Holly's Blog: Bestselling funds, bonkers property and ladies - a call for help!

Just when you thought the balmy Spring weather 🧊 could not put more of a spring in your step, the first Big Bank has predicted that the Federal Reserve’s fight against inflation will lead to a recession in the States late next year.

According to the gloomy forecast from Deutsche Bank, add the war in Ukraine to a market already facing supply chain pressures, with energy and food costing painful amounts, and the only response that Central Banks have is to give us a downer with a dose of higher interest rates. And fast.

They forecast that the US economy will shrink at the end of 2023 and into 2024. The small silver lining to their miserable outlook is that they expect a mild recession, with unemployment peaking at about 5%, before things normalise in 2025. Oh goody.

Deutsche Bank are by no means the only Gloomies. The JP Morgan Chase CEO Jamie Dimon remembered that the 1973 oil embargo sent energy prices skyrocketing and pushed the world into recession.

Some people are mentioning the stagflation word – not inevitable by any means but a risk. If you don’t want to be outdone by the local bore in the pub or that know-it-all at the school gates, you can get my quick lowdown on what stagflation is here. It’s basically the financial equivalent of only eating lettuce (low growth) and still putting on weight (high inflation). It sucks.

Property is surging ahead

If we cast a look back in the rear-view mirror, property has gone nuts in the last 12 months. In March, house prices were up 11% in a year, to a record high of £282,753.

That means that the average house basically ‘earned’ as much as the average person last year. (£28,110 compared to £28,860). For just sitting there, on its lazy ass foundations! And over the last 2 years, prices have gone up by an average of 18% - nearly £44,000.

Away from bricks and mortar, and in the US, investors’ caution and inflationary worries are boosting ‘10 year Treasury yields’ (basically, ‘yield’ is the interest paid each year if you lend the US Government money for a 10 year period). Paying a ‘yield’ of 2.65%, these are at a 3 year high.

Treasury Bonds and Tech Stocks are like 2 opposite ends of a seesaw. When bonds are up, tech stocks are down - the tech-heavy Nasdaq Index is down about 12% since the start of the year.

Why? Nervous investors and rising interest rates. “I’m a bit worried, the world looks mad and I guess I get OK returns from the boring Government stuff. Not in the mood for that spicy tech risk.”

What’s everyone else buying?

Each month we look at the best-selling funds across 4 major platforms which collectively have over 70% of DIY investor’s assets. Fundsmith Equity made it to the most bought 10 funds across all 4 platforms. As for investment trusts - City of London and Scottish Mortgage were bestsellers across all 4. And if you’re a fan of Exchange Traded Funds (a popular, low-cost and easy way to access big global markets, cheaply), bestsellers in March were Vanguard’s S&P 500 and FTSE All World which featured in the most bought across 3 platforms.

You can see the full lists of all 10 bestsellers for all investment types in March across all 4 platforms here.

Of course this is all looking backwards and also relies on the Wisdom (or Folly?) of crowds. Retail investors. Each month we curate a list of investments, powered by research house FE Fund Info, which reflects the favourite funds, investment trusts and ETFs of both professional fund selectors and retail investors. There are currently 108 on the list and you can have a browse here.

Ladies – a shout out for some help

This week I’m calling all women who are old enough to have owned a ra-ra skirt (mine was 3 tiers with red piping since you ask), have bought a Bananarama single from Woolworths or remember Tony Blair being voted in….We are launching a new service later this year to focus on specific groups of readers. Our first focus group will be women in their 40s and 50s. I’m looking for 500 Founder Members to give us about 20 minutes of their time over the next 2 months, to keep us real, and make sure we build what you want. Some of you have helped us already and we’re now ready to test the first iterations with Real People ;0)

Please help? Founder Members will be treated like Goddesses And get first and free access to our webinars, content and sessions with female advisers who are contributing too. Please don’t feel you need to know anything about finance to join us.

And finally – do we have any vision impaired readers?

This week I’ve been contacted by someone who finds it hard to see – and so relies on phone dealing to trade. Which can be expensive and makes good people on the phones super important. He’s also a bit fed up with the pretty poor performance reporting on most mainstream platforms. Tell me about it! I said I’d ask you for any tips? If you are vision impaired and have a suggestion or experience to share – whether it’s who to avoid or who is great – please email me in confidence so I can help this chap out.

Thanks everyone.

Have a lovely weekend. Can someone please turn the sun up?

Holly