Sometimes the words just don’t come easy. It’s hard to discuss subjects where opinions are dramatically split. At the best of times keeping up writing the blog is only possible after I have satisfied all client enquiries, all regulatory obligations and the continual studying of the day to day gyrations of global stock markets. Apologies to my fellow Catholics (I’m not practising) within our business congregation, but;
“Bless me father for I have sinned. It’s been almost 2 months since my last confession”Dave Allen
Let me explain. It’s not that there has been too little to write about, it’s possibly because there has been too much to consider, to then condense and then pass on within blogs. The media has said everything there is to say, over and over again. I could see little merit it just giving you my additional slant on Biden, Vaccines and Brexit. We have all been bombarded with endless news, facts and charts. Like many of you I have been suffering from information overload. The flow has been relentless, every waking hour something is added that warrants our consideration.
Continue reading “Get in Touch”
These are testing times. I’ve talked before about my feelings of anger in What Next! and Charlie countered that emotion with her blog entitled Finding Joy. Thankfully this blog isn’t going to be about coronavirus testing at all, even though Bolton seems to have become notorious as a party town, inhabited by gangs of soap dodgers.
No the testing I’m referring to is the daily test we are being subjected to as investors. Everyday, another UK company makes thousands of individuals redundant and declares as upbeat an earnings call as they can. We have seen a gradual fall in the value of our savings over the last few months as it has become clear that the recovery has been kicked down the road somewhat. This year may even turn into a reprieve from death row for countless turkeys.
The Behaviour Gap
The graphic above is what I look to when I get sidetracked. It’s OK to worry and speculate over what could happen but there’s no point really. We need to focus on those things that matter which also lie within our control. It was given to me by Carl Richards when I attended one of his workshops. His financial graphics are powerful stuff.
Continue reading “Testing Times”
We invest in shares of many different sizes. Nucleus for instance is worth about £110,000,000 (£110 million). Together we own £1,250,000 worth of shares (£1.25 million). We therefore own about 1% of their shares. Together we could buy 75% of Nucleus, but that would be putting all of our eggs in one basket.
The largest share in the UK right now is Astra Zeneca at £110,000,000,000 (£110,000 million or £110 billion). So Astra Zeneca is 110,000 times larger than Nucleus. Together we own £2,100,000 of their shares (£2.1 million). Thankfully they have many more drugs in their pipeline, other than the recently stalled Covid-19 vaccine. We own only an infinitesimal amount of their shares between us.
Astra Zeneca is the largest component of the FTSE 100 index. It accounts for 7.2% of the index which in turn tells us the overall size of all 100 shares. The FTSE 100 index currently stands at £1,527,778,000,000 (£1,527,778 million or £1,527 billion or £1.5 trillion)
These numbers tell us something about market indices. If you have been a client for sometime you will remember that the FTSE 100 index is a market weighted index. In simple terms it means that although there are 100 companies on the index, every company is not represented with an equal 1% holding. If you buy the index, £7 in every £100 invested is in AstraZeneca. In fact £24 in every £100 invested would be in AstraZeneca, BHP, GlaxoSmithKline, HSBC and Diageo. One quarter of your investment in just 5 shares alone.
Continue reading “Size Matters”