicates a short-term outcome.

It's ironic that the German press as well as the Eurosceptic right-wing British press are going at each other. The Germans note about the UK, 'an ailing empire', 'poor economical statistics, high youth unemployment, high inflation' writes Quentin Peel ('Cameron and Merkel show Unity'). Quite right they may be but the Germans still don't realize what mess they're in too.

Leon Brittan, gives a much more of a considered view to fiscal integration and notes that if the UK had joined the Eurozone it may well have turned out completely different and all because of the UK's influence. Same can be said of Eurozone fiscal union. It's all very well for the Brits to stand on their high ground stating 'we're better off out of this mess' but a UK on the outskirts of an integrated Europe will know doubt be too attractive to other states too, therefore increasing the economic powerhouse of an integrated Eurozone. With half of the UK's trade and investment with the rest of Europe, does the UK really want to be on the outside - unable to influence, unable to change anything? Trade would undoubtedly be eroded over time. In the UK's current mess it appears nothing but suicide to do this. Eurosceptics claim, 'we need to increase trade with the BRICs'. Historically, we only have close ties with India. Doing business in Russia is almost impossible (even like the type of FTSE 100 company I work for and of course the experiences of BP); some successes in Brazil and China appears to be just a one-way trade albiet for the small successes and current fad for Land Rover and Jaguar.

The Eurosceptical position to me just appears bonkers and all because they get annoyed over straight banana edicts and alike. You got to be in it to win it I say. It may all be up in the air right now but when the dust settles, the debts are cleared, the Germans strengthen economic integrity its clear who will be the winners in all this.

But against all this, Richard Milne and David Oakley in their column, 'Investors move to price in euro split' appear to indicate it could well be game over with investors now troubling the core. And this is the thing as Quentin Peel again writes about Angela Merkal's anxious nature, not trusting the markets and a slow-moving democrat that she is - politicians are still behind the curve on this one. The bond markets, have over the past week been ratcheting up the angst with spreads increasing in France, Austria, Netherlands and Finland. Even Germany is beginning to see some increases. A potential default for every Eurozone country apart from Germany is now being factored in. Certainly, many analysts appear to be indicating that the system is broke and can't be fixed. Indications are that Credit Crunch 2 is just round the corner the outfall of which will impact on core and none core Eurozone countries as well as the prolifery states, the UK amongst them.

Stories in connection: http://uk.finance.yahoo.com/news/Britain-join-euro-long-says-tele-583416573.html?x=0

Is the Pound finished?

2011-11-18T22:07:00.001Z

Absurdly the BBC has been getting overtly-excited about unusual German political comments of the UK's position in Europe. It seems the Eurosceptics rantings are coming to haunt them. The Germans, quite rightly are putting the Brits on the spot. Are you in or out of Europe? If you're in, then constructively look for answers and work with partners to find solutions. If you want out, then by all means leave. But of course, as no doubt Germany knows, the UK is very dependent upon trade with the rest of Euroland. If the UK were to leave the trade-free zone then trade with the block may/would likely decrease. Just like a hole in the head, this is the last thing the UK needs considering its current dire position with high debts and low growth. And this is the other thing the Germans know, UK foreign debt (mostly banks) to GDP is running at 436% or € 7.30 trillion. The risk factor may be low but how much quantitive easing is it going to take to erode that sort of level of debt? And this certainly appears to be the preferred approach of the Bank of England to let inflation ride high, while keeping the note printing presses well oiled. Therefore, the UKs position will surely continue in the EU but the 'Tobin Tax' on financial transactions is likely to upset the relationship.

References: BBC, Eurozone Debt Web: who owes what to whom? http://www.bbc.co.uk/news/business-15748696

Guardian, 'Tobin tax' would hit City of London with missile, says John Major

http://www.guardian.co.uk/business/2011/nov/18/tobin-tax-city-london-john-major

What's hot?

2011-11-14T19:41:00.001Z

I can some up one column in the FT Money this weekend (12/13 Nov.11) as this. Property: sell; Gold: hold; Big quality companies: accumulate. So says Merryn Somerset Webb in article, 'Hang on to gold and keep faith in cash'. The cash element of course is safest and could be utilised to pick up some cheap stocks should the eurozone go thermo-nuclear. Choice fund: Murray International Trust.

South Korea seems to be one of Dina Iordanova's geographic choices. She suggests Baring Korea Trust for exposure but notes that such specialist funds often come at a cost regarding charges.

Europe - the only solutions

2011-11-12T22:05:00.001Z

http://uk.finance.yahoo.com/news/Tom-Stevenson-bond-market-tele-1171797632.html?x=0

Comparson of portfolio performances for choppy times

2011-11-06T20:23:00.001Z

A week away on business is always good as I tend to not hear any news during the week. Not that I would have missed much assessing the ecology for gold mine in Transylvannia despite the excellent blackberry service in the middle of no where. So it came as no surprise on the way back yesterday reading the FT Weekend, Europe Edition that it had been another turmoil week on the markets.

I didn't get a chance to write this from last weeks FT Money section. John Lee, Kevin Goldstein-Jackson, Dina Iordanova and Nick Louth all compared recent performance on the portfolios. A very useful article to enable me to compare my portfolio's recent performance.

John Lee's portfolio is up 1.5 per cent.
Kevin Goldstein-Jackson's performance is down -7.4 per cent
Dina Iordanova is also down -6 per cent
And finally, Nick Louth is neutral at 0 per cent.

My own portfolio, a balanced-mix of unit trusts and investment trusts is down 0.58 per cent. This mind you included a major portfolio rearrangement between May and August and included one of the best October's market performances in recent times.

EMU break-up scenarios

2011-11-06T10:00:00.000Z

Gulp, breathe slowly and calmly. Amrbose Evans-Pritchard writes in the Daily Telegraph on the EMU break-up risks global deflation. The consequences sound horrific...

More on this story, published today in the Telegraph. Contingency plans in place for Euro Break-up.

With any luck this will silence those Eurosceptic weirdos for good as such a break-up may prove ill-fated for the UK. It's exasperating to hear that while the Govt. is prepared to give £40 billion to the IMF (http://www.bbc.co.uk/news/uk-politics-15611429) they have requested that it is not given to the Eurozone. And yet where does the majority of UK trade come from? Europe. It was happy to give Ireland some £7 or 9 billion because of close trading ties but it won't with its other euro neighbours. How logical is that? It's unbelievable that the LibDems have been sucked along on this Eurosceptic ride too...

More on emerging markets

2011-10-23T20:46:00.000+01:00

Emerging markets have like other markets suffered (Lucy Warwick-Ching, FT Money, Where to invest next in the new world order, 15-16 Oct.11). Emerging market equities are down 23 per cent The MSCI Emerging Markets index is down 17 per cent. Individual markets have also see volatility in the third quarter. Russia RTS down 14 per cent, China Shanghai ES composite index down 16 per cent while Brazil Bovespa index is down at 24 per cent. Compare this to 5 per cent decrease for the FTSE 100 in London. So, should emerging markets be avoided and have all seen equally large falls as Russia, China and Brazil? But, others have managed to remain stable, Malayisa and Indonesia for example due to local factors.

So, should emerging markets be considered more carefully and what are the current factors making investment worthwhile? The first is that MSCI Emerging Markets Index is 20 per cent below ts average. Dividend yields are also set to increase by 10 per cent in 2011 and 2012. However, sectors do tend to be concentrated in commodities, energy and financials. Volatility is also greater in emerging markets which all investors should consider. A good example of this has been the Fidelity China Special Situations Fund which has seen investors loose up to 30 per cent. Emerging markets should also be balanced with purchases in developed markets and multi-international companies which also currently represent good value.

inflating our way out of trouble

2011-10-18T20:17:00.000+01:00

Ha ha, a US view over the pond on its small cousin Britain! Quite good entertainment too, what a mess we're in....http://www.reuters.com/article/2011/10/18/idUS250302580320111018

The emerging markets: are about to crumble view

2011-10-17T21:17:00.002+01:00

Merryn Somerset Webb delivers it straight down the line (FT Money, 15-16/10/11), "China's banking system is in trouble". Sound familiar? The growth that China has enjoyed is dissipating and as that occurs people begin to wonder just how valuable bank assets really are. A Chinese bear will possibly affect the region and increase volatility and therefore prices could become cheaper.

