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Changing of the Guard

Happy New Tax Year!

Over the weekend the new tax year entered along with “Storm Kathleen”. Is it me, or does the media generated as each named storm arrives allow for ever more drama? Storms get scarier sounding now they have names. Apparently it was the 11th storm of this season; apart from the odd tree giving up and falling over there was nothing to see really in the NW for this or the preceding 10. Sure planes were diverted, and yes that’s always been the case. Nobody knows whether it would have stopped the trains from running – because most weren’t running again anyway. So all in all, most UK citizens won’t remember this one like the previous 10 they have already forgotten. However we have some scary historic storm numbers building, to help prove weather events are more extreme today than they have ever been. I will refrain from commenting on climate change in this blog as I wanted to publish a very short one this time. In Bolton, even a storm with a name on it means it’s just been a case of bring the sheets in off the line and if you going out put your big coat on.

Agnes, Babet, Kieran,Debi, Elin, Fergus, Gerrit, Henk, Isha & Jocelyn. No Howard once again! And why no Grace and Rose and Daisy? – not scary sounding at all, Storm Grace.

Spring Cleaning Jobs

Once we get into the new tax year we embark on the project to get as much of our clients savings as possible into a tax free wrapper. ISAs as everybody knows are a no brainer. Why pay tax on your savings when you don’t have to?

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Fiscal Year End

In a week or so we will all be in the new tax year. Let’s take a look at how the last one played out for us as investors.

Although it has been 5 years or so since I watched a single game of football (no World Cup, no Euros, no Manchester United) I thought I would add a football theme to this performance blog. Like football, investment can be tedious at times and stretch our patience, but then there are moments of magic too. Let’s hope the current magic continues.

Football verses Soccer

Although I haven’t watched a game of soccer (US speak for football) I have watched many games of football (US speak for American football). If only the Yanks would speak English, it would make understanding much easier. Language difficulties are not just linked to sport. In investment we have shares they have stocks, we have gilts they have treasuries, we have bonds and they have….bonds. OK there are some similarities too.

I love the strategy behind football (I’ve started so I will stick with it), I like the concept that the two teams never meet. Unlike in soccer , where the same 11 players of the first team play the 11 players of the opposing team. Striker can tackle striker and defender can tackle defender. In football there are two teams and special teams too. Star quarterback never goes up against the opposing teams star quarterback. The offensive team is met by a defensive opposition, and vice versa. 11 players on, 11 players off when the tide turns. Talk about parking the bus, in football they bring on guys the size of a tranny van and then park a second set of vehicles behind that row.

Individual team members are chosen because;

  • They can throw a ball, but not necessarily catch one well.
  • Catch a ball, but probably couldn’t throw well.
  • Run fast.
  • Dodge.
  • Block.
  • Kick.
  • Think.
  • Be thoughtless.

There are parallels to be had in investing. Defensive shares versus growth shares for instance; there is a time in the game to choose one or the other or both. The list above is a proxy for asset allocation in investment. But I’ll be honest, I just love all of the football stats.

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Steady

Budget Summary

I despair at the state of the UK and UK politics generally. Probably global politics. Was that even a UK budget? I’ve already forgotten most of it. I don’t need to remember much because I know most of what was said was just hot air.

  • A new British ISA – I know this isn’t going to happen, within 1 week it’s already been placed on the back burner until 2025.
  • An attack on holiday property entrepreneurs from 2025 – I’ve no idea who else will be buying these former run down properties. I expect seaside towns and other beauty spots to decline without this inward investment. Formerly poor areas will now lose a large part of their much needed tourist economy. Sure local property prices will become more affordable as “out of towners” retreat, but without those tourist jobs the locals will not have the income to be able to buy a local property.
  • Non-Doms told to leave in 2025 – like the Conservative Party even has a say in this. they will be toast probably by November this year. It was always Labour policy to do this. I’ve looked at this area in some detail. Non-Doms do pay tax, pay VAT on their outsized purchases and stump up oodles of stamp duty land tax on multi-million pound property purchases. Non-Doms also employ a small army of accountants, solicitors, financial advisors and investment managers (not me), cleaners, gardeners, hairdressers, manicurists, dog walkers and property maintainers. All of which will lose customers – meaning lower VAT receipts and lower income tax on profits. They are not tax dodgers, just because the investment income they earn and leave abroad isn’t also taxed in the UK. Where does any political party expect to replace all of this lost revenue?
  • Plus some other drivel set to come into force in 2025 & 2026. Who believes any of that will happen with a change in Government?
  • The NHS is broken, let’s throw another £3.6bn at it in the future (a future which we are all sure doesn’t include a Conservative Party). More empty promises.
  • Oh yes – there was the bribe of a reduction of 2% in NI for those working below the age of 66. The trouble is, 1 in 5 eligible “workers” do not work in the UK or register for benefits of any kind. They don’t pay tax or NI. Obviously it is the 4 in 5 that do work that pay all of the taxes. Will £10 a week per worker change any voters mind? I doubt it.
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