The paradigm shift to sustainable investing has led to increasing recognition that investment objectives should be dual-based: a traditional return/risk objective combined with a sustainability objective. Current consensus is that the two objectives are more likely to trade off in risk space than in return space. That consensus – that sustainable investing won’t cost asset … Continue reading Why sustainable investing is not just a long term exercise →

Diversification basically means not putting all your eggs into one basket. But in investment, a ‘basket’ is defined in multiple different ways, so there are different dimensions across which you can diversify:Diversification across asset classes (e.g. equities vs bonds vs commodities)Diversification across countries or regionsDiversification across economic sectors (e.g. technology vs healthcare vs energy)Diversification across … Continue reading An introduction to diversification →

Investment has historically been about return (making money) and risk (reducing the chance of not meeting your goals). Typically, the most efficient - or desirable - portfolio of investments has been the one that maximises return for a given level of risk or minimises risk for a given level of return. Defining return is simple; … Continue reading The dual objective of sustainable investing →

Amongst other reasons noted in this article, ‘dollar cost averaging’ is one reason why regular investing can be a powerful method for building wealth. On the face of it, after you invest in something, you want the value of it to go up. If it does, your wealth goes up. If the value of it … Continue reading Regular investing: dollar cost averaging →

When you invest your money, as opposed to keeping your savings in a cash bank account, you will need a broker to do the operational stuff for you. Once you’re set up with a broker, you need to decide how much control you want to have over investment decision-making in your portfolio. There are three … Continue reading Should you pick your own investments or invest in ‘collective’ investment pools? →

In this post I lay out the main categories of investment, which are grouped together into ‘asset classes’. I don’t make any judgements about good or bad, right or wrong, hot or not. I simply describe what the asset classes are, with examples and links to other posts which provide more details. Equities, or stocksWhen … Continue reading Major asset classes to know about →

Cash in the bank is generally considered to be ‘risk free’. And for amounts below £85,000 in a single U.K. account (or multiple accounts owned by the same parent bank), we agree with the notion that cash carries very little investment risk. However, aside from the fact that balances over £85,000 are not covered by … Continue reading Investing vs saving as cash →

Investment industry folks like to talk about risk in terms of ‘volatility’, which essentially means the variability of the value of an investment through time. They may talk about ‘drawdowns’ or ‘value at risk’, which are a bit closer to what risk really means. But these measures are merely convenient proxies for genuine risk. In … Continue reading What does risk mean to you? →

The equity market rally that began from the bottom of the crisis back in late March has been driven by plentiful liquidity from central banks: rate cuts, quantitative easing (QE), support for credit markets and overall highly accommodative forward guidance. Under that environment, gold was positively correlated with equities because they both benefit from ample … Continue reading Why has the gold price been falling since August? →