Portfolio Relevant Archives

13/02/202113/02/2021

Service Update

A Platforms role

A platform is our outsourced administrative arm. It allows us to;

Send you income and withdrawals.
Allow you to invest into a tax wrapper (product) such as a pension or an ISA .
Allows you to get a valuation 24/7 and to monitor all transactions that take place.
Hold all your cash and other assets such as shares securely.
Make and settle any trades which we decide to make on your behalf.
Report to financial regulators and HMRC as necessary.

This is not an exhaustive list, but I’m sure you get the picture. Admin, admin and more admin. It leaves us free to do what we do best; offer regulated financial planning and advice and manage your life savings through both the good times and the bad.

Additional Platform Added

Since we commenced using platforms in 2003 we have used just 3.

SIPPcentre which became Investcentre.
Selestia which became Skandia which became Old Mutual.
Nucleus which in around 12 months time will probably become James Hay.

This week we added a fourth. Welcome to Transact. Here follows the blog I never thought I would write.

01/10/202001/10/2020

Testing Times

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.

09/09/202009/09/2020

Size Matters

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)

Comparisons

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.