Get your cash to love you back

Where do financial journalists invest? 8 hacks reveal what’s in their portfolios

latest-news-1516414There’s no magic formula when it comes to investment. You can’t time the market, or predict with any certainty which events will impact asset prices. The best way to invest is to look at the fundamentals of a company or a particular market and make a decision based on its long-term prospects, but even this can be educated guesswork. You would think that people whose job it is to write about investment would have a better insight than the average Joe, but I know a few (myself included) who have been burned by bad decisions in the past (I’m looking at you, gold and natural resources funds). So I thought it would be interesting to ask some of my fellow financial journalists what’s in their portfolios. Please note, none of this should be taken as an endorsement of any particular fund, it is simply an excuse to be nosy. So here are a selection of ISA investments, given on condition of anonymity, from financial hacks:

1 & 2 These two journalists are 100% in cash as they are only saving into Cash ISAs. The deposit rate on cash is very poor at the moment because, for now at least, UK interest rates are still at a record low. But equity markets are at record highs and some analysts have warned a correction is on the horizon. Maybe at this point, these two will be looking to put their cash to work in the equity markets.

3 This journo has a long time horizon for his investments and a high tolerance for risk, so he’s split his portfolio between emerging markets and special situations (these are companies undergoing some sort of restructuring or change which means their shares look undervalued compared to their future potential). He’s got two-thirds of his ISA in First State Asia Pacific Leaders, and Aberdeen Asian Smaller Companies, which is an investment trust.

asia-2-1471414The remaining third is in Fundsmith Equity, which is a 20-30 stock concentrated portfolio investing in global equities, and Marlborough Special Situations.

4 This hack doesn’t cover investments as closely as some of the others, so she opted for an off the peg, ready made ISA (more on these here) from a well respected provider. She chose the Adventurous portfolio in the range, so her fund selection will have a higher risk/reward profile which is well suited to her age and ability to invest for the very long term.

5 This journalist wanted exposure to the major developed equity markets, so she went with just a couple of conviction bets, splitting her portfolio 50/50 between two funds – Schroder UK Growth and Fidelity American.

6 The biggest equity markets tend to be well covered by analysts which means it can be harder for active fund managers to ‘add alpha’ by finding mispriced investment ideas no-one else has. So index trackers can sometimes be a better, cheaper way to get exposure to these markets without trying to beat the index return. This journalist chose L&G’s UK 100 index tracker, and BlackRock’s Emerging Markets Equity tracker. She also has AXA Framlington Biotech to add a bit of spice to her portfolio, and she has property exposure through a buy to let flat she owns, which gives her a return of around 15% a year.


7 This journo is a big fan of investment trusts and also has a keen eye for a bargain. She snapped up shares in the Edinburgh investment trust after they slid on to a big discount when star manager Neil Woodford stepped down, handing the trust to Invesco Perpetual’s Mark Barnett. She also has the TR European Growth investment trust, run by Henderson, as well as the Somerset Emerging Market Dividend Growth fund, which is more than £1bn in size and is currently trying to stem inflows.

8 Small- and micro-cap stocks are going to be the big winners over the very long term, according to this journalist, although she is prepared for a volatile ride in the meantime. She has exposure to Marlborough UK Micro Cap, the soft-closed Marlborough Nano-Cap Growth, and Aberdeen Emerging Markets Smaller Companies to play this theme. Her core funds are Richard Buxton’s Old Mutual UK Alpha and Crux European Special Situations, run by former Henderson manager Richard Pease.


She also likes sector-focused funds for diversification, and has AXA Framlington Health and Henderson Global Technology in her ISA.

Expecting wealth managers to outperform in the coming years, she also has small direct holdings in Hargreaves Lansdown and Brewin Dolphin shares.

So, I hope you found this little peek into other people’s portfolios interesting and enlightening. What’s in yours….?


Funds in the doghouse: Kick these lazy mutts out of your portfolio


In my last post, I suggested new investors should read around the subject of funds to try to figure out what kind of investment suits their needs, as there are some great pieces of analysis out there which can help. But even seasoned investors can benefit from cross-checking their portfolios against up to date research, to make sure they aren’t harbouring any investments which are simply not pulling their weight.

One really good report which looks across equity funds accessible to ordinary UK retail investors is investment manager Tilney Bestinvest’s Spot the Dog. Spot the Dog identifies those funds which have performed consistently badly compared to their benchmark over a decent time period, and also highlights the best performing funds in the same sectors.