What are emerging markets up to?

2011-10-17T21:09:00.001+01:00

As investors de-risk their portfolios, significant sums of money have been moving out of emerging markets. Are the outflows warranted? According to Tanya Powley's article in the FT Money (15-16/10) emerging markets rose by 57 per cent in 2009, followed by another 23 per cent in 2010. But now we see returns fall to 20 per cent. Interestingly, the article notes Warren Buffets philosophy of buy when others avoid in that investors do not look at fundamentals but are rather driven by risk appetite. Currently risk appetite is poor, therefore it computes that prices reduce. So, is this then a time to buy? Possibly so. For example, emerging market debt currently benefits from 5 per cent yields and appreciating currencies. However, one should not overlook growth in which case equity funds are better and currently prices are cheap.

Some popular suggestions alongside some more unusual funds:

First State Asia Pacific Fund

Findlay Park Latin American Fund

Somerset Capital Emerging Market Dividend Fund

The argument is that investors have poured money into emerging market bond funds, perhaps over-confident that these countries can navigate through the current economic storm. The exposure to bonds is really access to appreciating currencies but is best balanced with additional exposure to emerging market funds to gain access to growth in companies.

More suggestions:

Investec Emerging Markets Local Currency Debt Fund

Aberdeen Asian Local Currency Short Duration Bond Fund

Stratton Street Capital's Wealthy Nations Bond Fund

It is also worth noting that as inflation heads towards peaking around the world, this could benefit debt markets as central banks lower interest rates.

ETF appetite?

2011-10-16T20:35:00.000+01:00

Well, the euro-dust has settled and it seems that this weekends FT Money are keen on reporting a few investment options. We start off with recent in-flows into ETF investments. Elaine Moore reports on investors choices in some ETFs. These incude: iShares Markit iBoxx Sterling Corporate Bond 1-5 years. This fund tracks investment grade corporate bonds and £114.5 has been invested since March 2011. Other funds attracting attention include HSBC MSCI Emerging Markets ETF, this fund tracks companies in Brazil, China, India; HSBC MSCI Russia Capped ETF; Nomura Voltage Mid-Term Source ETF.

Commodities have also featured in the Top 10 of ETFs including iShares Physical Gold and iShares Physical Silver.

Income related funds have also gained attraction. These have included, iShares FTSE UK Dividend Plus and iShares Sterling Corporate Bond. Both funds track high-yielding stocks or bonds. Other more exotic commodity ETFs are now available for example, the iShares S&P Commodity Producers Oil & Gas ETF.

Bear talk

2011-09-25T14:03:00.000+01:00

It is gloomy for sure, after another mauling by a bear which is looking troublesome. The FT Weekend in fact goes as far as laying it all on the table, 'Investors wrestle with the bear facts' Richard Milne. (FT Weekend, 24/25 Sept). Equities in the US/UK are down 20 per cent since earlier this year. David Cameron's words that we're staring down the barrel of a gun seemed apocalyptic but this is backed that shares may well fall further should a double-dip become increasingly likely. And yes, we appear to be on the slide falling slowly to double-dip. Another 15 per cent seems plausible given the European equities are currently trading on about 8 per cent.

One of the reasons has been dire political leadership to resolve debt issues in the developed west by doing the least minimum.

I like Merryn Somerset Webb's article this week. Merryn too is trying to keep her spirits up despite the gloom which makes reading her column a lot more fun! Seems like she's been round the city gathering views on where are the elusive safe havens. Her conclusions reached are this, gold (as insurance) and Japan (as value) but worth bearing in mind that Japan's debts are also colossal which ultimately comes back to Europe as a possible value destination. Ironic, yes but they're you go.

Wise advice in times of trouble

2011-09-25T13:15:00.003+01:00

This Is Money published this a few weeks ago, which on the face of it was wise advice at the time!

http://www.thisismoney.co.uk/money/investing/article-2026712/10-investing-questions-investors-beat-stormy-markets-profit-rebound.html

Follow the best dividend payers

2011-09-24T17:25:00.000+01:00

I liked this story in the FT Money this weekend (Ross, A. 'Investors seek higher dividend payouts', 17/18 Sept) which discusses the iShares UK Dividend Plus ETF (Exchange Traded Fund). With more concern on the recent rate of inflation and the lack of returns on interest banks to savers, this financial model might be worth adding to a portfolio. The iShares fund tracks companies in the FTSE All-Share index that are likely to pay-out the highest dividend in the index but the fund also rates the Top 50 by size and liquidity. But like all investments there are pro's and cons. Trackers won't always get its estimates right - good examples are banks, BP etc which cut there dividend payments. High yielding stocks may also indicate things aren't what they should be.

http://www.ft.com/cms/s/2/828d93e8-dfc5-11e0-b1db-00144feabdc0.html?ftcamp=rss#axzz1Yt6ZEsgk

The worst is yet to come....but then again...

2011-09-11T17:02:00.000+01:00

Not reassuring words, 'I imagine they [equities] will go even lower before this crisis is over...' But this was a call to purchase by some that certain equities can be picked up at a good price and that the 10-year average price/earnings ratios in Germany and France are 'at very low levels' similar to that in the 1970s and the melt-down in 2008. So, states Merryn Somerset Webb in her weekend column. So I guess if you looking at the next 10-15 years, now well be the time to invest.

Seeking potential between the lines

2011-09-08T20:10:00.000+01:00

I didn't write anything last weekend as on the surface no one had anything interesting to say but now come mid-week and yet another doomster report delivers another blow to the UK and international community warning on recession, it just started me thinking it cannot be that bad. Who is making money and where. Sure enough amongst the black and white, it is there. Matthew Vincent reports in FT Money (03-04 September) that while most of our portfolios sank in August, infrastructure funds have done well. And don't forget these often have attractive yields. His suggestions include: John Laing Infrastructure Fund, HICL, International Public Partnership.

Post-August analysis

2011-09-03T20:58:00.003+01:00

It's like waking up after a heavy night out. What did exactly happen in August? An overview of my portfolio, and yours might likewise show similar is that funds invested in the East have, yes been dragged down, but have done better than their European counterparts. This article from the Daily Telegraph identifies this trend and examines it further:

http://uk.finance.yahoo.com/news/August-market-bloodbath-tele-3485929829.html?x=0

Portfolio Volatility busters

2011-08-27T17:14:00.000+01:00

The FT Money section (27.08.11) this weekend suggests another round of portfolio protection. Two models are suggested, the first Rathbones Total Return Model:

Cash
Index-linked bonds
High-quality credit (AA- rated or better)
Corporate bonds 8%
Equities (UK) 10%
Equities (Overseas developed markets) 10%
Equities (Asia/Emerging Markets) 3%
Commodities (Precious Metals) 4%
Hedge Funds (Macro/Trading and Less Directional Long/short equity) 22%
Hedge funds (Relative value/credit) 8%
Property 5%
Property shares 1%

Rathbones also suggest a sample asset allocation in order to capture long-term growth:

Cash 3.5%
Equities (UK) 20%
Equities (Overseas developed markets) 24%
Equities (Asia/emerging markets) 35%
Hedge Funds (Macro/Trading and Less Directional Long/short equity) 22%
Privte equity investment trusts 7.5%

Anguish August, sanguine September?

2011-08-27T16:56:00.000+01:00

August has not been a great a month, has it? Anxiety, high, risk appetite, low. But as we move into September may we see a slight recovery and how best to take advantage of it?

Faith Glasgow writes a very interesting article making comparisons with drip feeding vs lump sum investment. Investors who invested a lump sum at the end of the tax year in April would be worse off by now follow falls over the summer 17 per cent since July. If they had drip-fed that sum, losses would likely be less.

