Volatility led by the US has escalated quite dramatically. It’s impacted market values – especially some US tech cos and Nasdaq has drifted 10% now but the concerns over tariffs and the Ukraine situation and the US reaction to it, let alone clumsy politics and diplomacy, have not helped. Suddenly Nvidia and Tesla aren’t looking so clever.
There are a few sweet spots – such as defensive assets (ie armaments’ manufacturers) and banks had been holding-up well. Oil has slumped in price following a surprise Opec+ announcement (North Sea Brent the lowest since October 2021) but inflation here and in the US remains stubbornly higher than hoped by politicians (no surprise here in the UK and tariffs won’t help over ‘there’ either). Whether the fear that interest rates here won’t be cut or by as much as hoped have helped Sterling rally but the Dollar has been weak too.
It has been a pleasure to receive the first compensation through the Rowanmoor (C.I.B Life and Pensions Ltd) Dunas Resort Cape Verde Islands’ pension scam. Wholly inappropriate ‘advice’ was given to so many pension holders to buy into hotel developments. We had to do significant work to arrive at this conclusion for the client but the first award of £50,000 has come, at last, to our first client under this specific scheme, unrelated to the Organic frauds where the monies were channelled into dubious things related to The Resort Group International Plc’s development. Fortunately, we were also able to steer him away from very costly lawyers who gave the impression of acting for the ‘scheme’ whereas in reality they were just claims-chasing and out to share the spoils as well (as opposed to a small time-costed charge for our assistance), adding to the hurt (whilst the rules have now changed, claims-chasing parasites had been taking up to 48% commission out of defrauded investors’ compensation). The sad news is that his total losses are noted at £116,886 but we are pursuing others in the chain for further payments above the FSCS limits which applied at the time.
We are still pressing for yet another arm which is where investors had to create very complicated limited companies and SSAS pensions administered by unregulated Cantwell Grove to part-own hotel rooms, selling ‘dreams’ to unsuspecting and innocent investors.
And the most refreshing news of the week? That ‘Abrdn’ realised how stupid its rebranding had been (almost its Gerald Ratner moment…) and it is again called ‘Aberdeen’. Well done. The shares reacted positively – or was that to the results – still far too cheap in our view!
Investment income
Despite all the trauma and certainly not supported by US technology companies which pay a pittance but as US dividends exceed $650million, that propelled global dividend receipts to a record of $1.7trillion, up 7% in 2024. This is Janus Henderson’s research.
Remember, this is the income from real businesses distributing some of their profits to shareholders who have let them use their money! Our own strategies are throwing-off excellent levels of income – something not impacted by the daily vagaries of capital values. If it’s needed to pay the bills, fine, it will keep repeating month after month but if not, it can be reinvested in the latest best ideas in strategies to bolster future results.
Martin Lewis (MSE) – Money Advice
I commend Martin Lewis’ endeavours to help educate people about money. I don’t agree with some of the approach but much (especially on saving people money on their outgoings) is excellent and presently it has been to ensure people who need to fill gaps in their State Pension record via National Insurance must act immediately before a door closes, one which allows them to grab years back to 2006. Later they will be able to only go back to 2019. He also reminds people about the free credits to which they are entitled.
The maximum ages to qualify are men born after 5/4/51 and women born after 5/4/53. If you are not sure – check!
Defence/attack?
So-called ‘ethical’ investors have till recently avoided armaments’ manufacturers in their strategies but after the demands to see ‘defence’ spending rocket to avert the threats (especially from Russia), many ‘ESG’ managers are experiencing pressure to include them for their protective, defensive qualities. In general, defensive stocks, of which there are not many, have been rocketing in price and many investors have missed-out.
Perhaps of concern however is what is happening in Germany as the edict to protect has taken greater prominence and that is the extra government borrowing, necessary to fund the cost. Government borrowing costs have escalated dramatically there over recent weeks; this means that not only is defence needing funding but when more debt is needed for general purposes (and more especially, the same as we face here) then it has to pay an elevated rate to roll maturing debt too.
Germany has been renowned for its low government borrowing costs but its struggling economy now faces what could be a doubling in that baseline rate and when you owe E2.6trillion, that makes a significant difference to your annual costs.
Good news/bad news
Abrdn Diversified Income & Growth is already in wind-down and has repaid investors considerably already at the net asset value. It has now announced exclusive talks with a third party about the sale of its remaining private assets which otherwise could take longer to realise. The shares rise 5% on the day. All good news!
On the bad news’ front (if that is not a false statement), the lower oil price has negative ramifications for oil and energy stocks. So whilst this means their share prices have fallen (especially if they are not very diversified) we must not forget that they are also a hedge against higher oil prices which invariably impact inflation and costs to companies and individuals. So, a low oil price is good for us all really and the lower value attributed to oil stocks should be offset by better trading in other shares which benefit from that lower cost.
It is too early in the cycle to be able to tell yet but one good thing is that the income yields from dividends on most of these are extremely high so some solace whilst waiting! The bad thing is that consumers won’t benefit from their electricity costs falling as we have stopped using such fossil fuel to generate power.
Stamp Duty
Well done to Felix and Emma for beating the swingeing Stamp Duty increase which will impact the property market. They have decided to move to a small hamlet called Trimstone – just up the road from Helen and I!
Chartered Status
I am delighted to share with you all that the Firm has once again received special recognition from the Chartered Insurance Institute (CII) and retained its status as one of only 562 Chartered Financial Planning firms nationally. The firm first received this award in 2018 and has been successful in retaining it every year since. All firms that hold Chartered status adhere to an ethical code that underpins broader commitments to professional values. These commitments include putting customers’ interests first, investing in ongoing development of their people’s technical skills and knowledge, plus supporting wider initiatives that benefit society as well as the growth of the profession.
As a Company we have always prided ourselves in being thoroughly professional in everything we do and really caring for our customers. For a comparatively small firm in the South West to continue to receive external recognition in this way, is very gratifying and in our fortieth year too! Well done to all the Team for continuing to do the right thing for our clients which in turn enables the Firm’s ongoing success.
My best wishes
Philip J Milton DipFS CFPCM Chartered MCSI FPFS FCIB
Chartered Wealth Manager
Fellow Of The Personal Finance Society, Fellow Of The Chartered Institute Of Bankers
