Some really positive news from the Middle East at last. Whatever you think of him, well done President Trump for being the catalyst – time to move onto Russia in earnest now. Let us hope that this awful conflict will also be over very soon now.
Sadly, economically at home, unemployment rises, wage growth slows, inflation sticks for the twelfth month above the target and sticking at 3.8%, government borrowing is the highest on record save the dire Covid quarter and the IMF downgrades its 2026 growth projections for us (albeit one of the higher in the G7 remarkably) as well as expecting inflation to rise (in big part because of the taxes on what we have to buy and the extra tax and National Insurance costs businesses have to pass-on)… We all wait in concerned trepidation at what nasty surprises the Chancellor has in store for us next month.
Wobbles with China and US relations saw the markets wobble too and we have revisited our views to consider how we are poised come a US market shake-up. We are sanguine but not complacent – primarily we have things which are not reliant upon the big tech stars in the US but instead with ‘value’ at the helm. Interestingly, we are a vanishing breed but when it comes to what we buy and hold, we are not in the same camp as the momentum players so when there is a big upset, those same ‘speculators’ are the ones rushing for the door and in all the same things together and then, who amongst them is doing the buying?
Our boring stuff based on fundamental underlying value, yields and so on, won’t be full of the same holders in there and those who are out for the quick, speculative ride so they won’t be running for the door in the same way. At the end of the day, the price of an asset is based on the volumes of sellers versus buyers. Frequently too, those at the top of this pile are often the ones who have invested on ‘margin’ (at record levels now, unsurprisingly) and borrowed to buy more, so when a set-back arises, it can wipe-out their own money and leave them in debt, thus having to sell other assets to cover their liabilities. It’s great when the party’s continuing but when it stops abruptly, fortunes can be lost for the speculators. It’s not the market in which we trade, clients can be reassured!
Last Sunday at Church the sermon centred upon 2 Chronicles 7v13. Yes, it is a passage full of hope and redemption too but that after having enjoyed an abundance, the sobering emphasis is upon when the locusts appear, not if…
On good news, the price of oil has plummeted, so forecourt costs should fall soon. Natural gas (known as the ‘widow maker’ for the extreme risks to traders of the commodity) has also been cheapening till it bounced this week but sadly successive governments’ policies here mean that it won’t result in a cheapening of mainstream energy and electricity prices for businesses and homes.
In trying to justify the UK’s highest energy prices in the world, on Sunday, Mr Ed Miliband proclaimed yet again that natural gas prices are higher than when Russia invaded Ukraine – has he not been looking at the real prices which actually are a third of those peaks? Oil and related companies’ shares have dropped as a result of Opec+’s savage loosening of barrelage limits. Curiously, decommissioning of rigs has been and is likely to be significant and it is expected there will be an oil shortage at some point, so maybe that points to a shift of investment funds into these self-same energy companies.
To reassure a tad…some more facts for you. We now have amongst the highest Minimum Wage levels in the world. Consumer confidence is a little higher than it was at the trough, so spending is not so deflated even though savings are up (a reflection of a lack of confidence about the future). Apparently younger people are more optimistic than older folk. Our economic growth is so skewed towards the consumer… indeed, car registrations are up 14% since last year and sofas and kitchens are in demand. However, there are dark clouds – as the downgrade from B&M stores revealed and its shares now remarkably are bargain territory after being three and a half times higher in December 2023. Clients don’t own any – yet… and finally, despite coal use being at an all-time peak in 2024, global green power exceeded coal for the first time ever in the first half of 2025, dominated by solar at over 80%.
Global income
As interest rates have been dropping, investors will be pleased to learn that dividends from companies have hit a record $1.4trillion in the first half of 2025, rising 7.7% on the year. However, the UK trailed behind as Japan romped away. Regardless, this is solid news, showing that investors’ incomes have continued to increase as expected and indeed exceeding inflation for investors too.
Crypto trauma
With fears of Chinese tariffs and talk of a big short seller in Bitcoin, all crypto currencies took a battering on 10 October with some colossal declines prior to some stability over the weekend and better news emerged on the same tariffs.
