A Happy New Year. I hope that your celebrations of all Christmas really means was good and joyful and that you have seen-in the New Year with relish! Already the days are opening-out and spring, albeit very cold, is daring to peek through the wintry gloom.
What a nice Christmas present for ‘farmers’ with the increase in the Inheritance Tax threshold. This will protect most now from the problems which otherwise could have arisen on the death of landowners. It comes on the back of spousal transfer as well so now for a couple, that’s up to £5million.
We should be grateful the Government has listened but why ‘now’? Was that NFU report so instrumental after all when it was pretty obvious what the consequences would have been even before the law was changed? Why not put that in last month’s Budget and how is the previously projected cash raise now going to be covered or suddenly does it not matter now?
Crucially, it is all agricultural or qualifying business assets too, as small business owners were similarly caught. If the thresholds are exceeded, businesses will suffer half the normal rate on the extra. We are also told that so far 105 schools have closed since the VAT addition to educational fees started and potentially 25,000 pupils now back in the State sector and all needing to be State funded. Were these things more ‘political idylls’ rather than cash-raising measures? That’s a rhetorical question incidentally.
We must not devalue the fact that for farmers and small businesses the Government has listened and acted but why did it take so long and why did it introduce what was such a spiteful ‘tax of envy’ in the first place? As for Inheritance Tax… it is now still worth the wealthy buying a Business or a Farm in their dotage and surviving two years and then it can be passed-on free of Inheritance Tax, if they are willing to deal with the hassles involved! Remember too, a very valuable home in the middle of a few acres does not qualify as a ‘farm’ for 100% relief. However, asset intensive businesses may have merits (eg an antique dealing firm say) and remember, it can be partnerships and other qualifying business ownership types too of course, if say family is involved…!
And then, on 1 January the FTSE100 broached 10,000 for the first time ever! Congratulations! Immediately afterwards it slipped back below of course… Before being carried-away by worries about ‘excessive valuations’ however, remember that on 31/12/99 at the peak of the Dotcom bubble, it hit 6,970 so that’s only 43% more over more than a quarter century. Inflation (see https://www.bankofengland.co.uk/monetary-policy/inflation/inflation-calculator ) has risen 93.3%.
Far more valid is the gain since 31 March 2020 at the depths of Covid – the gain there has been 76% versus inflation at 28%. The Chancellor embarrassed herself then by claiming credit for the fantastic response to government economic actions… forgetting that three-quarters of the FTSE100’s earnings hail from overseas. The more UK-reflective FTSE250 is still well below its previous peak.
Before also saying ‘that’s a rubbish return’, remember the income. Presently, if you buy the more representative FTSE Allshare Index, the income yield is 3.21% and so over all these years, especially for most of them when the income yield was far higher, the income taken and reinvested has resulted in amongst the best returns for investors in any asset classes and there are reasons why that is likely to continue, when taking sensible investment timeframes, because of what shares represent.
Yes, other markets (eg the US) may have done even better but that is not the discussion point here nor a reason to buy the US (especially now)! Over one year, the FTSE100 grew by 21.5% in capital terms alone, income and costs ignored – not bad all the same and beating all the US major indices – including techs. You will recall, we have been saying how undervalued the UK was, especially against the US and it remains so. Remember too, the US yields effectively ‘zilch’ comparative income too.
And then what can we say about Maduro’s arrest? I appreciate he invited President Trump to ‘come and get him’ and ‘don’t be late’ (we could say he was…) but we pray for a successful outcome for the people of Venezuela and that includes the quarter of the population which has fled since he took over, 13 years ago (and from leftwing Chavez before him who wasn’t any better). Two and a half hours for the extraction was amazing but not trumping the British deposing of Zanzibar’s self-appointed Sultan in 1896 (violating the earlier treaty) which took just 38 minutes…
Unregulated holiday park investment schemes
At last the Regulator is ‘warning’ investors to beware of many scams in this industry (aren’t they all…?).
FCA warns about unregulated holiday park investment schemes
We have been flagging the situation for many years now but no one seems to have cared enough to have taken any action. After all, the Regulator can act on ‘unregulated collective investment schemes’ which these do constitute being on collective grounds etc. We have seen some awful cases and yet, sales of holiday lodges and luxury vans continue apace, being sold as money-spinning ventures or even as ‘homes’ despite restricted residency and so it goes on and then, the protections when they all go wrong are negligible.
It’s not so bad when the cost is a few tens of thousands but when people borrow significant sums, even against their own homes, to buy one for high six-figure sums, the problems start. Indeed, just before Christmas yet another large park here has just been sold and what will happen to the rights of ‘owners’ there too. Please avoid – it is not a good ‘investment’ buying one of these things.
Crypto currency, Bitcoin et al – 11%pa income
I have had to laugh at the blind emotive enthusiasm of a small contingent of (especially) Bitcoin pushers. On Social Media everywhere, these individuals are saying how fantastic the opportunity for the imaginary investment is at these levels and any pullback in the price represents yet another greatest bargain buying chance and how it will be participants’ route to untold wealth and financial happiness.
However, my biggest laugh was when HMRC reacted to the global CARF (Crypto Assets’ Reporting Framework) by noting that UK taxpayers will have their cryptocurrency accounts from crypto providers made available so gamers are paying the right tax if they have made gains.
