Mayday for IBKR margin lending

Regular readers will know what a fan I have been of margin lending from Interactive Brokers. No longer. If you’ve read my other posts (like this or this or this) on margin lending, and are interested in exploring further, make you read this post before you do.

Why I used to like IB’s margin loans

IB offers credit secured on its portfolios, priced very competitively. This provides remarkable flexibility, at a low price. I have been an eager user, enjoying how I can stay (more than) fully invested but still find funds fast to make an unexpected angel investment, pay for a home improvement project or settle a tax bill. In reverse, I can repay instantly and very flexibly, and I can convert either cash holdings or loans from one currency to another instantaneously.

These advantages apply both to IB’s loans, but also to the portfolio loan I have from my private bank. However IB is much easier to operate, thanks to their excellent online platform and reporting. And IB is cheaper. So IB has been my ‘go to’ lender.

Continue reading “Mayday for IBKR margin lending”

Apr ’23: Wind and windfalls

April saw the season of long weekends begin here in the UK.

Easter saw me inspired by the Ermine to check out Dorset’s Chesil beach. We struck lucky with the weather and had a fine, distinctly non-London, time, over a very blustery Easter weekend. My walking shoes seem to have shrunk and after a 15km yomp what happened to my toes doesn’t make for blog-suitable content. Maybe I should stick to London after all, where such tribulations don’t seem to happen.

The economy seems to keep inflating along. Inflation has ‘dropped’ to 10.1%, latest figures show. Which really has you wondering what happens to interest rates. Rates seem high right now, but in the real world they are barely half of the rate of inflation. Something has to give – will it be inflation dropping as energy ‘laps’ last year’s price rises, or will wages chase inflation upwards pulling the Bank of England with them? Or will policymakers find ways to prolong this inflationary period, to deflate the country’s record high level of national debt? Time will tell.

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Mar ’23: Harvesting tax losses

March has been rather a wet month in London. Wet, and cold. This translates into the ski slopes in the French Alps (finally) having great conditions – sadly too late for me to enjoy.

Further north, it’s been a month of big change in Scotland. Nicola Sturgeon, the populist/nationalist leader north of the border, and one of the most formidable politicians in the UK, resigned in February. But March has seen her party, the SNP, in disarray. I don’t follow Scottish politics closely, but am no fan of nationalist parties and I regard March as a good month for Scotland and the UK.

Closer to home Rishi Sunak, the leader of the populist/nationalist party in England (still called the Tories but don’t let names mislead you), had a very good month thanks to his Windsor framework for improving/ameliorating the arrangements between Northern Ireland and mainland UK. Given that the problems here all arose from Brexit, which Sunak was an original supporter of, I am not minded to give him too much credit for this Windsor Framework. The new arrangements clearly lag the pre-Brexit arrangements. It grates to see Sunak championing N. Ireland’s advantages being a member both of the UK and of the EU, and until I see Tesla/similar set up a car factory in Northern Ireland I don’t think he fools anybody.

Another story that got a lot of coverage last month was how miserable the London Stock Exchange is. Versus the USA stock markets, the case is pretty unarguable. But the point that gets missed by all the UK coverage is that all the other major stock markets, such as Hong Kong, Australia, etc suffer from the same concern. A combination of its tech strengths and network effects have given the US what appears to be an unassailable lead. But somehow I consider the US has plenty of capacity for self harm, and the UK and EU are likely to sync up their financial markets more in the future, so I am more optimistic about London than the current media.

Market movements in March

In the markets, the key stories remain energy and inflation. Interest rates seem to be close to their peak, which has helped lift bonds and depressed the USD. Equities generally sagged, though tech stocks rose significantly – this combination left the US up, the UK down, and Europe/Australia somewhere in the middle.

Continue reading “Mar ’23: Harvesting tax losses”