Contact us: 01799 543222

Can Investing in one Company make you a Millionaire?

Archive for the ‘Commentary’ Category

Can Investing in one Company make you a Millionaire?

Wednesday, February 3rd, 2021

We all know that investments can rise and fall in value. That a prudent investor spreads their risk across different sectors and across different markets. And we all remember our very first financial adviser, our Grandma, who told us not to put all our eggs in one basket. 

But between Christmas and New Year there was a story on the BBC about the soaring share price of electric car maker Tesla which has created what it described as an ‘army of millionaires’ – the so-called ‘Teslanaires.’ 

Shares in Elon Musk’s company soared more than 700% in 2020, making Tesla the world’s most valuable car company, Elon Musk the world’s richest man (overtaking Jeff Bezos of Amazon) and making many investors in the company millionaires. 

But as the article rightly points out, it has been a bumpy road for Tesla. In May of last year Elon Musk wiped $14bn (£10.2bn) off the company’s value when he carelessly tweeted that, in his opinion, the Tesla share price was too high. 

We all need to remember that for every Tesla there is a Sirius. Sirius Minerals was a mining company, granted the right to mine potash in the North Yorkshire Moors near Whitby. Many local investors, swayed by stories of the potential returns, invested heavily, putting their life savings and pension lump sums into the company. But the shares steadily dropped, the company was eventually taken over with the shares trading at 5.5p and the local investors were left facing heavy losses. 

Yes, shares like Apple, Nike and Starbucks may have produced spectacular returns for investors on their way to becoming household names, but many, many companies have gone in the opposite direction. April 2019 saw Debenhams go into administration and what could have been safer than the British high street? Surely people will always need to shop, they will always need new clothes… But that was before the pandemic when 2020 was the worst year for high street job losses and store closures in 25 years. 

There will always be winners and losers in investing and the good news stories, the ‘Teslanaires,’ will always receive plenty of publicity. After all, ‘Investor takes sensible long term decision with their financial adviser’ is hardly a headline story. 

But for our clients, it is the best course of action and always will be. A carefully constructed portfolio, in line with your financial planning goals and consistently monitored by your financial adviser: it may not make the headlines, but it will certainly let you sleep at night.

Will we ever go back to the office full time?

Wednesday, February 3rd, 2021

For many people, the pattern of working life was well-established. They got up on a Monday morning, ate some breakfast and travelled into work. They exchanged news around the proverbial water-cooler, sat in meetings and came home again in the evening. Rinse and repeat.

Then, on March 23rd last year, the UK went into lockdown. Suddenly, millions were working from home. 

Commentators were quick to proclaim ‘the end of the office.’ Studies quickly emerged showing that people were actually more productive working from home. No-one missed the daily commute and lunch eaten in the garden in April and May was a lot more fun than trekking to the nearest deli.

Even more importantly, Millennials and Generation Z, the demographic cohorts that were making up more and more of the workforce, were getting what they wanted;  flexible working and a much-improved work/life balance. 

Company after company announced that working from home would continue indefinitely. Finance directors looked at income and expenditure statements and wondered if they really needed that expensive building with all the desks and chairs and the giant jar of coffee every fortnight.

We’re now in lockdown 3. For those who have only been part of the workforce for a few years, a significant portion of their working life may have been spent working from home. And yet it does appear that the proclamation ‘the death of the office’ may have been a bit premature. Even introverts are reported to be missing the chat around the water-cooler. 

Many people are finding that they simply cannot work from home effectively in the long-term, as they juggle the competing demands of work, childcare and a relationship. 

There are also increasing worries that working from home is making us less creative.  

Steve Jobs famously said that offices were about creativity and collaboration: that much of Apple’s success came from chance meetings in the office. As many of us have noticed, chance meetings do not happen on Zoom. 

So as the vaccine is rolled-out, many people are missing the office, but don’t bet against its disappearance just yet…

January Market Commentary

Wednesday, January 6th, 2021


2020 has been a year like no other, and yet – as we will see below – the majority of world stock markets have enjoyed a good year. It was also a good year for Joe Biden, who defeated Donald Trump in November’s Presidential election, and for supporters of Brexit. 

Finally, some 4½ years after the Referendum a deal was agreed with the European Union, and the UK’s transition period ended on December 31st. 

As always, let us look at all the detail. We have also added an extra section this month, looking at the performance of the major world stock markets over the whole of 2020. 


The main news in the UK was, of course, the eventual deal with the European Union. We have covered this in our final Brexit section below. 

Away from the Brexit negotiations, the UK went into stricter new tiers at the beginning of the month just as the Pfizer vaccine was approved for use. But, with infections continuing to rise, there was little doubt that we were heading for even harsher lockdown measures. 

Quite what this will do to the beleaguered UK high street is anyone’s guess. Lockdown measures were reported to have ‘battered’ footfall in the run-up to Christmas, and December saw Bonmarché collapse into administration while Primark reported that the pandemic had wiped £430m off its balance sheet. 

Figures for Boxing Day suggested that footfall on one of the busiest shopping days of the year was down 60%, and 2020 was reported to be the worst year for retail job losses for 25 years. With the furlough scheme gradually coming to an end the news on job losses can only get worse. 

In the wider economy the UK’s unemployment rate rose to 4.8% in the three months to September, up from 4.5% in the previous month, with the Office for National Statistics reporting a record 314,000 redundancies in the period. 

Growth for the third quarter was revised upwards to 16%, but worryingly growth almost stalled in October, with the ONS reporting that the economy grew by just 0.4% in the month. Government borrowing soared in November to £31.6bn – the highest November figure ever recorded. Inflation fell to just 0.3% in November as lower prices for food and clothing drove the figure down from 0.7% in the previous month. 