One of the core attributes of these things is that they are promoted on the basis of being beyond the reach of governments… and as we know, the underworld loves using ‘them’ for its nefarious and untraceable activities from cybercrime to terrorism and more traditional organised crime, as well as endeavours to circumvent money laundering rules, provisions which otherwise affect all of us and designed to stamp down on such things as tax evasion to illicit transactions and terrorism.
Finally, much reported Michael Saylor’s Bitcoin company ‘Strategy’ is now offering 11%pa dividend income to investors – really – are people quite that gullible? Thank goodness it is not regulated over here… but let’s hope the FCA acts soon should adverts promoting this start to manifest themselves in the retail space – they are already referenced on Social Media.
Oil prices
In 2025 oil prices recorded the biggest annual fall since Covid sapped demand in 2020. Hopes of a Ukraine:Russia peace hit the price even more and seeing a fall of nearly 20% for the year. Brent Crude ended the year at $60.85 a barrel and poorer quality West Texas Crude $57.42. Economic slowdown has meant the world is awash with oil again and green initiatives are hitting demand but the temptation for developing markets will be that it is a cheaper fuel source for creating energy to grow their economies and help their citizens.
Here at home, despite very weak natural gas prices, UK households are seeing increased gas and electricity bills regardless. Cynically, economies which use cheaper fossil fuels (like China and India especially but much of the developing world) will do better and produce cheaper goods which we shall then be buying – instead of creating our own as it is too dear to do so.
Now what will happen? Immediately after Maduro’s capture, prices jumped but since, the market has realised that having the country with the World’s largest oil reserves coming back on stream ‘properly’ might have devastating effects for global prices so things are ‘flat’. Of course, companies which help in the infrastructure spend to achieve that again might be useful investments – and it might shorten the Ukraine war as Russia relies upon its embargoed oil exports to pay for it. Meantime, it is another support for gold and silver – not that it needed any as both are too dear now regardless.
Good news/bad news
Well just before Christmas, Videndum shocked the market by announcing the terms of an anticipated deleveraging which saw the share price more than halve. Whilst this will raise more capital and save it, significant equity value has been wiped from the stock, a recent addition albeit still a small exposure for us. Sadly, this can happen and hence the need, at all times, for optimum diversity.
However, on the brighter side, a good order from an existing customer has seen buying interest in Tekmar, the Aim-listed offshore energy facilitator and the shares hit almost treble last April’s nadir so it can work in reverse!
Natural causes – Black Death
On this day in 1709, Europe suffered its coldest winter in 500 years and likely related to the earlier eruption of Mt Fuji. I was fascinated by an FT article Did the Black Death flow from a volcanic eruption? on the major Black Death plague from 1347 which might suggest that it started as a consequence of a significant global natural event, a gigantic volcanic eruption which created the conditions forcing mass migration and generating significant impoverishment and starvation so people were more likely to be unable to repel disease too.
This has been substantiated by dendrochronological studies and review of chronicles from the time. Going further back, the same influences could have caused the C6th Justinianic plague with multiple C6th eruptions and even an Icelandic eruption creating the famine at the advent of the French Revolution (more cake dear?)
On this cheery note it might suggest that the eco-doomsters demanding we do even more to stop the consumption of fossil fuels etc, can do nothing about a possibly overdue eruption which would place humans’ endeavours to hold back a natural tide, Knut-style into the realms of futility, whilst destroying global economies in their vain and potentially self-serving endeavours.
Indeed, whilst being reminded of the antiseptic qualities of chlorophyll (created by photosynthesis) and how the use of dried moss during World War I was used to bolster wound dressing supplies (still used in some applications!) when cotton was scarce, we don’t seem to have had any recent updates on how the Earth’s regreening is going.
In 2016, Nasa published a report noting that the Planet was between 25-50% greener than the previous 35 years as a result of carbon dioxide increases in the atmosphere:- Carbon Dioxide Fertilization Greening Earth, Study Finds
This has increased CO2 consumption of course but also exploded food production and cheapened its baseline cost. Some cynics are saying that this food’s calorific quality isn’t as good but the global population growth seems to be defying that!
Of course none of this should suggest we pillage and waste our invaluable natural resources and we do what we can to use financially sustainable renewables, etc of course. But we do need to keep our feet more firmly on the ground and remember as we enter 2026, that Nature, God, is in final control, not humankind with its elevated egotism and self-importance.
On an individual plane, be positive and influence that which we can and not enter the doom-loop of eternal pessimism about the ‘future’. Anyway, these points are only said for interest and are neither opinion nor from prejudice!
Life’s a pantomime – hot cakes!
Just to remind that Croyde’s Pantomime is the last two weekends in January this year. Helen will be word perfect but me… ahem! Don’t delay buying your tickets – they and more details are available by CLICKING HERE
Testimonials
Thank you again for some lovely and humbling testimonials from some long-standing clients like BR’s – ‘I wish to thank you and your professional team, once again, for looking after my finances so well that I am in the fortunate position to do all the travelling that I do, and have the lifestyle that I so enjoy’.
Plus LM: ‘I wish to pass on my thanks to you and your team once again for taking good care of my finances, for which I am most grateful’.
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
