Investing

Is passive investing causing a bubble?

Is passive investing really worse than Marxism? Is it creating a ‘frightening risk for markets’? Or are the concerns around passive investing nothing more than trumped-up fearmongering? This series begins by examining one of the most fear-inducing (and therefore one of the most persuasive) claims thrown at passive investing – that the rise of passive …

Is passive investing causing a bubble? Read More »

The best investing blogs

Following on from my last article on ‘The best investing books for beginners’, which proved to be a popular post, I’ve compiled a list of my favourite investing blogs below. Eventually my intention is to collate all my favourite resources (books, blogs, and podcasts) into one place, so this post makes a start at collecting …

The best investing blogs Read More »

Smooth is what we aim for

Let’s say I offer you a simple gamble. You take £100 of your own money, then toss a coin. If it’s heads, you win 40%, if it’s tails you lose 30%. Would you accept the gamble? Simple maths says you should – the expected return is +5% (50% * 1.4 + 50% * 0.7). But …

Smooth is what we aim for Read More »

Why nobody likes diversification

I work as an investment manager, and a few years ago I had a boss called James (not his real name). His job was mainly portfolio construction, but he occasionally took client meetings and provided portfolio updates to some high net-worth individuals alongside the relationship managers. He had a vast repertoire of favourite sayings that …

Why nobody likes diversification Read More »

International diversification: The evidence – Part 3

If you cast your mind back to this post (Against International Diversification), we saw some legitimate, evidence-based reasons which might support not diversifying internationally. Specifically, we saw that cross-country correlations are high, and that correlations are likely to converge to 1 during a crash. But are these arguments good enough to justify heavily overweighting our …

International diversification: The evidence – Part 3 Read More »

Return expectations – 2020 edition

How much can a UK-based investor expect to make on their investments over the next 10 years? To help answer the question, I’ve collated 10-year equity return forecasts from as many different (reliable) sources as I could find – 13 in total. As with most things investing-related, the data was heavily US-biased and almost always …

Return expectations – 2020 edition Read More »

International diversification: The evidence – Part 2

In the previous post we saw that international diversification: Helps ensure one country’s drawdowns don’t affect your overall portfolio’s returns too much, Reduces risk through lower volatility, drawdowns, and vulnerability to Black Swans, Increases returns through minimising the volatility tax and owning the few countries which are driving returns. But that’s not all… Diversification reduces …

International diversification: The evidence – Part 2 Read More »

International diversification: The evidence – Part 1

We owe a lot to the ancient Greeks. They laid the groundwork for a huge swathe of today’s society, including democratic government, philosophy, theatre, architecture, mathematics, jury-based trials, medicine, and the Olympics. But there’s one aspect of Greek culture which hasn’t managed to endure the test of time – its stock market. The Greek stock …

International diversification: The evidence – Part 1 Read More »