Glasgow discusses various views on both drip-feeding and lump-sum investment. For instance, drip-feeding between September 2007 and February 2009 out-performed lump-sum investment. But, over the long-term, lump-sum performs better and that's because markets rise and perform better over the long term. Glasgow gives the example that 10-years to June 2011 showed that £50 per month invested or £6000 over the term came to £10,057, however a £6000 invested 10-years ago as a lump-sum would show a profit now of £11,855.

The advantages with drip-feeding when markets a volatile are that prices are averaged out thus removing the risk of ill-timed lump-sum investing and the losses that may occur. Also, pound-cost averaging means that when prices fall more units/shares are purchases, fewer units/shares are purchased when prices rise therefore the investor will hold more units/shares.

Another factor is affordability. Not everyone hoards £10,500 until the end of the tax-year. For, those who save less, regular drip-feeding of say £50 to £250 is much more possible.

Are there any lump-sum advantages? Long-term investors will of course see now as an opportunity to buy prices low.

Another factor is dividend payments in either high yielding income shares or units. A lump-sum will be earning on dividend payments immediately especially through growth and income funds or high income funds. Whereas, drip-feeding only earns dividends on the amount invested to date.

Perhaps it doesn't seem all doom and gloom...

2011-08-13T13:47:00.000+01:00

Last week things were so depressing I could barely bring myself to write anything. One more apocalyptic week has passed and we've seen billions wiped off shares worldwide. But the general feeling in the FT this weekend is buy. Don't buy just anything but buy high quality, high yielding stocks.

FT Money (14.08.11) reports that private investors have been engaging heavily in the market with significant buys over sales. However, this does come with a general note of caution that there maybe more turmoil to come according to some financial advisors.

Matthew Vincent suggests his page 2 article that drip feeding into growth and income funds could be a way of protecting against volatility. These investments would be for the long-term with an aim of investing over 10 years. Examples include:

Artemis Income (1 YR Perf. -2.5% / 3 YR Perf. 5.3%. Vol. 9.09)
Investec UK Special Situations (1 YR Perf. +1.1% / 3 YR Perf. 21.9%. Vol: 10.3)
JO Hambro UK Opportunities (1 YR Perf. 0.5% / 3 YR Perf. 6.8%. Vol. 9.51)
M&G Global Dividend (1 YR Perf. 3.1% / 3 YR Perf. 22.2%. Vol: 11.23)
Schroder Income (1 YR Perf. -11.8% / 3 YR Perf. 8.4%. Vol. 12.05)
Standard Life Investments UK Equity Unconstrained. (1 YR Perf. 1.7% / 3 YR Perf. 39.2%. Vol. 20.3)

So, is now a good time to invest or not? Well, apparently the FT Money has some advice on this too which states that FTSE shares now trade on a prospective price/earnings (p/e) ratio of less than 9 and gave a dividend yield of 4.2 per cent - making them 25 per cent cheaper now than six months ago, and historically undervalued against 10-year gilts, which yield 2.7 per cent. The ratio of bond to equity yields, and the ratio of share prices to net assets - known as 'price to book' - make equities as attractive as at any time in the past 20 year, bar the financial crisis.

Wise advice

2011-08-06T17:24:00.001+01:00

Some wise portfolio advice in these times of financial turmoil from our friends at MorningStar:

http://www.morningstar.co.uk/uk/news/articles/100008/Stay-Calm-and-Keep-Looking-for-Yield.aspx

The FT Money reiterates some of the advice given above. For example, you might be tempted by the yellow stuff, but don't forget if you do run the risk of losing out on dividends.

Vince Cable on BBC TV had some wise words to say to this morning, something we often overlook. The presenter was suggesting pension holders should be nervous. Mr. Cables reply is that it is only natural that markets go up and down reflecting confidence and investors should not be worried in the long-term. Indeed, this is true if you are gradually trickling money into equities buying on lows and highs averages out your purchasing costs.

No sign of imminent financial doom in Royal Tunbridge Wells

2011-07-30T17:46:00.001+01:00

It's reassuring to see, that in these heady days of debt-laden doom and gloom, the lovely folks of Royal Tunbridge Wells (true-blue English Stockbroker country for the uninitiated...) were out and about on a nice mid-summers day at the weekend. Yes, the rest of us might just not know what and where to hide next as we seek shelter from the current financial maelstrom but be reassured that these folk aren't hiding. RTW's quaint streets, oozing with the latest boutiques - designer clothes and Jewelry, estate agents displaying £1.5m plus homes - the place to splash that latest bonus.

One must of course wear the correct attire: designer sunglasses, polo shirt (collar-up), hands in pockets for the lads; shorts showing lots of leg, plastic-designer sunglasses, stripey blouse for the girls. In colours this summer: everything in white! You'll melt in and know one will notice - just remember to correct that worrisome face!

Think ahead! Investments for the next 20-40 years

2011-07-24T21:08:00.001+01:00

Investment opportunities for the next 20-40 year window

http://www.trustnet.com/News/Research.aspx?id=234320

Investment suggestions in a tough old world

2011-07-24T10:36:00.001+01:00

This weeks chatter notes a some interesting talk of more quantitative easing. Both Vince Cable, UK Gov. Business Secretary noted today on the BBC's Andrew Marr show (http://www.guardian.co.uk/politics/2011/jul/24/vince-cable-us-debt-rightwing-nutters) that UK QE3 was possible if sluggish growth continues. This echos similar open statements made in the States. Certainly, it's something that gets Somerset Webb excited (FT Money 16/17 July) as she rushes to purchase more metal.

FT Money suggests going for:

1) Gold, Precious metals, Silver (FT Money 16/17 July)
2) Emerging Markets (specifically Asian) Debt Bonds (suggestion, Aberdeen Emerging Market Debt Fund)
3) Jupiter European Opportunities IT

Sit down, gulp and bury head in nearest bucket of sand...

2011-07-13T22:01:00.000+01:00

http://uk.finance.yahoo.com/news/America-political-system-tele-3099752520.html?x=0

High Yielders

2011-07-09T19:03:00.002+01:00

http://uk.finance.yahoo.com/news/Questor-Seven-high-yielding-tele-120633307.html?x=0

Japanisation to come

2011-07-03T20:23:00.000+01:00

http://uk.finance.yahoo.com/news/Is-UK-following-Japan-lost-tele-2067294264.html?x=0&.v=1

Settle down for the next 3-months...

2011-07-03T15:13:00.000+01:00

Phew, Greece is sorted for a another few months. The world's financials markets can now have a collective rest. Poor old Europe, it's been a bit choppy of late but this should not be seen as a period to avoid investing. Life goes on! People go to work, kids go to school, we eat our breakfast every morning don't we? So, no reason for the long-term investor to cease-up, stay in cash or gold until this calamity is over. Well, ok that's one view sure but fool are the sailors who fail to check the weather forcast, especially if there is no wind and you don't go anywhere. That's certainly the case with markets running flat and sideways. Merryn Somerset Webb discusses this weekend (FT Money 2/3 July) reminds us that sometimes we make decisions thinking along popular lines. We invest in the Asia when in fact the returns turn out to be better in Europe. Exactly that has happened if you had invested in a investment trust at the beginning of the year. Two funds Merryn suggest, are Jupiter European (10 per cent discount to NAV), Fidelity European (12 per cent discount to NAV) and JP Morgan European Smaller (15 per cent discount to NAV).

Balance small with large

2011-06-26T10:43:00.000+01:00

Small UK Companies have been doing well recently (FT Money, 25/26 June). Funds such as BlackRock UK Smaller Companies (up 43% this year), Cazenove UK Smaller Co. (+54%), Standard Life UK Smaller Co. (+48%). But will these returns continue? Certainly trading conditions for smaller companies have been good but should the climate change then smaller companies tend to do worse compared with larger companies. As investors seek more security smaller company funds tend to be oversold. In order to ensure portfolio balance it is best to hedge by investing in larger company stocks too.

Undercover

2011-06-26T10:06:00.000+01:00

I wrote a few posts ago about the importance of keeping a cash position as noted by the FT. The boys and girls gave that suggestion away but they are very accurate at predicting up and coming trends, namely the Greek debt Euro crisis and its impact on investments. It's been a couple of weeks of, well nothing but keeping you're head down and undercover.

