A lot has been said about MMT in recent years. To begin turning all that opinion into an actionable framework, we think there are a handful of principles that should guide investor thinking about MMT.The adoption of MMT by policymakers is not binary; we should think in terms of a spectrum, or ‘thermometer’A structural break … Continue reading A framework for thinking about ‘Modern Monetary Theory’, or ‘MMT’
Author: tothepound
Should I choose ‘income’ or ‘accumulation’ units?
When you invest in a pooled fund, you often have the choice between ‘income’ (‘Inc’) and ‘accumulation’ (‘Acc’) units for a given fund. The two choices are merely two different ways of owning the same fund. Most funds will earn at least some income from the investments they hold: dividends from equities, interest on bonds, … Continue reading Should I choose ‘income’ or ‘accumulation’ units?
Sustainability digest
A handful of snacks for the sustainable investor. Siemens Energy and Siemens Gamesa have teamed up to create an offshore wind turbine that can produce hydrogen via electrolysis. The use of hydrogen fuel is generally considered clean, but the production of hydrogen can be quite an energy-intensive exercise. The production of hydrogen by electrolysis involves … Continue reading Sustainability digest
What are ‘beta’ and ‘alpha’?
If someone tells you a stock went up by 10% last month, therefore clearly ‘smashing it’, what would be your first question back to them? What if they told you their portfolio of stocks overall went up by 10% last month? What would be your response?In both cases, you would need to ask: well, what … Continue reading What are ‘beta’ and ‘alpha’?
What’s the difference between ‘active’ and ‘passive’ funds, and how should I chose between them?
The distinction between ‘active’ and ‘passive’ forms of investment management represent a difference in approach taken by professional fund management companies. Don’t try to characterise your own personal investment approach as being either one, because that doesn’t make sense. This article will help you identify a fund as being either actively or passively managed, explain … Continue reading What’s the difference between ‘active’ and ‘passive’ funds, and how should I chose between them?
Getting started investing: the very first step
Set up an account. That's itIt is not a difficult thing to do. With many providers, you only need £1 to open the account, although many others will ask for £100 or more. It’s like opening a bank account. To choose a provider, just type into Google: “best share-dealing / brokerage / investment platforms U.K.” … Continue reading Getting started investing: the very first step
Cash is much more than a defence
Cash is seen as a safe haven. Somewhere to run to when things get bad. Keeping some of your portfolio in cash as a ‘buffer’ helps you to feel comfortable that when the value of your investments falls, there’s a portion of your portfolio that will be there for you, no matter what.This characterises cash … Continue reading Cash is much more than a defence
Should I choose a fund with a target return or a benchmark?
Funds need to have objectives and constraints so that potential investors can have some confidence about how the fund will be managed and what assets it will contain. Investors also need to be able to hold the fund managers accountable for the performance of the fund. The constraints of the fund ensure that it does … Continue reading Should I choose a fund with a target return or a benchmark?
Leadership, not just board representation
On the topic of female and minority representation on boards, representation is one (important) thing, but what about decision-making capacity? Representation helps with attraction, retention, and development of talent. And it certainly acts as a force against the festering of confirmation bias and of outdated thinking, so there is no doubt that there is value … Continue reading Leadership, not just board representation
Sustainability digest
A handful of snacks for the sustainable investor. Last week in the US, the Democratic party won the two senate run-off elections in Georgia, which were previously undecided back in November. This gives the Democrats control of the Senate, having already won control of the House and Presidency. A ‘Democratic clean sweep’ has previously been … Continue reading Sustainability digest
To the pound 