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”

Feb ’23: taking profits

February was cold, but mercifully dry. The days are becoming a welcome bit longer. London is filling up again, post covid, though Mondays and Fridays remain subdued to put it mildly.

Market movements in February

In the markets, February started strongly, but then something clicked mid month – something I will call inflationary gloom. That inflationary gloom has tempered markets considerably. The VWRL graph below tells the story – especially when coupled with the GBP:USD yellow line – showing how the GBP dropped 2% early in the month.

We ended the month with the USD up 2%, USA stocks and AUD down significantly, FTSE up, and bonds everywhere down.

Continue reading “Feb ’23: taking profits”

My 20 year property returns

I was pleased to have reached the 10 year point of tracking my investment portfolio last month.

But my net worth includes an important asset class – property – that I don’t normally track, but which I have held in some form for over 20 years.

So, this post takes a look at how my property assets have performed.

Property works completely differently, for me, than my investment portfolio. For starters, I have never bought a home as an investment. But let’s start at the beginning.

My property owning history

I nearly got on the property ladder in the mid 1990s.

I hadn’t realised, until a friend pointed it out a few years too late for me, that in fact one of the easiest times to get on the property ladder was the moment when I graduated and moved to London. My first job earnt a reasonable London salary of just over £20k, and 1 bed flats in a reasonable part of Zone 1 in London were available for under £70k (now £800k-£1m, sigh).

Mortgage rates had dropped from >13% in 1990 to around 7%. The interest costs could have been around £5k, a quarter of my first-job income. That was in the mid 1990s. It didn’t occur to me to buy a place, and of course those property prices were so high…..

By the late 1990s, buying a property had become a lot harder. But once I was earning £40k+ I decided to take the plunge. I found a reasonable 2 bed place very close to Zone 1 for £200k (now £500k). The mortgage (at around 7% interest, i.e. interest costs were £13k, a third of my gross income) and the deposit (£20k, if I remember rightly, for a 90% mortgage) were a massive stretch….. and then I was gazumped. By the time I reorganised, the places I wanted cost £220k+ and I couldn’t quite afford it.

Continue reading “My 20 year property returns”