Some writers have noted how similar all this is to last May/June of 2010 - everything is being played out again with what appears to be no new changes or developments. However, retail investment sales in the UK did increase in May so some buying is going on and not forgetting that one should also purchase when others flee I suspect some long-term buyers are stalking recent global investment suggestions.

Schroders comes out tops

2011-06-25T21:31:00.000+01:00

I like Schroders and have one or two of their funds. Check this story out if you like them too:
http://www.trustnet.com/News/Research.aspx?id=223165

Who's hitting who?

2011-06-22T09:35:00.000+01:00

Trustnet have benn data-mining and have been investigating who has been looking at factsheets on the Association of Investment Companies (AIC) website in May 2011 (http://www.trustnet.com/News/Research.aspx?id=223337).

The research shows the Top 10 most popular viewed websites, showing a number of funds that the FT has been promoting over the last couple of months, namely, Alliance Trust & Scottish Mortgage.

Open-ended funds vs investment trusts

2011-05-31T22:00:00.002+01:00

http://www.trustnet.com/News/Research.aspx?id=217705

All the talk about town...

2011-05-29T12:12:00.000+01:00

Scottish Mortgage Trust (SMT) and Alliance Trust have been gaining a lot of column speak and interest in the financial news recently as two funds to watch. This weekend, The Times went all out with a special focus feature on SMT. Alliance Trust over the last few weeks has caught the attention of FT Money.

SMT is a bastion of the investment trust world with a history dating back to 1909 and rubber plantations in Malaysia. According to The Times, "it is now the third-largest global investment trust with a market capitalisation of £1.9 billion." Investment is spread over US (33%), Asia (20%), Europe (20%), Emerging Markets and Cash (10%). The difference with SMT compared with other investment trusts is its more focused portfolio of 80 to 90 stocks including some well known names.

Positives: management-continuity; long-term strategy based on trends rather than indices, identification of growth areas within geographical locations, e.g. Northern Europe, China's hi-tech economic development; India gets snubbed due to corruption; pharmaceutical stocks are likely to be taken over by niche healthcare companies, alternative energy over carbon-based energy products.

Negatives: don't expect short-term gains, SMT share price is prone to volatility; risk factor is high for some areas.

What would you do with £100,000?

2011-05-29T10:03:00.000+01:00

Mark Atherton in this weekends The Times (28.05.11) discusses to a number of Financial Advisors what would they do with a lump sum. A hypothetical situation is put to them involving an average family who need to invest a lump sum. What I think is interesting about this article is the choices the FA's make wasn't particularly inspiring. I am only interested in their investment choices here as what they could do is possibly pay-down loans or mortgages too or top-up pensions.

FA1

Aberdeen Emerging Markets Bond Fund (Current yield of 6.11 per cent)
iShares MSCI World ETF (developed market tracker)
F&C Commercial Property Trust
HgCapital Private Equity Trust

FA2

Dimensional Global Short Dated Bond Fund
Vanguard Developed World Ex-UK Equity Index Fund
Vanguard UK Equity Index Fund
Dimensional UK Smaller Companies Fund
Dimensional UK Value Fund

FA3

Invesco Perpetual High Income
JO Hambro UK Equity Income
M&G Optimal Income
Liontrust Special Situations
Marlborough Special Situations
Schroder US Mid-Cap
Cazenove European
Jupiter European
Aberdeen Emerging Markets
First State Asia Pacific Leaders
GLG Japan Core Alpha
Artemis Strategic Assets
Insynergy Odey

FA4

Liontrust Special Situations
Neptune Income
Liontrust European Growth
Allianz RCM Bric Stars
L&G Dynamic Bond
M&G Optimal Income
HSBC Infrastructure
Gartmore UK Absolute Return

All four advisors appear to show quite different approaches. FA3 & FA4 chose funds which are much more spread and do feature some good performers. FA1 and FA2 are more alike though I am not sure why FA2 has selected Dimensional, not exactly a well known investment house. Whereas, FA1 invests half the monies in Investment Trusts but the other half in some solid income earners - my choice I think.

Don't play down your cash reserves

2011-05-22T11:27:00.000+01:00

I think the UK papers are betting on a big-shake out soon. David Stevenson in his Adventurous Investor article, 'Holding Cash will allow me to swoop on bargains'. says it all really and despite such high inflation rates and low interest rates he is holding a percentage in his portfolio as cash. In his article he discusses the advantages in holding cash - optionality, stability. This is a theme that Merryn Somerset Webb continues this theme in the following week, stating that 'your money has to be somewhere and at the moment the risks of holding cash might be lower than the risks of holding too much in other assets.'

A shot in the arm

2011-05-22T10:47:00.001+01:00

Sometimes, we all need to change in surroundings which help us reflect on current issues and it certainly seems to have added more of a pulse to the FT Weekend crew (7/8 May) who've attended the CFA annual conference in Edinburgh. Most Fund Managers believe recovery is gradual, bumpy affair. But John Authers gives a rapid overview since 2009 in his article, 'In times of trouble, go with the money flow'. The latest flow is heading into agricultural assets, back onto Malthus again, but this time round there is a split in commodities. After all, metals are much more closely associated with human economic endeavors, whereas, food sustains our activities and year-on-year more food is required to sustain a global population. Metal prices may fall if economic activities decrease and the rise of inflation provides a feedback loop suppressing activity due to a rise in prices. So, does the recent fall in commodity prices actually mean anything? Alice Ross, thinks not. Commodities are still a long-term buy as continued infrastructure building and a lack of supply reinforces a cut off point. However, the recent shake-out has sorted out the fluff and we now see which commodities are still sustaining their prices, e.g. copper over silver for example.

Agricultural commodities are also likely to climb in the long-term as indicated above due to reduction pressures which may make prices more volatile.

But playing off individual commodities, against each other does increase volatility in any portfolio.

Commodities car-crash

2011-05-07T15:19:00.000+01:00

Interesting, it was on the cards, it had to happen some time, such rises in commodities are unsustainable. And so, this week the commodities heat of recent months went cold. Interesting too that the FT Weekend main paper (30.04/01.05) merrily mentions the onward rise of gold, silver and coffee. Meanwhile, Merryn Somerset Webb successfully foresaw this weeks commodity dumping with a Malthusian twist in her article, "Good weather could bring on a nasty rash" (http://www.ft.com/cms/s/0/6336f99e-71c0-11e0-9adf-00144feabdc0.html#axzz1Lfw8rWAK).

How To Pick a Reliable Dividend Payer: Investment expert Rodney Hobson gives his top tips for income-focused investors, including why equities are a much better bet than bonds

2011-04-19T21:35:00.000+01:00

How To Pick a Reliable Dividend Payer: Investment expert Rodney Hobson gives his top tips for income-focused investors, including why equities are a much better bet than bonds

Dividend Picks for a Slow-Growing Economy: You don't need a fast-growing business in order to generate a high total return

2011-04-19T21:32:00.000+01:00

Dividend Picks for a Slow-Growing Economy: You don't need a fast-growing business in order to generate a high total return

Lazard: Go Global for Equity Income: Utilities and healthcare may be among those traditionally favoured for their dividends, but Lazard's Pat Ryan sees more attractive opportunities elsewhere

2011-04-19T21:30:00.000+01:00

Lazard: Go Global for Equity Income: Utilities and healthcare may be among those traditionally favoured for their dividends, but Lazard's Pat Ryan sees more attractive opportunities elsewhere

Under the surface of equity income funds

2011-04-17T18:28:00.001+01:00

Now this is an interesting original article by Mark Atherton, (The Times, 16.04.11). The premiss is this, that many of the more well known income funds gain their income from mostly a small number of companies. Apparently, 'more than half the income in the UK market comes from only 10 companies, and 69 per cent from 20 companies.' Yet, there is many more companies offering yields of more than 3 per cent, four times as many companies in fact. So, why are the big income funds focused on such few companies? One of the problems is the sheer size of some of these funds, e.g. Artemis, Invesco-Perpetual and Jupiter hence a focus on larger companies. It would be difficult for these funds to hold shares in smaller companies as they would end up holding extensive holdings. But the problem with larger companies, as BP showed last May can now be questioned. The performance of some of these larger funds has also been poor. However, smaller stocks come with their risks and this article suggests instead, that investors should seek international income funds, e.g. Newton Global Higher Income Fund, Ignis Argomaut European Income, Jupiter North American Income, Newton Asian Income. UK income funds which focus on smaller companies include, Unicorn UK Income, JO Hambro UK Equity Income Fund, Ignis UK Equity Income Fund.