The firm has just released a new edition of the twice-yearly list. Encouragingly, it shows that the total number of underperforming funds has fallen from 60 just six months ago to 37, although the group notes the fall in total assets invested in these funds has been less impressive – from £23bn to £17.6bn. What this means is that plenty of investors are letting lazy mutts sit around in their portfolios failing to make them decent money. Time to let the dogs out!

Tilney’s report covers most of the major equity sectors and offers detailed analysis of the market as a whole. I don’t have space to reproduce all their tables here so I’ll just show you their highlights and lowlights among the ever-popular UK equity funds:

In the doghouse 3-year return on £100 (£) Relative 3-year return (%)
Elite Charteris Premium Income * 108 -17
IFSL Harewood UK Enhanced Income * 109 -16
M&G Recovery 115 -16
Aberdeen UK Opportunities Equity ** 117 -15
Halifax Special Situations 120 -12

* Benchmark FTSE 100 ** Aberdeen UK Opportunities Equity merged into Aberdeen UK Equity on 10/07/15

Ok, so there are a few you might want to weed out of your portfolio if any of them are languishing there. But what about the good ones in the same sector? Here are Tilney Bestinvest’s top picks:

Pedigree picks 3-year return on £100 (£) Relative 3-year return (%)
Standard Life UK Equity Income Unconstrained 188 37
Unicorn UK Income 178 30
JO Hambro CM UK Dynamic 169 23
JO Hambro CM UK Equity Income 162 18
Old Mutual UK Alpha 160 17

Source: Tilney Bestinvest

The group says:

The message of Spot the Dog is simple: no matter how thoroughly you research your choices ahead of investing, the fate of funds and their managers can change over time. Many fail to deliver. If you are going to invest in actively managed funds, it is vital to closely monitor them, or choose a service that will do this for you.

If you want to start choosing funds but you’re brand new to investing, have a read of these 10 useful tips for beginner investors which will help you get going.

Click here for the full report in PDF format.


Start investing! 10 useful, jargon-free tips to help beginner investors

A lot of people who really should be investing are not because the fund management industry is still struggling to explain the basics in a clear and accessible way. Last week I had a chat with Richard Stone, chief executive of online stockbroker the Share Centre. We both agreed that more plain speaking is needed to convince people that investing is important, and doesn’t have to be boring, scary, or complicated. So Richard has kindly put together 10 jargon-free tips to help you if you want to invest but you don’t know where to start:

  1. Investing is risky, so keep an element of savings in cash for a rainy day.
  2. When investing, do so for the long term.
  3. A little and often is a really good way to save and invest – many firms offer reduced dealing costs if you invest a little bit each month.
  4. Decide whether you are investing to try and achieve a level of income or capital growth – or a mixture of the two – and how much risk you are willing to take. How much of what you invest could you afford to lose?
  5. Do some research – look around the market and find a provider you think suits your investment needs.
  6. If you’re new to investing or don’t have time for copious amounts of research, don’t try and pick the next winning market or stock – you may get it right, but you might not. It is better when starting out to find some general funds which give you exposure to the market as a whole. Some firms have lists of preferred funds where experts have selected funds they think are the best of their type – this may help you make those first investment choices. Some firms also have ‘model portfolios’ or pre-selected baskets of funds which reflect different levels of risk and can provide a good starting point.
  7. Make sure you understand what you are going to be charged and for what. Make sure you look at all the extra charges – e.g. for withdrawing cash or transferring out – not just at the headline rates for the
  8. Some providers charge value related fees – i.e. a percentage of the value of your account each month – others charge flat fees. The one that is best for you will often depend on how much you are planning to invest over time and how frequently you think you will trade. It can be complicated, but charges can make a big difference to the value of your investments so it is important to work out what is best for you.
  9. As a new investor, look for service providers that have good customer service – this is always difficult to judge so look out for awards won or customer reviews on sites like Trustpilot. You may need some help so it’s important that the service provider you choose is there for you when do.
  10. Try to invest as tax efficiently as possible – always use an ISA first, particularly for investments now the government has made the first £1,000 of interest income on cash tax free anyway. Even if you don’t have the full £15,240 annual allowance to invest, you should still use an ISA account first as all income and capital gains are tax free within an ISA.

Wait, what’s an ISA?

It stands for Individual Savings Account – it’s just a savings account with a little fence around it which protects the interest you make on your investments from the tax man as long as you have less than the £15,240 limit. That’s it. Your money is not stuck, you can move it in and out as you wish. The other version of it is a Cash ISA, which just works like a normal savings account, although you may get a better rate if you lock your money away for a certain period. As mentioned above, you can choose a ready made Stocks & Shares ISAs or you can choose your own funds or stocks in which to invest.

