Its Not Harry

Comment and opinion for retail investors in the UK

Mark Potter

YAP – a quiz

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I have included quizzes before and this one again is designed to test your expert understanding of the workings of investment markets. As most of my readers are quite experienced, the questions are in the main not the sort one can answer with multiple choice box ticking!

In fact, the answers are more of the ‘short essay’ type in most cases, not that I expect you to actually write them out! I recommend thinking about what you know and deciding how confident you are that you have got to grips with the relevant topic.

I also have no intention of writing out the answers, but will publish a video with reasonably in depth explanations in about a week’s time, so get thinking!

I hope you won’t just use Google or AI, but if you are really stuck, that will still help you learn.

The Questions

  1. List 5 of the main high level asset types available to UK retail investors and the type of legal instruments that could be used to buy them
  2. Explain in brief terms 3 different ways of diversifying investment risk and give examples for each one.
  3. A media company trading in the USA was listed on the NASDAQ in 2017 and is valued by the market at 300 billion USD. It has a P/E of 41 and pays a dividend at 0.3%. Is this a growth or value stock?
  4. Another company listed in the UK mid-250 was spun out of a bigger group 3 years ago, although its business has existed for decades. Its P/E ratio is 11.2 and it pays a dividend of 3.8%. It is thought to be a takeover target with US interest in the public domain. What IA sectors would perhaps include funds that would own this share?
  5. What do AUM or FUM mean? Why is that data relevant if you are reading an opinion from a fund manager about the prospects for the market sector in which they invest?
  6. Why are investment trusts (IT’s) more likely to be more risky than OEICs, by absolute certain operation of UK law? Have you heard of SABA?
  7. Why might selecting investments in the IA sectors Emerging Markets and Asia Pacific ex-Japan offer very little diversification?
  8. Why do growth equity funds fall more in value than high dividend value funds when interest rates rise?
  9. List 3 reasons why an investor mnight see some merit in investing in a muti-asset, passive tracker fund (eg Vanguard Lifestrategy) instead of running their own portfolio?
  10. Now list as many disadvantages as you can think of that would need to be understood before taking such a decision.

Deep Dive – February 2025

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Trump 2 – a different and personal take on the implications

 So far…

At this early stage of the new US President’s term of office, it is not possible to make any reliable predictions about the global macro economic impact beyond examining the potential threats, which I have already done in a number of ways, as have many, many other commentators.

I will this month offer what is absolutely only an opinion, based on my personal view of the world, so this piece is not claimed to be educational.  Feel free to disagree with me: I will be satisfied if I have prompted you to think about the situation in a new way or added an angle to your existing assessment.

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YAP – snippets

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Firstly an apology if you tried to view my latest video on YouTube yesterday and could not.

I had set it for a midnight release but did not check in which time zone that midnight was. I am still getting used to using a video server and all that entails.

Because it worked for me immediately, I did not mention that fact in the release announcement. Sorry if you wasted time trying to view it. It is a public video, so you don’t need any password or login to access it from the link. However, if you use YouTube rarely, please do ensure that your device has the up-to-date version running.

My bad, as the current fashion has it!

Of more interest is some data just published by Morningstar, below:

The only thing I would add is that my personal intuitive assessment of the probability of Morningstar being right is only 50%!

YAP – a momentous day

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I have written with some trepidation about the potential consequences that will result from Trump 2.0. The global macro-economic outcomes of some of the promised policy actions could be dramatic.

Markets seem to have taken an optimistic turn in the last few days. That probably means that participants are betting that there is more bluster than real intent in the bombast that has always characterised Donald Trump’s attempts at global politics.

“I see trouble ahead…”

I am in no way convinced that this optimism is justified but am happy to look at better numbers in my portfolio valuations, of course!

I am not proposing that the most damaging or bizarre of the touted policies will, or will not, be actioned. I don’t really think we will know that for a while, although some actions are promised even for today.

It often takes years for some major political missteps to impact economies and financial markets permanently – Brexit is a great example of that, although I know not everyone agrees with my view that for Britain’s financial markets it was a mistake. Only the most partisan could now argue that there was a boost to the UK’s global status as a financial centre in the years since Brexit. Other consequences are now apparent, although not much publicised.

I personally remain very nervous about the immediate future consequences of the 47th presidency of the USA. I think there are a few likely scenarios, but it is pointless speculating ahead of the inauguration.

Rather better to keep a close eye on the news and market reactions to the news as it emerges, not forgetting to try and work out the longer-term consequences. I will do my best to add interpretation as soon as I have an opinion.