Was there any good news? Yes – there was plenty of optimism amid the gloom as the Pfizer vaccine started to be rolled out. Three-quarters of small firms said that they were likely to hire staff next year and City AM reported a Lloyds Bank survey as saying that business confidence was at a nine-month high. Consumer confidence also jumped sharply on news of the vaccine. 

So much for surveys and ‘confidence.’ Let’s end the year with some tangible good news. Start-up company Britishvolt announced that it had chosen Blyth in the North East as the site of the UK’s first ever battery ‘gigaplant.’ The project will cost £2.7bn and will employ 3,000 people at the plant, which will produce lithium ion batteries for electric vehicles. It is expected that a further 5,000 jobs will be created in the supply chain. 

Although – as we report below – it had a poor year, the FTSE-100 index of leading shares did reasonably well in December, ending the month up 3% at 6,461. The pound was up 2% against the dollar at $1.3672 and was up by 3% for the year as a whole. 

Brexit & Trade 

There were plenty of newspaper headlines but – as we had always expected – a deal between the UK and the EU was agreed and the EU/UK Trade and Cooperation Agreement was passed by 521 votes to 73 in the Commons. It duly received Royal Assent and became law, with the UK’s transition period with the EU ending at 11pm on December 31st. 

There will, of course, be teething problems. Whether you think the deal is a good thing or a bad thing almost certainly depends on how you voted in the Referendum. For all the sound and fury since then, we doubt that many people have changed their minds. 

The UK signed a free trade deal with Turkey at the end of the month, and there will unquestionably be more deals signed this year. 

…But it seems appropriate to leave the final word on Brexit to Boris Johnson, the man who will go down in history as the Prime Minister who took the UK out of the European Union. Here’s what the PM had to say: 

‘People used to insist that you couldn’t have both: you couldn’t have unfettered free trade with the EU, we were assured, without conforming to EU laws. You couldn’t have your cake and eat it. Maybe it would be unduly provocative to say this is a cake-ist treaty; but it is certainly from the patisserie department.’

With that insightful – and calorie-laden – analysis, and after more than 50 appearances, it is time to say goodbye to the Brexit section of the bulletin. 


Like the UK, Europe spent much of December introducing various new degrees of lockdown. Italy announced a Christmas and New Year lockdown – and will presumably have a wary eye on the Chinese New Year on February 12th, which did so much to spread the virus in the North of the country last year. Germany introduced a raft of new restrictions and Spain said that it would keep a register of those people who refused to be vaccinated against Covid-19. 

Tesla’s plans for a new ‘gigafactory’ in Germany have been beset by objections from environmentalists. Preparations once again came to a halt in December, as campaigners won a court injunction, arguing that the site will endanger local species of snakes and lizards. 

More optimistically, Ryanair has agreed to buy a further 75 new Boeing 737 aircraft, bringing the total number of jets it has ordered to 210 – a major vote of confidence in the future of the aviation and holiday industries. The total value of the deal is $22bn (£16bn). 

It was also reported that the EU was on the brink of a ‘major investment deal’ with China, which will give EU firms better access to the Chinese market. Talks on the deal started in 2014 – which really illustrates how quickly the Brexit negotiations were concluded. 

December was a reasonably good month for the two major European markets we cover in the bulletin. The German DAX index rose 3% to close the month at 13,719 while the French stock market was up just 1% at 5,551. 


Two weeks from writing this, the US will have a new President: Joe Biden will be inaugurated as the 46th President on January 20th, beginning a four year term with Kamala Harris as his Vice-President. 

So far his administration includes many of the stalwarts of the Obama and Clinton years, with Biden naming Janet Yellen – former Chair of the Federal Reserve – as his new Treasury Secretary. 

The big challenge for the new team will be getting America back to work. The economy added 245,000 jobs in November, below many economists’ expectations. The jobless rate did fall from 6.9% to 6.7%, but it was believed to be because many people stopped looking for work over the holiday season. Worryingly, some key virus relief programmes, including some unemployment benefits, are now due to expire. 

In company news Airbnb made its debut on the stock market and saw its value exceed $100bn (£73bn) while Uber announced it was selling its self-driving cars and flying taxi divisions for the rather novel business idea of ‘concentrating on profits.’ 

The month ended with a deal finally being reached to approve a $900bn (£657bn) Covid stimulus package – and with continuing warnings of a cyber-attack on the US government. The New York Stock Exchange announced that it would de-list three Chinese telecoms giants due to supposed links to the Chinese military. 

With or without the Chinese companies Wall Street enjoyed a good month. The Dow Jones index closed above 30,000 – ending the month up 3% at 30,606. The more broadly-based S&P500 index was up 4% at 3,756. 

Far East 

December started with a report that China was escalating its ‘tit-for-tat’ trade war with the US, introducing tough new laws restricting the export of products – notably military technologies – that might harm China’s national security. 

As we have seen above, the US took action against three Chinese telecoms companies at the end of the month. From January 20th though, China will have a new administration to deal with: US intelligence officers are already saying that Chinese agents are stepping up their attempts to influence ‘Team Biden.’ 

Continuing the cloak and dagger theme, the Chinese authorities maintained their crackdown on fintech companies and – as we write on the morning of January 4th – there are concerns over the whereabouts of Jack Ma, billionaire co-founder of the Alibaba Group, who hasn’t been seen in public since he criticised the regime back in October. 

Events were rather more peaceful across the China Sea, with the Japanese government announcing a further Covid stimulus for the economy. The additional spending – amounting to 73.6tn yen (£530bn) will include subsidies for green investment and spending on digitalisation and is aimed at pulling the country out of its Covid-induced economic slump. 