I love you, I love you not and the case for Japan

2011-04-09T19:38:00.000+01:00

I cannot make my mind up on whether to invest in Japan or not. Do you or don't you. This has been going on for two-years or more. On the one-hand, the country has some outstanding corporate talent, on the other an aging and shrinking population. Mark Atherton (ISA Insight, 'Outlook for Japan divides the experts' Times, 02.04.11) gives some guidance.

Of course, as the clean-up on the eastern coast continues, things might be about to change but not without caution. The Japanese Govt. will likely look to borrow more money but remembering to that the countries debt-burden is one of the highest, globally.

Some pro's:

Japan is benefiting from the global recovery
The Earthquake and Tsunami may stimulate the economy
Japanese equities are still some 20 per cent below pre-Lehman crisis levels
Japanese companies are sitting on large piles of cash

Some cons:

Japanese Govt. will have to borrow even more
Demographics: population set to shrink from 83 million to 50 million by 2050
Only 3 funds out of 43 made money!
Economy will not grow as fast as some of its neighbours

Fund/Trust suggestions:

Ballie Gifford Shin Nippon (small to mid cap focus - cautious)
Atlantis Japan Growth (Aggressive)
JO Hambro CM Japan Retail (Cautious)
GLG Japan CoreAlpha (Aggressive)

To be honest, I think I might settle to a wider Asian Fund...

Equity Funds - now in vogue

2011-04-09T18:22:00.000+01:00

Their back! For years, they've been pushed to the back of the pile as their emerging markets, commodities, alpha fund, absolute fund brethren took the limelight but now all is set to change with predictions of years of low-growth ahead (especially here in the UK). But the traditional UK focused Equity Fund is now a model of the past as traditionally they focused on oil, bank and utility stocks. With the banking crisis and BP fiasco there's been a new look at where to get the best returns. And now, with more global choice in high income earners, funds are now looking beyond UK Shores. One of the reasons for this is that high-yielding equity stocks are greater by a factor of four as increasing emerging market firms balance and reduce their debts and increase dividend payments. The added incentive for global income is diversification.

Funds to consider:

JP Morgan Global Emerging Markets Income Trust
Henderson International Income Trust

Finding hidden returns...

2011-04-09T18:11:00.000+01:00

With a new tax year starting here in the UK on 6 Apr, this weekends financial papers include hidden returns. Alice Ross (FT Weekend, 09.04.11) seeks talent amongst fund managers which shine equally bright and whose funds return just as well as their media-savvy cousins. For once, this article is refreshing as to often in the press these smaller lesser known funds are frequently over-looked. Take Peter Spiller for example, who runs Capital Gearing Trust whose fund has returned 17.4 per cent on average since it first started in 1984. Compare that to 11.3 per cent for the All-Share index. Other examples include, Nick Train, Finsbury Growth & Income Investment Trust whose fund has return 14 per cent on average; Bruce Sprout, fund manager at Murray International, a total of 224 per cent rise over the last 10-years also Mark Sheppard, fund manager at Manchester & London, 243 per cent rise compared to 64 per cent rise from the All Share index.

Unit Trusts also have their stars amongst funds such as: CF Walker Crips, Equity Income Fund ( run by Jan Luthman & Stephen Bailey); Cazenove & Schroders European Funds (run by Chris Rice and Leon Howard-Spink).

Can it get better? And what if's...

2011-04-04T21:39:00.000+01:00

Funds in a Flat Market

The Investment Trusts we should have invested in...

Emerging Markets overview

2011-03-30T22:18:00.002+01:00

Mark Atherton (ISA Insight, The Times, 26.03.11) has written an interesting article on emerging markets in the recent light of middle eastern unrest. Many investors have moved money from emerging markets where returns have fallen to developed markets where returns have been fairly flat. However, with emerging markets while the chance of higher returns are promising the risks as we have seen recently are also a factor that must be considered. Issues to affect emerging markets include rising inflation and interest rates. For example, China a lack of jobs and higher food prices concern some; Russia still has concerns on corporate corruption and poor governance.

But should investors concern themselves that much? Growth remains on average at 6 per cent compared with 3 per cent in developed countries. Therefore, now could be a good buying opportunity. It’s worth considering that emerging markets do vary and long-term considerations ought to be made as for China may have more short-term attractions than long-term as its aging population catches up. China’s investment has differed from that of Latin America where there has been more focus on business profitability than infrastructure investment. Russia, another emerging market area attracts attention, especially with its abundance in energy and commodities, however a lack of infrastructure investment and unbalanced economy concern some. Meanwhile, India receives glowing reports, for example, youthful demographics and favourable business climate attractive to entrepreneurs.

Fund suggestions:

First State Global Emerging Market Leaders Fund (Cautious)

J.P. Morgan Indian Investment Trust

Schroder GAIA Sloane Robinson Emerging Markets Absolute Return Fund

City of London Emerging World Fund

UK Small Company budget lift off!

2011-03-30T22:17:00.003+01:00

Following the Budget announcements this week, The Times suggests ways to profit from the announcements. Smaller companies are expected to gain especially in the technology and biosciences sectors. Housebuilders scored positively too after George Osbourne’s £250m fund for first time buyers. Construction should also respond to the improving climate.

The Times (26.03.11) share suggestions:

Imagination Technologies

Redrow

Barratt Developments

Taylor Wimpey

Carillion

Howden’s Joinery

British Land

Wincanton

Obviously, caution is advised especially because the financial landscape is still likely to be bumpy in 2011. Any investments such as above also require you to do your own research – don’t take my word for it!

Year-end choices

2011-03-30T22:17:00.000+01:00

Last year, there was no end of investment advice from the papers leading up to the tax year end but surprisingly, this year advice has been scarce. Inflation is an-going concern (reported this week at 4.4 per cent in the UK) and has been a central theme of investment advice for a number of months now.

Alice Ross in FT Money reports (26.03.11) that inflation concerns are driving investors choices. Amongst the most popular choices include, income funds, emerging markets and commodities. However, it is worth considering recent budget announcements on corporation tax which could mean an increase in dividend payments. It’s also worth noting that current inflation is being driven by rises in commodities.

The articles suggests five funds which could be inflation beaters:

Artemis Income (4.4 per cent yield)
Schroder Global Property Income Maximiser (7 per cent yield)
M&G UK Inflation Linked Bond (1.2 per cent yield)
Argonaut European Income (yielding 4.9 per cent)
Aberdeen World Income and Growth (yielding 3.9 per cent)

Investing in a world of global turmoil

2011-03-12T20:07:00.000Z

This week, let me set the scene, the Japanese catastrophic earthquake and tsunami, Middle East turmoil with civil war in Libya and new uprisings in Saudi Arabia; another return of bank debt problems in Europe. You've guessed it, we're wading in a pond full of black swans...

A review of this weekends papers does offer glimpses of financial hope.

Attractions of the wild frontier
Peter Temple (FT Money, 12.03.11) suggests now is the time to invest in north Africa and/or the middle east as prices he feels have been beaten down too far. Suggestions include: iShares Gulf Co-operation Council (SGCC)

And meanwhile...
The FTSE 100 is down 1.2 per cent; FTSE 250 down 1.3 per cent. However, consider this perspective that prices have risen since March 2009 by 66 per cent for the FTSE 100 and the FTSE 250 has almost doubled as Neil Hume states in his editorial. The reasons of course surround QE, result equities, bonds, commodities all are up. But of course, the Bank of England and European Central Bank have all warned of higher interest rates to come. The view now is to increase weight in defensive stocks such as telecoms, energy, healthcare and utilities all with high dividend yields. But bear in mind that a global recovery has been underway in both developed and developing countries. The FTSE 100 is currently trading on a multiple of 11 with earnings expected to increase by 20 per cent.

