Are index funds parasites free-riding on the active stock pickers who do the hard work of identifying value? One controversial proposal goes to the heart of the matter… — The ongoing debate as to how to rejuvenate London’s flatlining financial markets continues to yield intriguing proposals for reform. Not least the suggestion that a transaction tax should be levied on passive investments. Last week Chancellor Jeremy Hunt used his Mansion House speech to announce a set of sensible, if…

Investors seem to have little to fear from a Starmer administration keen to emphasise its commitment to fiscal responsibility — Consistently well ahead in the polls since the Conservative government’s implosion last summer, Labour seems ever more likely to win next year’s general election. So it now seems appropriate to ask: what would a Labour administration mean for investors? Until recently it has been impossible to say. Keir Starmer’s leadership…

For long-term investors the balance of power between China and the West matters less than the continued growth of the global economy — Perhaps the most perplexing story of this year’s markets has been the disappointing performance of Chinese stocks, which had been expected to surge in the wake of ‘The Great Reopening’ that followed three years of Covid restrictions. Far from outpacing the wider global market, which has rallied, however hesitantly, the…

Robin Powell and Jonathan Hollow’s new book on financial planning isn’t afraid to spell out the right and wrong ways to invest — What is the point of saving for the future? — it’s too complicated, and I have left it too late. I may as well as well enjoy life now by spending whatever I earn, and rely on the state pension when the time comes… How to Fund the Life You…

A new book in The Economist series offers a comprehensive guide to investment principles but is perhaps not for the complete beginner — A new book How to Invest in The Economist series published by Profile Books has some old lessons to impart about the perennial opportunities and hazards of investing in equities. Though billed as an introduction for the private investor this is a rather demanding read, the argument dense and the…

What the Starship launch indicates about the future of investing in the space industry — The brief flaring of the SpaceX Starship last week offered a vivid image of the promise and risk attendant on taking a financial stake in the future of the space economy. Funds tracking the sector are perhaps the purest example of the thematic ETFs I discussed a few days ago…

On the peculiar difficulty of letting go of a fund that had been intended to be held for the long-term — It is one of the most elemental investment principles: when a security, no matter how carefully selected, has disappointed, and looks set to continue to disappoint — sell it. Simple to state, but hard indeed to follow, as I had cause to appreciate (again) when I finally let go of…

A simple image for picturing active and passive investment — and why we think one is more deserving than the other — The abstract language of investment strategy can obscure as much as clarify the overriding objective: to hold as many profitable shares as possible for as long as possible. This brief post presents a simple metaphor that might help illuminate what we are trying to do. It’s imprecise and certainly not…

ETFs that promise to follow a market trend may not make you rich. But perhaps that is to miss the point… — In an investment world that still attempts to cultivate image of sobriety thematic ETFs are unashamedly ‘cool’. Tracking a market trend rather than an asset class or region, thematics promise to allow investors to follow an evolving megatrend, be it wind, solar, hydrogen, blockchain, space, the metaverse, or even gender…