There was certainly no slump on the region’s stock markets in December. China’s Shanghai Composite index rose 2% to 3,473: the Hong Kong market was up 3% to 27,231 and Japan’s Nikkei Dow rose 4% to 27,444. The South Korean market spoiled our neat arithmetic progression by having an excellent month, rising 11% to close December at 2,873. 

Emerging Markets 

There was good news for India in the month, with an article in City AM stating that ‘India will be the big winner of the new world order.’ The writer suggested that the more China pressures India – witness the recent skirmishes in the  disputed border region – the more India will ally itself with the US, and reap the consequent economic benefits. 

We shall see… In the short term December was a good month for the Indian stock market, which rose 8% to close at 47,751. The Brazilian index went one point better, rising 9% to 119,017 while the Russian market was up 6% to 3,289. 

World Stock Markets in 2020 

No doubt if someone had said to you on January 1st ‘there’ll be a global pandemic and the world will still be battling it on December 31st’ you may have been confident of all the world’s stock markets falling. 

That is very far from the case: with the world’s central banks pumping money into global economies some markets have had very good years. Leading the way is the South Korean market, which is up 31% this year. Elsewhere in the Far East Japan rose by 16% and China’s Shanghai Composite index rose 14%: the only major market in the region to fall was Hong Kong, which dropped by 3%. 

In Europe the German DAX index rose by 4% in 2020, but the French market was down 7%. Sadly the UK’s FTSE-100 index was down by 14% – the worst performance of all the markets we cover in the bulletin, and the worst year for the FTSE since the financial crisis. 

In the US the Dow Jones index was up 7%, while the S&P500 index rose by 16%. We don’t report on it in the bulletin, but the Nasdaq index – the US’ index of tech stocks – was up by an eye-watering 42% in 2020. 

India led the way in our Emerging Markets section, with the stock market up by 16% in the year: the Russian market rose 8% and the Brazilian index was up by 3%. 

And Finally…

2020 – despite all the serious headlines – was a good year for the ‘And finally’ section of the bulletin. December certainly lived up to the year’s high standards, and began with Australian teenager Jessica Collins. Jess grew up on a mango farm in Queensland and – frustrated by how many mangoes go to waste – turned 1,400 unwanted fruits into a dress for a school project. 

Clearly Jess won’t have any time for video games, which is a shame as Kentucky Fried Chicken have launched a games console which will also warm up your chicken. “The chicken chamber will keep the contents hot, ready to eat during intense gaming sessions,” said KFC. And no, it is not April 1st. 

…But will Earth survive until April 1st? It appears that our planet has failed the interview and will not be admitted to the Galactic Federation. 

According to professor and retired Israeli general Haim Eshed – and reports in several papers – there is a Galactic Federation of alien species among the stars. But they don’t want us humans to be part of their club , as we’re ‘not ready.’ The aliens won’t make this known publicly as they are worried that we’ll ‘freak out.’ They have, however, contacted President Trump who may be on the verge of revealing their existence. 

We’d better wish you a Happy New Year while we still can. With the aliens’ permission, we will be back at the start of February: in the meantime our very best wishes go to all our clients for a happy, healthy and prosperous 2021.

A merry Christmas to all

Wednesday, December 16th, 2020

Christmas is fast approaching! Although we may be eating, drinking and being merry in a slightly different manner to the usual, we shall be merry nonetheless. As we come to the end of a challenging year full of unexpected experiences, perhaps we can take some positive lessons forward with us into 2021. In the spirit of the season, we can remember to be thankful for what we have, the people in our lives and the freedoms we are able to enjoy. 

Let’s also look forward to the opportunities that lay ahead. A new year brings with it excitement and possibility and after a year like the one we’ve had, even the events we once would have considered as the ‘everyday’ can be a cause for celebration.

But for now, December is the month of finales and new beginnings. In 1901 it was the month in which the Nobel peace prize was introduced and in 1955 it saw the birth of the hovercraft. Who knows what great things it could hold in 2020.

As always, if you have any concerns or questions we’re here and happy to help, so don’t hesitate to get in touch.

Wishing a very merry Christmas and a happy new year to you and yours.

Kind regards,

Richard, Mike and the team

December Market Commentary

Wednesday, December 9th, 2020


Is the end of November a time to celebrate? All the stock markets we cover in the Bulletin made significant gains in the month; the UK’s second national lockdown ends this week and, as we write, Christmas is a little over three weeks away. 

Or is the glass half-empty? We’re going to come out of lockdown into far harsher tiers than we’ve previously experienced. There are already dark mutterings of the tiers extending well into the New Year and, for many families, Christmas is going to be very different this year. 

A lot happened in November. It brought us the Chancellor’s Spending Review and perhaps the clearest indication yet of the impact the pandemic has had on the national high street, as the Arcadia group slid inexorably towards collapse and the potential loss of 13,000 jobs. 

November also, of course, brought us the US Presidential Election and – despite the threat of endless lawsuits – the almost certain inauguration of Democrat Joe Biden on Wednesday January 20th. But could Vladimir Putin be on his way out as Joe Biden comes in? There were plenty of rumours circulating about the Russian President’s health, with suggestions that he might even stand down in January. 

Meanwhile the Bulletin’s longest running saga rumbled on. With just a month to go to the end of the transition period there is still no agreement between the UK and the EU, with fishing proving to be the latest stumbling block. Did anyone ever doubt that the negotiations would go right down to the wire? No, neither did we.

Most significantly though, November brought hopes of an anti-Covid vaccine in many countries, with claims that the vaccine developed in the UK is 90% effective. If you’re looking for a reason why stock markets did so well in November, look no further. 

As always, let’s delve into the details. 


The big news story of the month in the UK was the Chancellor’s Spending Review. Rishi Sunak had long since cancelled the Autumn Budget because of the economic uncertainty, instead presenting a 30 minute outline of the Government’s spending plans for next year. 

