General investing

Do financial advisers add alpha?

People hire financial advisers for all sorts of reasons. They can sort out your tax planning, estate planning, retirement planning, and all kinds of other good stuff. Every financial adviser will provide services designed to add value to your wider financial life, outside of what goes into your investment portfolio. If a financial adviser helps

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Modern Portfolio Theory: Part 2

My last post told the story of how I was recently contacted by a sophisticated investor, who was wondering how they should be applying Modern Portfolio Theory to their portfolio. That post gave a quick introduction to what Modern Portfolio Theory is, and how MVO can be used to apply it to portfolios. In summary,

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Modern Portfolio Theory: Part 1

I was recently contacted by a sophisticated investor who asked how I’d apply Modern Portfolio Theory (MPT) to their asset allocation process. They already had an MPT framework in place, and wanted to know how to improve it. I thought it was an interesting question, so spent far longer than I should have done consulting

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The best investing blogs

Following on from my article on ‘The best investing books for beginners’, I’ve compiled a list of what I consider to be the best investing blogs below. The blogs are listed alphabetically. There’s a mix of UK-specific blogs and US-focussed blogs – but I’ve made sure that the US blogs in the list are equally

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Size matters: how small is too small?

In my free time, I like to kick back and relax by reading books with titles like ‘All about Asset Allocation’ and ‘The Intelligent Asset Allocator’. Unsurprisingly, based on their titles, most people would prefer to watch their company’s compliance training videos – the ultimate test of anyone’s boredom threshold – than read these things.

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Average UK savings by age

This post explores the average UK savings by age groups. It also looks at the average amounts in UK pension accounts, and the average UK net worth by age. I’ve included links to the source data, and included my own highlights below each chart. All data is taken from the Office of National Statistics (ONS),

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Should you use duration matching?

We’ve made it! This is the final post in the series on duration matching. Before we conclude, let me explain what we’ve seen so far. No, there is too much. Let me sum up. — Duration matching makes it possible to eliminate interest rate risk in your bond portfolio by matching the duration of your

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Against duration matching

This is the fourth post in a series on duration matching. The first post covered an introduction to duration, what duration matching is, and why we might want to use it. The second post looked at why we shouldn’t be afraid of using long-duration bonds, especially if we also have a long-term investment horizon.  

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Duration matching in practice

This is the third post in a series on duration matching. The first post covered an introduction to duration, what duration matching is, and why we might want to use it. The second post looked at why we shouldn’t be afraid of using long-duration bonds, especially if we also have a long-term investment horizon.  

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Why you should own long-term bonds

This is the second post in a series on duration matching. The first post covered an introduction to duration, what duration matching is, and why we might want to use it. The key idea of duration matching is that we can eliminate interest rate risk by matching our bonds’ duration to our investment horizon. If

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Duration matching: an introduction

Much of what I remember from my investment exams is now occluded by the mists of time. Just like all other exams, you remember the bits you use in your day job, and almost instantly forget the other 90%. Included in that hazy 90% is a concept known as asset-liability matching. The idea behind asset-liability

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Average pension pots [UK]

Every now and then it’s interesting to see where the UK’s at with its finances. So I thought I’d use this week’s post to see how the average UK pension pots are looking. And I found it pretty surprising. I was not only shocked by the average size of pension pots, but also how many

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Return expectations: 2022 edition

How much can you expect to make on your investments over the next 10 years? Just like last year’s edition, this post aims to answer the question of what sorts of returns UK-based investors can expect over the next decade. I’ve collected 10-year equity return forecasts from as many (reliable) sources as I could find

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Have bonds ever failed?

We’re in a weird period for bonds right now. Interest rates are at all-time lows, bond yields are at all-time lows, and it’s looking more and more likely we may have to deal with a positive stock/bond correlation at some point soon. So should we still be investing in them? The purpose of bonds is

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How to predict bond returns

Hello again, it’s been a while. I won’t bore you with the details of why I’ve taken a few months off, but I’m now out of hibernation and ready to dive back into the world of investing. During my time off, my inbox filled up with questions. Alongside the usual requests for sponsored posts, advertising

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What is the rebalancing bonus?

For my next post, I’m planning on having a look at how often you should rebalance your portfolio. i.e. how often you should buy or sell your investments to bring them back to your target weights. But as I was writing, I realised before we can figure out the answer, we first need to understand

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What if my broker goes bust?

Choosing the right broker is one of the essential steps on the road to managing your own investments. It can also be a tricky one. Firstly, there’s the matter of costs. Everyone has a different portfolio, with differing levels of trading, in different tax wrappers. So finding the cheapest broker will be dependent on your

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