A ready made ISA or any other kind of pre-selected model portfolio is like buying an ‘off the peg’ outfit instead of designing your own (a self-managed portfolio) or getting a designer to make you a one-off piece of couture (a more expensive bespoke portfolio built just for you by a wealth manager). The minimum investment in a ready made ISA varies by provider, but it is often £10, £25 or £50 a month or a lump sum of at least £100.


What’s the difference between the many providers that offer them?

Generally, what it boils down to is cost and choice. Bigger providers will offer you more choice, maybe with lower charges because of economies of scale, but you might not get the same level of customer service as at a smaller firm (it’s the difference between shopping at your local greengrocers versus going to Asda).

I want to choose my own investments, what should I pick? stocks-and-shares-1239810-1919x1281

Ok, this is when you need to geek out a little bit and do some reading – there are loads of investing magazines and websites aimed at consumers which can give you great information. Do you care where your money goes? Now is your chance to support those companies making the world a better place. Or maybe you should start by investing in your home market – most people will be familiar with the household brands that make up the FTSE 100 (an index made up of the 100 biggest London-listed companies). A large-cap UK equity fund invests in these stocks. You could choose a global fund which can invest anywhere around the world, you could buy a bond fund which works by loaning money to companies to help them grow, you could back a particular market such as the US or China, or a specific sector such as tech. There is literally a fund for everything. But I would start simply and pick something you understand. The Share Centre’s Richard Stone says:

Photography by Paul Wilkinson Photography Ltd.
Richard Stone, the Share Centre

“Investing should be fun. Enjoy it. If you’re not sure of where to start, invest in businesses you know and think are doing well. For example, you may have a view on the latest Apple products or Marks & Spencer ranges and how well they are selling and being received amongst your friends and family – that may itself be a pointer to how well those companies will do in future.”

I’ll do a lot more fund and stock selection stuff as the blog develops which might help you. But for now, the point is you don’t need to be scared of investing, it’s really not that hard. And you can start off with as little as £10 a month, which is less than the cost of a cocktail in a central London bar. Can you really afford not to?

What IS all this stuff? Shopping, sweat, and penance

Some of us are in debt or don’t have savings because we paid our way through university, stretched ourselves to get a mortgage, had a kid, or undertook some other kind of important life project. But a lot of us simply went shopping and bought a whole lot of crap.

It’s hard to resist the temptation to accumulate things. We are bombarded with advertising from all angles, especially at times when we are a captive audience. There are now little TV screens in the back of black cabs, digital advertising along the escalators on the tube, screens on the Heathrow Express. It’s difficult to reject that consumer mindset when advertisers are constantly screaming at you to spend, but it can be done, and life can be better for it.


Needless spending

When I was trying to pay off my credit cards, I found myself wondering where that money had actually gone. A lot was on meals in fancy restaurants and mojitos in cocktail bars, and I don’t regret that spending in the least because those were fun experiences with people I care about. What bothered me was the amount of needless stuff I had accumulated. Shoes I couldn’t really walk in so had never worn, clothes which didn’t fit and I never ‘slimmed in to’, enough cosmetics and toiletries to open a Boots, boxes and boxes of crap, ‘storage solutions’ to manage it all. The extent of it really hit home when I had to move house twice in the space of a year – I filled an entire van with crap, just mine, no-one else’s, and I had to cart it up a lot of stairs. I sweated my balls off for that stuff, my muscles ached for that stuff, I couldn’t find enough places to store it all so I tripped over that stuff. What was it all anyway? Did I really need it? No I did not. So I started to eBay it.

A painful process

I ripped my CDs and then sold them, I got rid of most of my books and bought a Kindle instead (I’m not going to lie, this was painful. I was very attached to my stuff.) Anything in season which hadn’t been worn in the last three months had to go, whether sold, donated or recycled. I was ruthless. Even if I sold something on eBay for just 99p and accidentally undercharged on the postage, I considered that the buyer was still doing me a favour by removing this item from my life and my home. The whole process was a total pain, taking all the photos, listing every individual item, then the wrapping and carting it all to the Post Office. I tried to see it as penance for my greed in acquiring all that stuff in the first place. Gradually, my Paypal balance crept up and I was able to start throwing that money at my credit cards, which helped to clear them a lot faster.