Despite the continuing costs of the pandemic – and despite Government borrowing for October being the highest on record – he outlined some lavish commitments, including what he described as a £100bn “once in a generation” investment in the nation’s infrastructure, including a £15bn commitment to research and development.

This came despite a forecast of Government borrowing reaching £394bn this year, with the Office for Budget Responsibility predicting that the economy will contract by 11.3%. Unemployment is forecast to reach 7.5% next year, with 2.6m people out of work. 

The Chancellor – as Chancellors must – remained optimistic in his speech. But November brought the usual mixture of good and bad news. 

Having mentioned Arcadia in the introduction, which we wrote on November 30th, this morning brings news that last-ditch rescue talks have failed, and Debenhams is set to close with the potential loss of 12,000 jobs. Coming on top of the earlier news about the collapse of Peacocks and Jaeger – which has put 4,700 jobs at risk – this all adds up to a devastating month for traditional UK retail. Quite what these closures will mean to some town centres hardly bears thinking about. 

2020 has also been a very bad year for the UK car industry. Figures released for October showed that production was down again, with production in the month just 20% of that recorded in October 2019. November also brought the news that the Government is bringing forward its ban on the sale of new diesel and petrol cars, which will now be effective from 2030. 

Figures from the Office for National Statistics showed that the UK economy had grown by 15.5% in the third quarter. On the face of it that is good news, but there are worries that the rate of growth is slowing down. The UK economy was 9.7% lower in the third quarter of 2020 than in the same quarter in 2019, and some commentators fear that it could shrink again in the fourth quarter. The ONS also revealed that Government borrowing had soared in October, reaching £22.3bn for the month, the highest October figure since records began in 1993. 

Whether you consider this next item to be good news will depend on where you are on the housing ladder. UK house prices grew at an annual rate of 6.5% in November, the fastest rate since January 2015 as the stamp duty holiday continued to boost the market. 

Despite the overall gloom – especially in the retail sector – the FTSE-100 index of leading shares had a good month. As we have mentioned in the introduction, the reason was simple: hopes of an effective vaccine. November delivered news of the vaccine developed by AstraZeneca and Oxford University, with claims that it could prevent up to 90% of people from becoming ill. 

Boosted by this news the FTSE had one of the best months in its history: having started the month at 5,577 the FTSE ended November up 12% at 6,266. The pound was up 3% against the dollar and ended November trading at $1.3352. 

Brexit and Trade 

The UK’s Referendum on leaving the EU was held on 23rd June 2016, with the UK ultimately leaving the European Union on January 31st this year. Ten months later – and nearly 4½ years after the Referendum – the negotiations rumble on. The transition period – the time agreed in order to reach a trade deal – ends on December 31st, less than a month from now. 

Effectively, it is much less than a month, given the Christmas holiday period and the need to get any agreement ratified by all the EU member states. 

In November the Governor of the Bank of England said that the long term effects of a ‘no deal’ Brexit would prove more damaging to the economy than the pandemic. He may or may not be right: what is undeniable is that, as we write, there are still a lot of points of disagreement, not the least of which is fishing rights. 

The UK apparently labelled the EU’s latest offer on fishing rights ‘derisory’ with Michel Barnier reportedly telling EU ambassadors he had offered a 15% to 18% reduction in the bloc’s fishing rights in British waters. 

With Christmas and Covid, could there be a chance that an extension to the transition period will be agreed? You wouldn’t bet against it. Meanwhile, with very little negotiation, the UK signed a rollover trade deal with Canada. 


It looks as though EU leaders might be negotiating with Poland and Hungary as well…

Back in July EU states had agreed a €1.1tn (£980bn) budget for 2021-2027 and a €750bn (£671bn) Covid recovery fund. Now Hungary and Poland have blocked approval of that budget, vetoing it at a meeting in Brussels. 

The EU is already investigating both countries for supposedly violating the ‘democratic principles enshrined in the EU’s founding treaty.’ Violating that ‘rule of law’ could cost both countries billions of euros in EU funding, so it is hard not to see this as a tit-for-tat retaliation as tensions between Brussels and some of the former members of the Soviet bloc increase. 

In happier news many countries in Europe – including France, Germany and Spain – have eased Covid restrictions in the run-up to Christmas, although restrictions on large scale Christmas and New Year gatherings remain in place. 

From happier news to much happier news. Like all the markets we cover in the Bulletin the German and French stock markets performed strongly in November. Germany’s DAX index rose 15% to close the month at 13,291 while the French stock market did even better, closing up 20% at 5,519.


It seems a long time ago now but November started with the US Presidential Election. The actual poll has almost been forgotten in the welter of claims and counter-claims that have followed it, and the debate on whether the 45th President will formally concede to the man who will be the 46th. 

According to the website RealClearPolitics Joe Biden now has 306 votes in the Electoral College to Donald Trump’s 232, having captured 51.1% of the popular vote. The conspiracy theories about electoral fraud will remain, but it will be Biden who will be inaugurated on January 20th. 

If the likely members of his Cabinet are any guide, then he will pursue policies very similar to the Clinton and Obama administrations: this morning brought the news that former Chair of the Federal Reserve Janet Yellen will be his Treasury Secretary. 

We have mentioned the Spending Review above and Rishi Sunak’s commitment to a £15bn programme of research and development. To put that into perspective, Apple is reported to have spent £18.75bn (£14bn) on R&D in its 2020 fiscal year. Then again, the recent rise in the price of Apple shares did make it worth more than the combined value of all the companies in the FTSE-100 index. 

There is no doubt that the pandemic has been good to the FAANGs: Facebook, Apple, Amazon, Netflix and Google who, between them, account for almost 15% of the value of the S&P500 index. 