Dividends

2011-03-08T11:16:00.000Z

Some research on dividends has been circulating amongst portals and in newspapers this weekend. John Authers notes, 'Dividends should not matter, and yet evidently they do.' Cash paid out by a company comes off their books and is transferred to the shareholder. But its what the shareholder does with his payout is key. If, in the case of higher yielding stocks they choose to reinvest then it delivers a greater return over time. 'It appears that stock investment is all about dividends' notes Authers.

This research has shown that invest $1 in 1900 on the US stock market and by now it would have made you an additional $216 (annualized return of 5%). If dividends were reinvested this would have grown to $21,766 (annualized return of 9.4%). Dividends throughout this period grew by 0.48 per cent per year which does not it seems amount to much. However, it is through a correlation of stock growth and dividend growth which helps investors.

An investment portfolio can grow even more if that $1 was invested in higher yielding stocks compared with lower yielding stocks. For example, £1 invested in 1900 would have amounted to £5,122, however, invested in a high yielding stock and this would have grown to £100,160. And this is not only unique to the UK. 21 other countries also show similar trends.

See also:

http://uk.finance.yahoo.com/news/It-mind-bogglingly-simple-tele-367204370.html?x=0

Best dividends 2011 (DAX, Dow, FTSE, NASDAQ, NYSE, TSX) for dividend investing

2011-03-05T23:38:00.000Z

Best dividends 2011 (DAX, Dow, FTSE, NASDAQ, NYSE, TSX) for dividend investing

Super-Cycles

2011-03-05T23:03:00.000Z

http://uk.finance.yahoo.com/news/Gloomy-Malthus-provides-food-tele-2522167542.html?x=0

Middle East turmoil

2011-02-27T17:01:00.000Z

How investment strategies can change in just a few weeks...

I think even the FT Weekend Money section and The Times Money section both seem a but perplexed this week at thinking up fresh advice on protecting your portfolio. Can the world cope with another melt down? Where is all this going? What else safe is left to invest in? So many questions and no forth-coming answers.

The FT Weekend back page looms with an ominous title, 'Toxic combination that looms for road ahead'. And 'Oil price spikes set grim precedents'. Oh, yes, we're in for another bumpy ride.

John Authers in his article notes worries over inflation, rising costs in commodities, shortages in resources (agricultural foodstuffs and metals). And then of course oil which had been slowly rising anyway. But the surge in oil prices could go two ways, either another financial dumping or economic downturn for years to come.

Ironically, the FT suggests some investment positions. These include (believe it or not...) Brent Crude; gold, aluminium and for equities, energy, raw materials, telecoms, healthcare and utilities all performed when oil prices have risen.

FTSE100: Reassurance to reap the rewards

2011-02-13T12:04:00.000Z

Mark Atherton discusses the UK Stock-market. At the beginning of this year, pundits were suggesting this year would be a bumpy ride, however, others point to the continued strength of China and Germany and to recovery in the US. This strength should mean feedback to the UK as many companies earnings are overseas with year-end predictions now set at 6160 - 6350. UK Stock Market valuations are fairly reasonable at 12 times prospective earnings. Despite, difficult conditions in the UK, sterling is fairly low compared with other currencies. This should assist with competitively.

Certain sectors look more attractive: pharmaceuticals on high yields of 6 per cent. Telecoms and resources also look favourable, e.g. Vodafone.

Suggestions for good exposure to the UK:

(Cautious) Legal & General UK Index Trust. Tracks the FTSE Allshare (Annual Management Charge, 0.5 per cent)
(Aggressive) iShares FTSE 250 Tracker (Total Expense Ratio plus other charges, 0.4 per cent)
(Cautious) JO Hambro UK Opportunities Fund
(Aggressive) AXA Framlington UK Select Opportunities Fund

TImes Money: Need to know guide

2011-02-13T11:43:00.000Z

Two suggestions, Investec Enhanced Natural Resources Fund for long-term investment.

JPMorgan UK Active Index Plus Fund: 'Aims to take on trackers by offering active fund management along with passive-style low charges. However, returns will depend on the skill of the managers. If they do badly so will the fund."

Lower fees!

2011-02-13T11:38:00.000Z

There's one thing on FT Money's (05-06-02.11) mind this weekend. Fund Manager fees. Increased competition from Exchange Traded Funds (ETFs) and new players in the market (Vanguard) mean Fund Manager charges are under assault. This can only be good for the customer!

With this in mind, three new funds offer inflation linking.

Vanguard UK Inflation Linked Gilt Index Fund (0.15% Annual Charge + 0.40% Dealing Cost charge)
M&G UK Inflation 0 Linked Corporate Bond Fund (1.00% Annual Charge)
Swiss Global/Julius Baer Emerging Markets Inflation - Linked Bond Fund (1.30% Annual Charge)

Inflation is creeping higher in China, India and other Asian countries and this is likely to be exported back to developed nations.

Index-Linked bonds may hedge against inflation as interest payments rise in line with inflation values while UK Gilts redemption values increase in line with inflation.

Mixed signals with gold

2011-02-05T17:15:00.000Z

FT Weekend (29.01.11) seems to send mixed signals on gold. An article on restructuring your portfolio, 'Portfolios seek inflationary protection' states that few managers are buying gold. One reason maybe because 'there is a negative correlation between gold returns in sterling and UK Inflation with some managers views that gold has reached the top.

Another view comes from Dominic Picarda. He observes that gold peaked in December but sees this sell-off as healthy as gold had become rather over-bought. Indications are that 'highs in the gold market typically involve dramatic spikes and then perpendicular drops'. This hasn't been seen since the high in December and might indicate that the bull market has not completed its cycle.

Of course, the current political turmoil in the middle east should this continue might change things in the short-term.

Portfolio Inflation Busters

2011-02-05T16:50:00.001Z

The FT Weekend Money Section (29.01.11) ran an article on how investors need to reconsider their portfolios in light of stagnant growth and rising consumer prices or 'stagnation'.

The Rathbones Strategic Growth Model

UK Equities: 20%
Oversea Developed Market Equities: 20%
Hedge Funds - liquid: 14%
Hedge Funds - illiquid: 8%
Index-Linked Bonds: 8%
Asia/Emerging Market Equities: 11%
Commodities (precious metals, agriculture): 4%
Commodities (industrial): 3%
Conventional Government Bonds: 3%
Property - Real Estate Investment Trust: 3%
Cash: 2%
Private Equity Investment Trusts: 2%
Property: 2%

BestInvest Fund Portfolio

Global Equity Income Fund: 15% (Aberdeen World Growth & Income)
Asian Equity Income Fund: 11% (Henderson Asian Dividend Income)
European Equity Income Fund: 8% (Ignis Argonaut European Income)
Bond Funds: 20% (M&G Inflation 0 Linked Corporate Bond)
Commerical Property Funds: 8% (Schroder Global Property Securities)
Commodities Funds: 8% (Investec Enhanced Natural Resources, BlackRock Gold & Gen.)
UK Equity Income Fund: 30% (Artemis Income)

Age

2011-01-16T17:06:00.003Z

I thought this was interesting from http://uk.finance.yahoo.com/news/The-harsh-arithmetic-ageing-tele-2598301280.html;_ylt=Ai5Lba.mgMbX5H9FV0Eahqs9vrFG;_ylu=X3oDMTFkYjU0aTE0BHBvcwM3BHNlYwNuZXdzSHViQXJ0aWNsZUxpc3QEc2xrA3RoZWhhcnNoYXJpdA--?x=0:

"Only two things will determine if our children have enough money in 40 years' time to live like their grandparents: how much they save and how long they do it for.

The first of these is linear save £130 a month and you will end up with 30pc more than someone who saves £100 a month.