Living with less

As these items were leaving my life, one by one, I felt lighter. It becomes a bit addictive – you start looking around to identify the next thing you can get rid of, and the next thing. Items you decided were essentials last week start to look less important. I started reading about the ‘living with less’ movement, and found it totally fascinating. For example, could you live with 100 things or less? This is such a brilliant concept, it makes you question every single possession. Do you have 85 pens hanging around in a junk drawer in your house? Maybe you only need one. Do you have 25 pairs of shoes? Could you survive with one pair of trainers, one pair of sandals and one pair of smart shoes? How often do you really use your bread maker, your egg whisk or your Magimix?


My main fear about doing this was that the second I got rid of a seldom-used item, I would suddenly need it for something. Sod’s Law dictates that this will probably happen, but if it does you can always borrow what you need from a friend, or even rent it for a day. This is infinitely better than storing it forever, maintaining it, insuring it, and whatever else goes with ownership of that item.

Today I challenge you to remove five things from your house and your life, whether by donating, gifting, selling, or recycling. Say no to too much stuff.

You definitely need a budget

Adios Amigo….why a guarantor loan could cost you friends as well as money


I’ve been wanting to write this post for a while. In fact, since I started noticing a lot of ads for companies like TrustTwo, Buddy Loans, and Amigo Loans. ‘Surely guarantor loans aren’t a thing now,’ I thought to myself, ‘Have we learned nothing from the payday loans debacle?’ So I started googling, and to my dismay I discovered there are actually more guarantor loan companies emerging than you can shake a stick at.

What exactly is a guarantor loan?

It is defined as a credit product in which the borrower asks a guarantor, typically a friend or family member, to agree to act as security for a loan. If the borrower defaults, the lender can chase the guarantor for payment. These products are similar to payday loans in that they are delivered quickly, often within 24 hours, and they are promoted to people with bad credit.  However, Citizens Advice notes they are often for larger amounts – between £1k and £7.5k, compared to an average payday loan size of £260. Their interest rates are lower than payday loans but still very high at between 39.9% and 49.9% – the average is 46.3% – and they last longer, between 12 and 60 months.

The FCA (the financial regulator) introduced a cap on payday loans at the start of the year and, by June, Citizens Advice had reported a 45% drop in the number of complaints it dealt with related to payday loans. But it is concerned the problem is simply being shifted elsewhere with the rise of these new lenders.

Why should we worry?

These companies may use the word ‘buddy’ and ‘amigo’ and have cheery adverts and slogans, but I doubt whether you would still be buddies with your guarantor if he ended up saddled with your very high interest loan. A major problem is that guarantors often don’t realise what their role is when they sign on the dotted line – far from being simply a ‘character witness’, they can be chased for the outstanding debt even if the original borrower dies! And even if no-one dies, your friendship certainly will if you are unable to meet repayments and your guarantor is subject to aggressive collection tactics.

And then there is the issue of affordability and the eye-wateringly high interest rates offered to these ‘sub-prime’ borrowers. Citizens Advice gives the example of someone they helped who took out a £5k loan, repaid at £197 a month. After making payments totally £7k, only £1k of the loan capital had actually been repaid. That is truly shocking.

But people with poor credit still have the right to borrow if they want/need to. So what’s the solution?

CREDIT UNIONS! I don’t understand why they aren’t more popular, credit unions are amazing. It seems to be a little known fact that they generally have a mandate to help their members get out of debt, and this includes lending you money at a reasonable rate regardless of your credit rating. Instead, they will make you do a budget and will lend based on their assessment of your ability to repay. In the past, credit unions had stringent criteria to join, such as your profession or the borough you live in, but now they are much more open so it’s easier to become a member. Usually, in order to borrow from them you need to save a small amount each month, to help you build up a small savings pot and reduce the need for future borrowing.

So that’s my tuppence worth on guarantor loans, but probably not the last I will write about this subject. Fingers crossed the regulator has something to say about these products pretty soon, before they become the next financial nightmare for consumers.

Click here for the full Citizens Advice report.

Click here to find your local credit union. 

What are your biggest financial goals?

I’m interested to know what, if any, goals people are setting for themselves in terms of their finances. I would say my priority at the moment is drip-feeding as much as I can into my Stocks & Shares ISA, and then I can decide whether that’s going to fund a house deposit in future, or if I should give up on that dream and just rent forever, European-style. Vote in the poll and leave me a comment to let me know your what’s on your wish list.

Six signs you’re facing a financial crisis, and what to do about it 

You wouldn’t think a financial crisis could creep up on anyone, but it’s amazing how quickly you can lose your grip, especially if you are already close to the edge. Here are six big red warning flags which signal you need to get your finances under control. red-flag-1309138-1920x1440

You are making the minimum payments or less. 