We may soon need to add a T to that acronym. November’s rise in the share price of Tesla meant that Elon Musk overtook Bill Gates to become the 2nd richest man in the world – behind, of course, Amazon’s Jeff Bezos. 

Unsurprisingly November was a good month for the stock indices in the US. The Dow Jones index broke through the 30,000 barrier at one point, closing at an all-time high of 30,046. By the end of the month it had slipped back to 29,639 for a gain of 12% in the month. The S&P 500 index was up 11% to 3,622. 

Far East 

November was a bad month for Chinese fintech giant Ant Group, as the Chinese authorities pulled the plug on its planned stock market flotation, which would have raised over $34bn (£25.6bn) and been the world’s biggest ever stock market debut. There are increasing signs that the authorities in Beijing are looking to stamp down on what they see as the excessive power of the country’s internet giants.

The big news in the Far East was the signing of the Regional Comprehensive Economic Partnership (RCEP) which saw 15 countries – including Australia and New Zealand – form the world’s largest trading bloc, covering nearly a third of the global economy. 

Some commentators see the RCEP as an extension of China’s influence in the region, but speaking a few days later at the Asia-Pacific Economic Cooperation forum, Chinese leader Xi Jinping was at pains to stress that China would open up its ‘super-sized’ economy to more “high quality goods and services.” 

…Not, though, to Australian wine. As trade tensions between the two countries continued, China slapped duties ranging from 107% to 212% on Australian wine imports, citing ‘anti-dumping’ concerns. Perhaps McGuigans might like to dump their wines in the UK instead…

You suspect that trade tension between China and the UK may also increase, as the UK Government brought forward its ban on using Huawei equipment in the country’s 5G infrastructure. 

What of the stock markets? China’s Shanghai Composite index rose 5% in the month to end November at 3,392. The best performance in the region came in Japan, where the Nikkei Dow rose 15% to 26,434. The South Korean index was up 14% to 2,591 while the Hong Kong market rose 9% to 26,341. 

Emerging Markets 

A topic that has been discussed, and relatively recently, is that of Russian President Vladimir Putin cementing his hold on power in the country and paving the way to becoming ‘President for life.’ Now it appears that may not be the case: November saw rumours circulate about Putin’s health, with suggestions that he might step down in January. 

The Kremlin has denied claims that Putin is to quit, and that he might be suffering from Parkinson’s Disease. State officials say that the President is in ‘excellent’ health, while the rumours insist his family have urged him to stand down in the New Year. We won’t have to wait long to find out…

The Russian stock market was far more influenced by claims about the effectiveness of the country’s new anti-Covid vaccine, the splendidly named Sputnik V, and was up 15% in November to close the month at 3,108. The Brazilian market did even better, rising 16% to 108,893 while the Indian stock market rose 11% to 44,150.

And finally 

Back in the mists of prehistory, when we first became interested in investment, there was one thing we couldn’t understand. How could, for example, the Chinese stock market be at 3,000 while the Japanese market was at 24,000? Did that mean Japan’s market was worth eight times China’s market? Surely not…

The answer, of course, was that it all depended on the base figure used when the index was first created. But thank goodness we never encountered the Venezuelan stock market in those early days. The Bursatil made some significant gains in November – and closed the month at 1,142,802…

The FTSE reaching Venezuelan levels aside, if we had a wish for this section it would be to turn back the clock. Drones have been much in the news this year and there can’t be many people who haven’t seen one flying. It is only a matter of time before the Amazon drone touches down in your back garden. 

But how did we miss this story? Back in January 2018 two brothers from Germany made a drone that could carry a person – surely the future of travel. They made the drone out of an old bathtub and successfully carried out a manned flight round a local gymnasium. Definitely one that goes in the ‘do not try this at home’ column.

The world has, though, generally been a serious and sombre place for these last few months – and while we’ve all come to know and love Zoom (astonishingly, Primark report that sales of pyjamas are up and sales of business suits are down) – there have still been some good news stories to put a smile on our faces. So let us end the November Bulletin by sending our congratulations to Tilly and Kieran, who married in Bath earlier in the month. 

Tilly and Kieran met at school when they were 12. And they’ve decided to hyphenate their surnames for their life together. We will be back to update you in the first week of January. Have a wonderful Christmas and may 2021 bring everything you would wish for. And in the meantime, please join us in a toast to the happy couple: Kieran White and Tilly Christmas…

Market reaction to the US election

Wednesday, December 2nd, 2020

After a tumultuous election which saw some unexpected results such as Georgia swinging in the Democrats’ favour, and protests at polling stations which involved chants of both “Count the votes!” and “Stop the count!” the dust has begun to settle, somewhat. Many of President Trump’s series of lawsuits contesting results in states such as Wisconsin and Pennsylvania have now been thrown out of the courts, and he even hinted towards a concession by telling his government to cooperate with the transition to a Biden presidency.

Traditionally, 8th December is a “safe harbour” deadline where any controversy regarding election disputes are resolved, and so we can now, cautiously, expect said controversy to dwindle. With Joe Biden holding the most electoral votes, the Republicans likely holding the senate, the Democrats likely holding control of Congress, and the Republicans controlling the Supreme Court, we can expect the four branches of the government to be split between the two parties. 

So what does this mean for the markets? According to Marko Kolanovic of J.P. Morgan, “For US stocks, this is likely the best of both worlds. A potential Republican Senate majority should ensure that Trump’s pro-business policies stay largely intact, particularly the tax code and the direction the country has taken towards the center.” Biden will be unlikely to be able to enact any radical economic structuring due to constraints from the Republican senate, which may well result in confidence in lower volatility. 