The second is far more interesting because Einstein's eighth wonder of the world the wonderful power of compounding makes that straight line growth exponential. While a 40-year old can look forward to £60,000 at 65 after 25 years of saving £100 a month with a return of 5pc a year, a 35-year old can expect £84,000 by the same age despite chipping in only another £6,000, a 30-year old is on track to have £114,000 and a 25-year old £153,000."

Commodities - China - Emerging Markets - Small Caps

2011-01-16T16:51:00.002Z

Seems the way ahead is unclear and full of uncertainty. Certainly lots of mixed signals from this weekends FT. 'Soaring food prices cast shadow over trading', 'Large bets fuel commodity bull run' shout some of the headlines from Market Analysis. And in the wake of political turmoil in Tunisia, part of which food prices and inflation are to blame, there are many discussions on whether we are in a commodity bubble again. I say again, because we appear to be seeing a re-run of early 2008, the year everything went pop. On this point, it is difficult to say yes. Disruptions to supplies and climatic changes (La Nina) have lead to cold winters in the northern hemisphere and flash flooding in the south, Queensland, Australia for example. These have had direct impact on supply chains. But as spring and summer emerge will we see prices unwind or will prices continue upwards? Merryn Somerset Webb might provide some of the answers who wrote a convincing article on the danger of a 'China collapse'. Merryn, places this at the head of a list of 'things that could go wrong' in 2011. China's growth has been spectacular but similarities are drawn with Japan that had also experienced rapid growth which ended in 1989. However, China needs the West to purchase its goods and drive its growth but for sure China must have experienced a slow down as we all drive down our costs. Link in rising everyday costs, VAT, commodities and of course the pressure to increase interest rates thereby jeopardizing the potential recovery.

China, however, isn't the only concern. Alice Ross writes, that investors have been piling into emerging markets for 18-months now and with increasingly specialised tools in which to invest such as specialised funds in Latin America and Asia. The MSCI Emerging Markets Index has risen 75% since 2008. But now, countries such as Brazil and China are trying to cool the economy down. This is hardly a surprise as it was well known that QE would drive money into these markets which were seen to be safer than the traditional developed markets of the west. Some commentators highlight captial flows which have been unprecedented of late indicating a potential correction. However, others note that they also represent buying opportunities. For example, contrary to above, certain analyists believe China looks good value and best potential.

Small-Caps
This from:

http://uk.finance.yahoo.com/news/Booming-Value-In-Small-Caps-foolcouk-3481616650.html?x=0

'I'm sure you don't need me to tell you that many small caps have been booming of late. This makes me nervous as a rising tide lifts all boats and I've been calling "bank!" here and there when I perceive the basic value has been outed -- only to the major gains being made just after the sell.

Such is the value investor's lot I'm afraid and you have to learn to accept it.

Also, anyone investing in small caps (even value ones) has to learn to roll with the punches. They won't all come good and there will be unexpected bad news from out of the blue now and again – but one decent winner can account for a number of losers if your initial selection criteria are sound.'

Mixed sentiment for a new year: up or down?

2011-01-09T14:49:00.000Z

Seems the papers this week are contemplating a mixed year now after last weeks predictions of good year for equities. Even gold receives mixed signals in the FT Weekend.

Primarily the worries revolve around emerging markets, inflows of new money, inflation, and a potential rise in interest rates. In the developed world, Portugal edges ever closer to needing a bail-out.

The Times runs an article on what will go up or down.

For Equities it says, prices will drift higher, some suggesting a 11 per rise.

For gold, despite a 2 per cent fall this week, prices should also drift higher with some suggesting, $1400 to $1600 an ounce, $2000 an ounce by end of 2012. Conclusion, gold will rise but not spectacularly.

Troubles ahead?

2011-01-02T12:15:00.000Z

Anyone who focuses on gold mining stocks will no that in some cases, risk goes with the territory. However, curiosity recently lead me to follow one tiddler to watch, that of Hummingbird Resources which was recently tipped in the Times. Hummingbird's sole mining interests are in Liberia, West Africa.

Another mining stock was also suggested as a share to watch in the Telegraph's predictions for 2011, that of Avocet Mining. Avocet currently has interests which it is trying to sell in South East Asia, but is looking to switch on cost grounds to Burkina Faso in West Africa.

The problem I have is that both these companies are investing in countries bordering Cote d'Ivoire which any day now is likely to implode. As was seen with Sierra Leone, other countries are not immune and any possible war may drag Liberia and Burkina Faso in Cote d'Ivoire's domestic arguments. These troubles have been going on since November so I am surprised that both the Times and Telegraph have made these suggestions. Obviously it is down to the reader to assess the situation first before investing but this underlines why it is so important to do your research first and not buy on impulse just because a tip is suggested.

However, should the troubles be sorted in Cote d'Ivoire then both Avocet and Hummingbird would be one's to watch so therefore you could argue that now is a buying opportunity.

PRICES AT 31.12.10
Hummingbird Resources, 165p
Avocet 3p

New funds for a New Year

2011-01-02T11:42:00.002Z

The Times runs an article picking a few unit trusts and investment trusts to follow for 2011. The funds include:

1. M&G Recovery
2. Edinburgh Investment Trust
3. British Empire Securities
4. Aberdeen Asia Pacific
5. JP Morgan Emerging Markets IT

This year the Times focus is on equity growth, split between defensive and aggressive growth (international & emerging markets).

The Guardian also suggests a number of funds and is going all-out for aggressive and daring growth:

1. Barings Middle East and North Africa
2. JP Morgan Global Consumer Trends
3. Baring Korea
4. Capita Financial Junior Oils

Share predictions for 2011

2011-01-01T16:46:00.004Z

The Times and Telegraph make their share predictions for 2011. All prices as at 31.12.10.

Telegraph (31.12.10)

Petrofac, natural resources, £1587
Aviva, banking & finance, 393p
Avocet Mining, natural resources, 3p
Royal Bank of Scotland, banking & finance, 39p
Barratt Development, construction & property, 88p
Royal Dutch Shell, natural resources, 2138
Vodafone, telecoms, 165p
Mulberry, retail, 902p
Informa, media, 407p
Bowleven

Times (01.01.11)

Aviva, banking & finance, 393p
BAE Systems, aerospace & defence 330p
Brewin Dolphin Holdings, financial services 158p
Chemring Group, aerospace & defence, £2904
Imperial Tobacco, consumer goods, £1968
Phoenix IT Group, technology, 266p
Tesco, food & drug retailers, 425p
Travis Perkins, construction & property, £1058
Tullet Prebon, banking & finance, 382p
Xstrata, natural resources, £1505

Tempus Top Ten 2011 (Times - 01.01.11)

BHP Billiton, natural resources, £25.51
BG, natural resources, £12.96
Northern Petroleum, natural resources, 109p
Catlin Group, banking & finance, 370p
Tullett Prebon, banking & finance, 382.75p
Intermediate Capital Group, banking & finance, 333p
Cookson, engineering, 658.5p
Capita Group, professional & support services, 696.5
F&C Asset Management, banking & finance, 84p
ev2 technologies, engineering, 91p

Guardian Money (01.10.10)

Aviva
BP
Tesco

December round-up

2010-12-22T10:27:00.000Z

Europe
Where is investor value? Well, the FT (12.12.10) thinks it lies in Europe and that's despite all the excitement of recent months. There is no doubt that euro equities have suffered with the FTSE Eurofirst 300 index down 4.5% in November. But, now could be the time to invest. Investment Fund Managers believe potential and value exists. Much of this value is currently in Germany, the economy of which is doing well as the most attractive stock market in Europe right now. But still Germany's stock market is trading at a P/E ratio of 20% below their long-term average. Compare that to French and Spanish stocks trading at 40% and Italy 63%. Another attraction is that many large European companies currently show strong balance sheets and have managed to cut debt and costs and increasing the amount of cash they hold. Companies include many German companies exposed to leisure, retail, travel and consumer products. Luxury products such as cars are also doing well on the back of expanding markets in China.

2010-2011
It's the end of 2010 and newspapers are starting to stir in assessing the year past and the year ahead.

