Category: Analysis & comment

Nov ’23 revalues the future

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In the news

It has been quite a busy month out there.

The Israel/Gaza crisis continues. Public opinion is shifting against the Israel government here, even in North London – which would normally be one of the most sympathetic neighbourhoods outside Tel Aviv.

The Ukrainians are left feeling somewhat zero-sum in the battle with Israel for foreign support and attention. Some informed opinion now says the war is over, bar the fighting, and the only thing left is a land-for-peace deal. And the USA election, which is still almost a year away. Sigh.

How military control of Ukraine has changed since the full-scale invasion
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Feeling broke

FIRE v London28 Comments

My psychology around money has changed significantly over the last two years. While some of that is captured in my monthly portfolio updates, I thought it was worth recording some of my emotions while they are still fresh.

Two years ago

Turning the clock back, my financial situation was, in word, ‘flush’. The stock market boom had just crested – S&P500 was at 4400, FTSE-100 was at 7000.

I generally had a surfeit of cash every month, just from earnings – never mind investment income. I saw several exits over a 2 year period in my angel investing activities. I reinvested both sheltered income and unsheltered income for compound investment growth. I was unmortgaged. Base rates were almost zero – which I exploited with a margin loan – leveraging my portfolio by a target 12% loan-to-value.

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Mayday for IBKR margin lending

FIRE v London41 Comments

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.

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