In fact, the Dow Jones Industrial Average broke records by crossing 30,000 for the first time after Trump directed his aides to cooperate with Biden’s transition. This announcement helped to relieve some uncertainty relating to political risks over the winter. S&P 500 also saw gains of 1.6%, with the Nasdaq Composite rising 1.3% too. In fact, if the S&P 500 finishes this year on a high it would be the first time in history for the index to finish a year higher after falling 30% or more within that year. 

Of course, a slowdown is entirely possible, and caution is always advised when considering risk assets. As the transition from Trump to Biden continues to unfold, the markets will continue to develop their reaction.

How Brexit may affect the Stock Exchanges

Wednesday, November 11th, 2020

As the UK is set to depart from the frameworks of the EU, there is concern amidst London’s biggest share trading venues surrounding the topic of where they may be able to buy and sell European stocks and where they may not.

The dilemma

In order for trading to continue as normal, the EU would have to recognise that the UK and its exchanges are operating with rules and regulations that can be considered ‘equivalent’ to those under which the EU functions. Alasdair Haynes, the Chief Executive of Aquis Exchange who hold 5 per cent of the European Market, is very clear about his view of what is to come. He says, “there will be no equivalence. People are living in a pipe dream if they think it’s going to happen. People are getting prepared to move business over.” 

A declaration of no equivalence means that some EU based institutions will be prohibited from trading in London. That trading will be moved to other European cities, two popular examples of which are Amsterdam and Paris, which leaves London at serious risk of losing its dominance as a share trading centre. 

Currently, London handles up to 30 per cent of the European daily market, the daily market as a whole being worth €40billion. As exchanges opt to move their venues elsewhere in Europe to avoid the implications of share trading obligations (which determine which exchanges investors can trade their liquid stocks in), London’s grip on that 30 per cent will inevitably fall. 

Announced Plans

The London Stock Exchange Group’s share trading platform Turquoise has confirmed through a spokesperson that they now intend to open a base in Amsterdam at the end of November, from which it will trade EU shares. Cboe Europe, the largest stock exchange in Europe who are currently headquartered in the UK, has submitted their application to also establish an entity in the Dutch capital. TP ICAP, who are also headquartered in London at present, has begun discussion with French regulators with regard to setting up an EU base in Paris. While all three of these exchanges intend to keep their London venues where they are, their new plans are indicative of the overriding sense of uncertainty over the shape that Europe’s cross-border share trading market may take post-Brexit. 

David Howson, president of Cboe Europe, stated his concern by saying that “we need to be mindful Brexit doesn’t result in trading reverting back to national exchanges and undo all of the good work we’ve done to bring competition to [the] European equities market over the past decade.” 

November market commentary

Thursday, November 5th, 2020


The end of October brought plenty of bad news for Western economies as scientists stood in front of graphs and talked of ‘inexorable rises’ and ‘exponential increases.’ 

Unsurprisingly, stock markets duly took note. We report on 12 major stock markets and only two, India and Hong Kong, were up in October, with all the major Western markets falling. 

Away from stock markets, October brought us within three days of the US Presidential election. As we write, Democrat candidate Joe Biden is the strong favourite to become the 46th President of the United States. But could Donald Trump upset the odds as he did four years ago? You may well know the answer by the time you read this. 

As we always do, let’s look at all the detail and try to find some light amid the gloom. 


October’s main news for the UK came on the evening of Saturday 31st as Prime Minister Boris Johnson announced a second national lockdown, beginning on Thursday November 5th and lasting until (at least) Wednesday December 2nd. 

The Furlough scheme has been extended for another month and there seems certain to be claims for extra support from those businesses forced to close for a second time. Having scrapped the Autumn Budget and presented his Winter Economic Plan in September, you suspect that Chancellor Rishi Sunak may have to find yet more cash.

The impact of the pandemic is certainly starting to be felt by large employers. October saw EasyJet make its first ever annual loss and pubs chain Wetherspoons, which was founded in 1979, make its first loss since 1984. Rolls-Royce announced that it would look to raise £2bn from shareholders through a rights issue after a “sharp deterioration” in civil aerospace. 

There was more evidence of the inevitable trend away from retail shopping. H&M announced that it would close 250 stores, whilst Edinburgh Woollen Mill, owner of the Peacocks and Jaeger brands, announced that it would appoint administrators, putting 21,000 jobs at risk. The company described trading conditions as “brutal.” 

…And with 69% of Londoners apparently working from home (compared to 18% in Paris and 25% in Berlin), the outlook for the ‘commuter economy’ can only get worse, especially with the announcement of a second lockdown. 

The outlook for the hospitality industry was no better, with prospects for the hotel industry said to be the ‘worst for 50 years’ and the imposition of new rules on alcohol in Scotland described as ‘the death knell’ for the country’s hospitality industry. 

It is, though, an ill-wind. Tesco’s profits surged as their online orders doubled, and ASOS reported that it had added 3 million customers during the pandemic. Kentucky Fried Chicken (KFC) also announced that it would create up to 5,400 jobs in the UK and Ireland. 

In the wider economy, the UK staged some sort of recovery in August. The economy grew by 2.1% as the Eat Out to Help Out scheme boosted restaurants. The figure was, though, below expectations and the economy remains 9.2% smaller than before the pandemic struck. UK inflation rose to 0.5% in September and Government borrowing for the month was £36.1bn, £28.4bn more than last year and the third highest since records began in 1993. 

One pinprick of light at the end of the tunnel was the UK housing market. The lifting of the Covid restrictions was said to have led to a ‘surge in mortgage applications,’ with Nationwide reporting that house prices rose at their fastest rate for five years in October. The average price of a house in the UK is now £227,826. 

As we reported in the introduction, October was not a good month for world stock markets and fears of a second wave of the virus and the consequent lockdown meant that the FTSE-100 index of leading shares had its worst month since March. The FTSE dropped 5% to close the month at 5,577 – below the 5,672 at which it ended March. 

