Comment and opinion for retail investors in the UK
Here is a quote from a Morningstar analyst writing in 2017. We will spare their blushes by omitting an actual name:
‘Chipmakers tied to artificial intelligence, such as Nvidia and AMD, are significantly overvalued, in our view, as the hype around their graphics chips used in artificial intelligence far exceeds our views regarding how revenue growth will truly materialise. Meanwhile, we fear that the tremendous growth of their graphics chips used in video gaming will not last forever.’
This month I am going to address a subject that no-one really likes talking about but which I think I have a responsibility to address because I and my subscribers are all getting that little bit older.
As the Pink Floyd lyric goes ‘another day older, another day closer to death’, which is just a truism, but as we get into our 60s and 70s and beyond (and most of my subscribers are in that age group), the number of days is not so many as it was.
I know from you, my readers, that one of the principal concerns people have when they start running their own portfolios is that, although it is not so difficult when you have some training and have accumulated a bit of experience, it is unlikely (although not so in every case, I know) that a surviving partner would be comfortable taking over at short notice, especially as this would be an added responsibility during a period of grief and when other practical tasks of some complexity may need attention.
So, what would you want to happen to your portfolio management if you are still in charge when you die, or if you lose your mental capacity, which could be a slow and let’s face it, hard to accept or even recognise process?
Can we (I count myself in on this problem, naturally) do something now to prepare and make the situation easier for our loved ones?
Most of my subscribers are couples and one partner (male or female) is ‘running the money’. A small number of you are single, but there is still a problem that has to be resolved by someone else when you depart the scene. Older age may imply that the problem will arise sooner rather than later, but experience has shown me that even the relatively young can be hit by serious or even fatal health issues.
I believe we ought to at least do some logical thinking about this real issue and this article is an attempt to get you started. As always, I am happy to respond to feedback and suggestions and pass on good ideas and advice anonymously.
[Read more…] about Deep Dive – May 2024An update to my server host firm’s arrangements has meant that we need to do some work to stop Gmail seeing my notifications as spam and bouncing.
This is a test mail to see if the problem had been resolved. Non Gmail users can safely ignore it!
You will likely have noticed that the news on inflation is less positive than wished for by central banks and markets have modified their assumptions on when interest rates will start coming down. This has been reflected with direct impact for those renewing fixed rate mortgage contracts as at least in the UK, rates have actually gone up slightly.
So, is that just simply bad news?
It is certainly not good news for bonds and the FT headline today that the climate for fixed income investing is ‘unsettling’ is a good way of describing the situation.
You may have noticed a really significant increase in the price of gold bullion in recent months.
This is because something that we have known about for some time – continuous topping up of gold reserves by the Chinese central bank – is now seen as part of a more global pattern. With such large buyers active in the market, the price is bound to be well supported.
The reason for this anticipated expansion of central bank buying? Probably 2 main reasons, I think.
In my Deep Dive article at the start of April, I highlighted some reasons why prices of individual shares, or groups of shares might become detached from logically reasonable valaution levels by supply factors that were not ‘normal’.