One day, my opening line to a blog will be “Another year of champagne, world peace, taut young men who are nifty-with-a-hammer, cats, comfortable high heels, fat-free chocolate and diesel ride-on mowers". But I digress…
Way back in January, Hargreaves Lansdown re-launched their 'Wealth 50' to much fanfare, a reduced list of investment picks to help customers navigate choice. The poisoned chalice that was the Woodford Equity Income fund was on this list at a time when many others had dropped it. And no Terry Smith - he of Fundsmith fame - to general press disdain. I will observe that some of these same journalists have spent much of the year writing about the folly of following ‘star managers’…
Then we had Brexit hooha (repeat to fade) and markets soared ahead. The FTSE 100 rose by about 10% from Jan to April as stock markets tried to guess the short-term future in a large moneyed global game of Risk.
Uber floated in May to great excitement. Until it was less exciting, as 2 weeks later the engine stalled. Generally IPOs went phutttt this year and the glossy sheen on trendy Growth and Tech stocks lessened. WeWork went from a private valuation of $47 billion to near bankruptcy in two months as investors dared to ask why renting buildings and then sub-letting parcels of this space deserved the eye-watering multiples usually given to sexy tech firms. Even if the founder had stubble and they gave out free beer to hooded trendy clients.
Of course #Woodfordgate blew up in June and access to the fund was closed on 3rd. Those who invested at launch are about 20% underwater today and estimates are that another third could be lost as positions are sold and the first sums paid back to investors in January. Underperformance is not a crime and – as unloved UK-focussed stocks show signs of recovery - we could potentially see figures next year which show that Woodford’s portfolio would have had a good 2020. But that’s not the point. He bought stuff he couldn’t easily sell. He strayed off-piste. And he took over £8 million in fees on this closed fund after customer access was stopped in June. That’s grubby.
In slightly cheerier news, in July, one of the country’s largest pension funds for small employers – NEST – announced it was no longer investing in tobacco. 2020 will be the year in which retail investors (that’s you and me) are assaulted by news of sustainable, ethical and/or impact investing so brace yourselves folks. There will be a lot of fund manager hot air re-packaged as carbon-neutral cooling air. Coming up in January, we’ll be launching new pages to help you to dig deeper into this space and sort out the wheat from the biodiverse chaff.
Come July, the pound and the FTSE fell as the Bank of England and others got into a tizzy about a no deal Brexit. Then followed a period of hokey-cokey with 'In Out In Out' taking traders on a rollercoaster until we all got so bloody bored of Brexit that markets almost started to just take anything and everything in their stride.
Fast forward post-election and the FTSE 100 is up about 6% over the last 2 weeks as financial markets breathe a sigh of relief that Corbyn did not get in and Brexit certainty returns.
There have been high points of 2019 too. Broker AJ Bell has committed to donate up to £10 million to charity in three years through a new corporate social responsibility initiative. That’s if earnings per share increase by 100%. But if not, founder and boss at AJ Bell, Andy Bell, will make that up personally. This is real corporate social responsibility, more so than sponsoring some local butterflies or removing plastic cups from the tea room.
Vanguard will launch their low-cost SIPP next year and we’ll see more price competition. Sometimes it’s important to take a moment to look back and acknowledge progress. Any of us could set up a pension, online, filled with a managed bag of investments in the world’s largest companies and countries for £37 a year for every £10,000 in our pension. That’s pretty good.
And let’s not forget that the FTSE 100 will (probably!) end the year up by about 12% and the main US index is up about 25%. I wonder if we’ll see a Daily Mail headline 'Billions wiped on to the stock market'?
We end the year with over 9,500 blog subscribers. We’ve had about 375,000 visitors on the website. 280,000 visits on the Best Buys tables. We launched our new pricing calculator which has spewed out over 25,000 calculations. And some 600 of you have helped us with our research projects, telling us how we can make the industry better. Thank you all so much for your comments, feedback and interest.
Have a brilliant Christmas, enjoy the downtime and the bad telly, the family fights over Pictionary, time away from trains and commuting, time with kids/nature/pillows, box sets, Brussels Sprouts, church, shopping centres… whatever floats your boat!
Thank you all. See you in 2020!
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