The pound had a relatively quiet month and was unchanged against the dollar in percentage terms. It ended October trading at $1.2954. 

Brexit and Trade Deals 

The month started with the EU taking legal action against the UK for ‘breaching the withdrawal agreement.’ The Prime Minister held ‘last minute’ talks with Ursula van der Leyen, President of the EU Commission, and stated that he didn’t want a ‘no deal’ exit. 

Then the French hardened their demands over access to the UK’s fishing and the prospect of ‘no deal’ was back on the agenda. It was reported that there were ‘significant gaps to bridge’ and by the middle of the month Downing Street was suggesting that the trade talks were ‘effectively over.’ 

Meanwhile, the UK struck a deal with Australia to extend freedom of movement, and concluded a £15bn trade deal with Japan. 


As you will probably know, both France and Germany ended October back in lockdown. France had imposed a night time curfew in the middle of the month but by the end of October the major European economies were in their second period of lockdown as Covid-19 cases soared. 

Where does all this leave the Eurozone economies? There was some good news when official figures showed that Eurozone economies had bounced back by 12.7% in the third quarter of the year, although this was not enough to regain the ground lost earlier in the year. 

…And, of course, measures to protect jobs and businesses have led to a huge increase in debt. A report in the Financial Times suggested that Eurozone budget deficits had risen almost tenfold in a bid to counter the pandemic, with budgets in the red by almost €1tn (£900bn) as President Macron said that the virus would be with us “at least until next summer.” 

Let us, though, finish with Europe’s glass half full, at least for this month. City AM reported that the value of the continent’s top tech firms had ‘soared’ over the last five years, signalling ‘a golden age of tech entrepreneurship on the continent.’ European tech companies are now worth four times what they were four years ago, with their combined value jumping from €155bn (£139bn) to €618bn (£556bn). 

Sadly, Europe’s two major stock markets were more concerned with the possible long term impact of another lockdown. Germany’s DAX index fell 9% in October to close the month at 11,556 while the French stock market was down 4% at 4,594.  


October started dramatically for the President when he tested positive for Covid-19 and spent a few days in hospital. He appears to have made a full recovery and is back on the campaign trail, no doubt cheered by figures from the Bureau of Economic Analysis, which revealed that the US economy had grown at an annualised rate of 33.1% in the third quarter. This was double the previous best, recorded in 1947, and recovered the ground lost in the 2nd quarter when the economy contracted by 31.4%. 

Jobless claims also fell, although they remain at record levels. At the height of the pandemic 6.9m Americans applied for jobless benefits in a single week which is roughly ten times the number seen in the financial crisis of 2007 to 2009. 

October saw US airlines put a combined total of 32,000 staff on unpaid leave as the job recovery slowed down. Figures showed that 660,000 people found work in September but that was well below the 850,000 predicted by economists. There are plenty of people in work at Amazon, but the company revealed that 1.44% of them, nearly 20,000 employees, have had Covid-19. 

In company news, Apple launched the iPhone 12 and business is unquestionably booming for the tech giants. Apple, Google, Facebook and Amazon all reported figures on September 30th and there was one common thread: their growth shows no sign of slowing down. 

US markets were, though, influenced far more by worries about the pandemic than the rise and rise of the tech giants. The Dow Jones index closed the month down 5% at 26,502, while the more broadly based S&P 500 index was down 3% at 3,270. 

Far East 

The month’s most significant story in the Far East was China’s continuing ‘bounce back’ from the effects of the pandemic. 

As manufacturing shut down at the beginning of the year, the Chinese economy contracted by 6.8% in the first quarter of the year, the first quarterly contraction since records began in 1992. However the recovery appears to be well under way, with official figures showing growth of 4.9% for the third quarter compared to the same period last year. This was below the 5.2% predicted by economists, but still confirms China’s rapid recovery from the earlier effects of the pandemic. 

Figures for September showed that both exports and imports were up, with Chinese exports up by 9.9% and imports by 13.2%, cutting the country’s trade surplus for the month from $59bn (£46bn) in August to a paltry $37bn (£29bn). 

It was not such good news for the wider Asian economy, at least in the short term. The International Monetary Fund downgraded its forecast for this year, suggesting that the wider Asia Pacific economy would shrink by 2.2% rather than the previously forecast 1.6%. However, it expects to see growth of 7% next year, driven by the rebound in China. 

In company news Huawei continued to suffer from accusations of collusion with the Chinese government. This was good news for Samsung, which posted a net profit of $8.3bn (£6.4bn) for the third quarter as smartphone sales jumped 50%. 

Chinese technology giant Ant Group confirmed its plans for a joint stock market listing in Hong Kong and Shanghai in the world’s largest stock market debut. The company will sell shares worth $34bn (£26bn). 

On the region’s stock markets it was a quiet month for China’s Shanghai Composite index, which rose just seven points to 3,225. The Hong Kong market rose 3% to close October at 24,107, but the other two major markets both lost ground in the month. Japan’s Nikkei Dow index fell 1% to 22,977 while the South Korean market was down 3% at 2,267. 

Emerging Markets 

November was a quiet month for news in the three major emerging markets that we cover. Brazil has now had 5.3m cases of Covid-19, the third highest figure after the US and India. Despite this, President Jair Bolsonaro has overruled his health minister and said that the country will not be buying a Chinese-made vaccine which, said the President, has not yet completed clinical trials. 

As we mentioned above, India was one of only two stock markets to rise in October, gaining 4% to close the month at 39,614. The Brazilian market dropped 1% to 93,952, while the Russian index had a poor month, dropping 7% to end October at 2,691. 