Predictions for FTSE-100. It's a shame that this weekend reviews focus solely on the FTSE-100 as we have seen some recent dramatic rises in the FTSE-250. However, Neil Hume in FT Weekend editorial states the following. His predictions rate the FTSE-100 as trading higher this time next year. The bull market will continue with some predictions placing it at around 14 per cent. The reasons behind this drive would be the resolution of the Euro debt crisis, continued low interest rates, stronger economic growth, shift from bonds to equities. Some estimates place the FTSE-100 at 6250 - 6900. Previous high being 6930.

Agreed, because you've probably been thinking this that the ride will be bumpy primarily the eurozone debt issue which may not get sorted - especially with Spain and Italy; global economic recovery begins to falter; high commodity prices put a dampener on things; China mismanages its over-heated economy.

Some predictions:

Nick Nelson, UBS: 6700
Graham Morgan, Morgan Stanley 6400
Ian Scott, NomuraL 6250
Richard Kersley, Credit Suisse: 6500

The Times' spin (18.12.10) also adds some predictions. The FTSE-100 it says, will increase by 15%; emerging markets will also do well, increasing by 10% stirred on by US QE. However, Andrew Ellson does make a note that geo-political/currency shocks could easily change any increases. Gold, he notes may decrease by 20 per cent. Andrew notes that it is currently over-valued but possibly expect further rises. Interest Rates set to rise, possibly by 0.75 per cent in the second half of 2011 IF the UK economy avoids recession.

Predictions for 2011: commodoties and equities

2010-12-11T20:24:00.003Z

http://www.trustnet.com/News/Research.aspx?id=172183

http://www.morningstar.co.uk/uk/news/article.aspx?articleid=94422&categoryid=5&refsource=newsletter&lang=en-GB

Investing in Frontier Markets

2010-12-11T20:11:00.001Z

http://www.morningstar.co.uk/uk/news/article.aspx?lang=en-GB&articleid=94141&categoryid=505

Six Top Funds for Volatile Markets (Morning Star)

2010-12-11T19:57:00.001Z

http://www.morningstar.co.uk/uk/news/article.aspx?lang=en-GB&articleid=94145&categoryid=505

Future trends

2010-11-27T10:16:00.000Z

The Times (20.11.10) explores long-term trends in the global market. It follows the well known numbers game of increasing world population and decreasing resources, e.g. fossil fuels.

Europe
Prices are low and worth taking advantage of and risk is relatively low, especially in countries such as Germany. France and Spain are trading 40% below average.

Emerging Markets
Africa is increasing its interest from other traditional emerging markets such as Russia, China and India building infrastructure to access natural resources. Fund suggestion: Neptune Africa Fund hedged with wider emerging market exposure such as JPM Emerging Markets (7.5% exposure in S.Africa)

Social changes
Middles classes set to grow by 800 million people by 2030 half of them in China and India. To track this class JPM Global Consumer Trends Fund has returned 44% since its launch in 2008. Other funds include M&G Global Basics & Aberdeen Emerging Markets Fund.

Food and Water
All these new people as population increases will need to eat and drink. Performance in agricultural commodities could be less affected by the wider market. Exposure to agricultural products via Sarasin AgriSar. 'Pressure through climate change, water scarcity, energy shortages and trade battles seem likely to exert upward pressure on prices'. Other exposure through companies supplying products to the farming world, e.g. irrigation systems, tractors.

Energy
Demand for non-renewables e.g. oil and gas is likely to continue. A number of problems exist, a lack of investment in exploration and infrastructure and geopolitical problems. Expectations are that prices will increase due to a structural imbalance in supply and demand. Prices are expected to 'sky-rocket' as the realisation occurs that oil is behind everything. Funds to watch, Junior Oils Trust. For renewables, BlackRock New Energy IT. Other exposure through Artemis Income Fund and Newton Global Higher Income Fund.

Warren Buffet

2010-11-15T19:51:00.000Z

The legendary investor Warren Buffet once said "be fearful whilst those around you are greedy and be greedy when those around you are fearful".

November round-up: inflation

2010-11-14T16:36:00.004Z

November, and the FT Weekend (13.11.10) has a certain theme on its mind: inflation. A special feature on gold with regards to whether or not it should have a monetary role. But it interestingly examines the drivers behind the price of gold. The central theme backing 21-year rise in gold 'reflects a loss of confidence in paper money' and often signals future inflation. Add in a couple of rounds of QE which adds to golds appeal. But there are a number of differentials that should be considered as gold is not necessarily a good predictor of inflationary pressures. Instead it tends to measure investor anxiety about the future value of currencies.

Fundamental attractors include:

- stagnant mine output, shift in production to riskier geographies: West Africa and central Asia a move away from S.Africa, US, Canada, Australia.

- Scrap gold has in fact stablised the price.

- Demand from emerging economies. India as middle income earners begin to purchase gold.

- New purchasing strategies via ETFs.

These are all specific to gold and not inflation.

However, with low bank deposit rates and the ease of holding gold may mean that there has been a shift towards the yellow metal from cash. The fact that it does not yield any income is not important as low interest rates mean cash is doing the same.

Another consideration is sovereign default with horrendous deficits notably the US, UK and other parts of Europe. The one currency you cannot buy to defend your position, the one currency which is appreciating is the Chinese renminbi. So instead, investors buy gold.

Commodity Super Cycle

FT Weekend comment also considered the return of another commodity super cycle on the back of demand from emerging super-powers China and India. Of course, things went pop in 2008 and since then commodities have limped along. However, appears all is forgiven with mining stocks outperforming the FTSE Allshare by 12 per cent. One of the reasons is the sector is considered a good hiding place in light of more quantitative easing by the US, a weak dollar, a hedge against inflation and depressed bond yields which will result in pushing money into emerging markets supporting economic growth. As discussed before new economic drivers such as ETFs also make holding commodities easier.

On the downside, rising commodities will push prices higher as seen in producer countries, Australia, Canada, S.Africa. This of course will reflect in higher wages and labour in local currencies impacting on profits and cash flow.

Inflation

The leader in the FT Money section goes with the BoE's announcement this week that inflation will rise to 3.5 per cent. Investment managers are advising clients to invest in equities, gold and property. Recommendations also include: emerging markets, value and income stocks. Commercial property and gold are also positions to take.

BLUE-CHIP SHARES
Go long on equities. 'The FTSE Allshare currently trades at an estimated price to earnings ratio of about 12, which provides investors with a yield of about 8.33 per cent'. Some FTSE 100 companies offer high yields and combined with the fact that shares can compete with inflation (companies are real assets owning property, investments, employing staff, buying materials - all subject to inflation).

Commodities: trying to find value

2010-10-31T15:13:00.000Z

With gold riding high, the FT Weekend, Money section focuses in on where value lies. This is about the best article on commodities for a while as most have extorted gold's shining wonder!

Ellen Kellecher discusses a number of other precious metals and their potential. The three favoured metals are palladium, platinum and silver. Palladium has done exceptionally well over the last year. Majority of interest is from Hedge Funds as QE2 becomes more of a reality. However, wild swings should be expected over the following week as the BoE and FR make their announcements.

Platinum looks overvalued, pushed up by speculators with a potential correction due as there are fewer industrial uses than for palladium. Silver is also trading high, however, this metal tends to "underperform against gold when markets fall but outperforms it when they rise". Again, there is potential for a correction.

Overall, risks are high with precious metal commodities.

Finance babble goes on about commodities

2010-10-24T17:04:00.000+01:00

Seems the most exciting thing this weekend, as like the many weekends before it surrounds commodities. This is in light of the G20 discussion on the 'Currency Wars'. However, talks have stumbled due to the absence of the Brazilian Finance Minister who termed the phrase. As a result, gold came off the boil a bit this week with some downward thumps. Hasn't however, stopped the FT Weekend discussing 'runaway commodity prices reach highs'. Hardly surprising considering the global governments stoking up inflation via QE. The discussion aims to tease out whether a commodity bubble exists or not by looking at various commodities. Conclusion is that some are not on the rise (N.Gas, Crude) while others continue to attract financial inflow (gold, precious metals, wheat).