As I’m sure you already know, only doing this will take forever and a day to pay off the balance on your credit cards. If you haven’t already, use an interest calculator (Moneysavingexpert has a good one) to see how long it will actually take you, and how much it will cost overall in interest. If you’re not managing to cover the minimum payments, you are already in a debt crisis and should skip to the end of this post.

You don’t know how much you owe. 

You hide all your credit card statements unopened in the back of a drawer, you don’t know your online banking password, and you would probably estimate your total debt at about 30% lower than it actually is. But you can’t take control until you have the full picture. As painful as it is, gathering up all your paperwork and figuring out exactly what you owe is a crucial step to regaining the upper hand. Yes, it might be a big ugly figure, and you might cry, but at least then you’ll know that number is only going to get smaller from here.

You are suffering chronic stress and sleeplessness because of money. 

Money worries can really grind you down both emotionally and physically, so it’s really important to keep taking care of yourself. I know it sounds like a platitude, but remember it is only money, your health is what matters. Not getting enough sleep can make manageable problems seems insurmountable. I can’t sleep when I’m worrying about things – herbal tea, bedtime yoga, and valerian tablets have all worked for me in the past. If you are chronically stressed and depressed, go and talk to your GP.

You cross your fingers every time you try to use a cash point.

If trying to get cash out is an exercise in hope and prayer, this means you are not budgeting and you don’t know how much is in your current account. You urgently need to look at your bank statements and make a simple budget  – more on this to come in a future post, but for now, even writing down your (truthful) income and expenditure on the back of an envelope is better than nothing.

You couldn’t cope with an unexpected expense.

If your boiler broke or your car engine caught fire or you needed emergency dental work, would you be able to cover the cost? If the answer is no, you are living on borrowed time and need to get an emergency fund together quickly. Yes, your debt is also an emergency, but you will fall further in to debt if you have nothing set aside to help you when (not if) a crisis hits.

Your debt is growing each month.

If your debt is creeping up and you don’t really know why, you are probably using credit to cover a shortfall in your day to day living costs. This is very dangerous and definitely not sustainable. If you are borrowing to pay existing creditors, it won’t end well and you need to take rapid action.

If you need debt help, where can you go for support?

If you recognise yourself if any of the above scenarios, it’s time to call in the professionals. I can’t stress enough how much better it is to get a grip on things before you are unable to service your debt or an emergency strikes. But don’t pay unscrupulous companies for help with your debts, there are lot of brilliant, free resources you could consider instead:

StepChange – an independent debt charity offering free advice, they are usually very busy so don’t stall until you are in crisis as you may have to wait a while for an appointment.

Christians Against Poverty – a charity funded by donations from individuals and the Church, but you don’t need to be a Christian to use its free services.

PayPlan – a free debt management organisation funded by the credit industry.

National Debtline – lots of downloadable resources and debt help over the phone.

Citizens Advice Bureau – helps you understand your rights when dealing with creditors.

Debt Advice Foundation – this charity has lots of tools and calculators to help you analyse your finances. has a wealth of guides which are a mine of useful information, and the forums, especially Debt Free Wannabe, are full of knowledgeable and supportive people who will look over your budget and make suggestions. But obviously do not rely on the advice of strangers on the internet, do your own research before making any decisions.

Welcome to my blog

This is a blog about personal finance, designed to help you get out of debt, ramp up your savings pot, learn to invest, budget properly, spend smartly, and get on top of your financial affairs. I’ve called it Truly Madly Money to reflect the fact that you might love money but it doesn’t always love you back and, consequently, it’s tough to hang on to.

I used to be terrible at managing my own money, I didn’t open bank statements, never knew how much money I actually had and, unsurprisingly, I was struggling with debt. I found that obsessing about my budget and tracking my spending in detail gave me back ownership of my financial affairs and helped me escape the trap I was in. I still check all my accounts at least once a day so I know exactly what’s going on at all times, because knowledge is power.

Making efforts to simplify my life was also a big step towards escaping the consumer mindset which was keeping me in debt. Although I’m definitely not a fully fledged minimalist, I think we can learn a lot from those people who care less about ‘stuff and things’, since our society’s rampant consumerism is what has led a lot of us into financial trouble. Listening to what minimalists, declutterers, organised and productive people have to say has helped me think about my financial life in a different way, so I’ll also be bringing some elements of this into my blog. My aim is to give you some ideas to help you build a better relationship with your money.

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