And finally 

October, clearly, has not been a good month. As we said in the introduction, advisers and scientists have stood in front of graphs and here we are back in lockdown. Fortunately, there have been some lighter moments in the month.

At the beginning of the month firefighters in Hull were called to a bizarre rescue mission. Student Rosie Cole, who had been drinking wine and honey tequila, had been dared by her friends to see if she could fit inside a tumble dryer. Ms Cole gracefully accepted the challenge and climbed inside the clothes dryer. 

You know what’s coming. Ms Cole was duly rescued by the fire service. 

…But by the end of the month the Hull Fire Brigade had been upstaged by their colleagues in Essex, who had to rescue three teenagers who had crawled into an industrial-sized tumble dryer. There was no word on whether honey tequila played any part in the incident. 

The monthly market update will be back at the start of December. Following Saturday evening’s announcement it seems appropriate to send all our clients our best wishes for the coming month. Stay safe, take care of those you love and, of course, resist the honey tequila and the consequent urge to climb inside a tumble dryer…

How long term home working will affect your finances

Wednesday, October 14th, 2020

There’s a chance that many workplaces may never return to office. Several prominent tech firms have already said that their staff can continue to work from home even after the pandemic and the evidence suggests that a large number of other employers are thinking the same thing.

Essentially, the pandemic accelerated an already established shift in the way we work, so that a few years worth of changes happened overnight.

The Chartered Institute of Personnel and Development recently conducted a survey and found that the proportion of people working regularly from home has risen to 37%, more than double the number from before the pandemic.

What’s more, employers think that the proportion of staff who work permanently from home full time will rise to 22% post-pandemic. In those pre-pandemic, halcyon days, this figure was 9%.

This shift will have financial implications for those home-working. And, as usual, the good comes with the bad. Here are some things you should consider:

It might affect your insurance costs

Back in March, the sudden change to home working will have been unexpected and you might have overlooked the impact it could have on your insurance. However, now the dust is settling, you should mention it to your home insurer. 

Chances are your home will have an extra printer, laptop and tablet, valuables that should be covered by your home insurance policy. Remember that if this kit belongs to your employer, their insurance should protect it. It’s worth double checking before you add anything to your policy.

Lastly, if you’re working from home permanently and no longer using your car to commute, tell your insurer. You may be able to pay less on your premiums.

You can claim tax relief on expenses

On 6 April, Rishi Sunak raised the claim allowance to £6 a week to cover extra household bills caused by working at home. 

When there is a home working arrangement in place, an employer can pay a weekly amount to its employees tax free. If you think that your costs exceed this amount, you should check with your employer to see if they will make higher contributions.

This benefit will only be available if your employer specifically asked you to work from home. If you’re working from home voluntarily, you cannot claim this tax relief on your bills.

It might be harder to secure a pay rise

By now, it’s widely established that working from home needn’t have an adverse effect on the quality of your work. However, there’s still quite a lot of uncertainty around the effects of homeworking on employees’ ability to secure promotions and pay increases.

When working remotely, it can be hard to keep relationships with people in your firm. There’s also a chance that employees who work from home permanently in a company where some staff still work from the office could get sidelined when promotions come up.

Showing the value of your efforts can be more difficult. It seems like good communication is important to avoid being overlooked. Try to communicate any new skills you have learnt and consistently show how your personal development is supporting you to do your job effectively at home.

If you’d like to know more about how your career choices affect your financial future, please get in touch. We’d be more than happy to help.

Hidden financial damage of Covid

Thursday, October 1st, 2020

The Covid crash has threatened the prosperity of millions across the country. While government support measures have gone some way to mitigate its effects, there has been an unseen level of redundancies and a recession of historical proportions.

However, some of the financial consequences will be slightly more insidious as the impacts slowly ripple outwards across the economy. Here are a few secondary impacts of the coronavirus pandemic that could harm your financial security:

Borrowing money is harder

When times are hard, lenders tighten their lending criteria in preparation for tumultuous economic times.

For many, it is now much harder to get a mortgage and credit card companies have dramatically reduced credit limits. For anyone who isn’t a perfect lending candidate, the chances of securing a loan have got far slimmer. This will disproportionately affect young adults who might not have as much financial security as older generations.

Financial services firm Hargreaves Lansdown report that lending has dried up even quicker than it did following the 2008 financial crash. What’s more, they also forecast that the situation for borrowers will get even tougher over the next three months.

You’re more likely to get scammed

Borrowing isn’t the only area where the waters might become a little more treacherous over the next few months. Fraudsters often use the latest news stories to coerce people into scams.

Difficult times bring the best out in some people – highlighted by the amazing community responses to the pandemic across the country. However, they bring out the worst in others…

Some scammers have actually gone so far as to impersonate the World Health Organisation. 

Covid related scams take many forms; we’ve heard of scams about insurance policies, pension transfers and high return investment opportunities, including investments in coronavirus treatments.

Unfortunately, modern scammers are a sophisticated bunch and will try many tactics to persuade you to disclose personal or financial information – most victims report scammers to be impersonating a company they already deal with. Figures from Aviva indicate that 12 million people have already been targeted by coronavirus scammers in the UK.

You’re more likely to make weird spending decisions

The financial upheaval has placed most Britons into two groups. One group has saved a fortune during lockdown due to a reduction in their spending while the other has been catapulted into financial hardship.

Whichever group you fall into, it’s likely that your spending habits have changed. When we are going through tough times, we often unconsciously make spending decisions that we think will restore control.

Our inclination to have a steady supply of household items can be a way to regain a sense of control – look at how many stockpiled toilet roll in the early days of the pandemic.  

When looking back on the last few months, many of us will find that our spending patterns have shifted considerably. It’s likely that the strong emotions and feelings that the pandemic provoked will have been at least partly responsible for this change.