I shall keep repeating – it is simply a gamblers’ paradise yet not even with some real horses behind bets. The concept that these imaginary things are in some way a ‘currency’ was again laid bare, with volatility enough to destabilise the most hardened of gamblers. Indeed, very sadly a crypto pundit who allegedly had made millions, lost £30million of client money and took his own life.
These things have no substance. They rely, simply, on emotional excitement of participants and price rises depend simply on more excitement tomorrow than yesterday. Indeed, I saw one pundit saying Bitcoin isn’t cryptocurrency, it is a maths’ programme and thus valued differently instead – right…
Allegations of inside knowledge in the crypto space of what was going to unravel, news-wise, are flying and again, participants are reminded about the regulatory failings and opacity of transactions and holders – which of course remain prime fuel for criminals.
As I have also said for ages, the ‘stockmarket’ has enough real opportunities for whatever form of investing or trading you want and at the degree of risk or security you may seek, from precious metals to the most elite of government-backed debt, the most boringly safe or the shirt-losing style. There is no need to buy ‘this stuff’ anyway and the risks of such frenetic speculative withdrawal and implosion remain real. It isn’t a ‘currency’. It remains a fairy story yet with some serious risk warnings from these toytown ‘coins’ which even now, have not demonstrated a proven need or purpose – aside from criminal ones.
Rubbish in, rubbish out
Apparently AI is only giving half of the right answers to financial advisory questions. Whether that’s best deposit accounts, cheapest insurance or whatever, be warned! Remember too, there will be comprised interests manipulating the outcomes to their advantage. I have already encountered a technical point with exactly opposite outcomes – an interesting check. As was said on Question Time last week, the skill (and thus knowledge and experience) is to know what question to ask.
AI will be a brilliant tool but as with other technologies of this type, careful handling can also be necessary. I am confident there will still be some great opportunities for ‘value’ investors so we’re ok!
Good news/bad news
Tate and Lyle continued slipping before appearing to bottom. The cheaper it goes, the greater the likelihood it becomes a takeover target and I shouldn’t be surprised if then there was a fight…
Other snippets of good news include Costain on the Sellafield contract award and IP Group where its investment in an obesity drug producer could start to yield income. Halfords’ results were also better than hoped. Regardless, these special fund situations are indeed compellingly attractively priced compared to conservative underlying valuations and of course, if you have money in those, you don’t have it in the over-hyped US assets either… buying such ‘protection’ against an upset is invaluable.
Online shopping
Showing my ignorance here but till I read the articles about what companies like Deliveroo, Just Eat or Uber Eats charge if you order your groceries through them but it almost made me fall off my chair. Which? found the average cost was a whopping quarter or so. Some of the products reviewed were as much as double or more of the in-store prices.
I hasten to add that this is not when using the supermarkets’ own ordering systems but it did make me wonder there if the prices you pay are the same as those in-store as the companies have different pricing structures according to the store type and location etc… all I’d say is, please be very careful.
Just taking
I have always been cynical about the ‘Just Giving’ site. It sounds easy for charities and those raising money for them to create a ‘Just Giving’ page to funnel small donations and GiftAid donations etc. However, whilst yes, it has to be paid-for, what is a fair sum and maybe this space would be best taken by a charity itself? Indeed, maybe a charitable foundation would offer to ‘do this’ as a complimentary service as part of its own charitable outreach? Just Giving has so far taken £100million in dividends for its US owner since it started in 2017 – that’s big business, not philanthropy.
I don’t like the prompt to donors to increase the Just Giving payment by a ‘tip’ as well, the same as I don’t like that in hospitality nor indeed in our museums and other charitable organisations – where yes, by all means encourage donations but the concept of ‘enforcement’ takes ‘nudging’ too far.
Maxims – being a better investor – from the ‘Basil of Barnstaple’
9. Does your adviser stand the tests of time? How is their reputation? Do you perceive they have the highest of integrity and commitment to their clients?
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
