My First Blog Post

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I spent an astonishingly long time thinking about what to write about in my first post. Is this normal?

I can’t imagine people deliberating as long as I did. Almost as long as it took me to get a WordPress theme that I could work with (I reset my WordPress site twice). I chose the ‘Maxwell’ theme because it looked really simple. I then decided to just start writing. Nothing fancy.

I did a short introduction about who I am within the About page. That distracted me for 30 minutes whilst I again contemplated my first post.

My site will include my journey as a small amateur investor. A sort of diary to document my investments, my ongoing education in investing and all of the associated sub-topics.

I have been investing in the stock market for years but it is only in the last few years that I started to really try and properly educate myself. Just like any subject, the more you learn, the more complex it can be.

Investing to build wealth is not difficult. If you want to beat the majority of investors, simply set up a direct debit to invest in a passive low-cost world tracker fund and do it within an ISA , LISA or SIPP within the UK. Job done. Let capitalism, time and compounding take care of the rest. It’s tried and tested and it works. It also beats 80-90% of professional fund managers over a 10 year period. 

But, it’s also a bit dull. Regular investing in a low-cost tracker fund is very boring for someone who wants to constantly tinker within the world of finance. I know I don’t have ‘an edge’ in the market. I’m not going to be picking hot stocks and give professional fund managers a run for their money (pun intended). I know I should simply invest in a passive low-cost tracker fund or two but it just doesn’t scratch that itch.

I intend to take more ‘risk’. Of course, I want to maximise my total return from investments but I also get lots of pleasure from researching investment approaches and trying new things. Not the hot-stocks variety. That’s too much work. I can’t imagine I will go back to buying individual stocks but I will be delving into the murky world (from a passive investor’s perspective) of active funds and Investments Trusts. 

I recently started a new ISA with Trading 212 to develop a portfolio aimed at income and I will be using that portfolio to document my investing journey. Trading 212 is bargain basement as a platform. Very basic and I already miss the bells and whistles that Hargreaves provides.

The Great Lockdown

After having the longest economic expansion in history, the pandemic feels like a cruel twist at the end of an otherwise ‘feel-good’ movie. If it was from Hollywood, I would be thinking at this point that the writers have lost the plot.

A paper by the International Monetary Fund in April, appropriately called ‘The Great Lockdown’, says that as a result of the pandemic the global economy is projected to ‘contract sharply’ by -3%. Now, I know we are talking about big boy (or girl) numbers here but this really doesn’t feel like a 3% type of thing. Their number feels a little bit optimistic although I have no idea what the number should be. If it was in double digits it would feel more fitting to our current circumstances. But I work in the NHS.

Will the stock market recover from this? Of course, it will. Although it’s looking like a ‘V’ shaped recovery at the moment (because of government stimulus), people are starting to talk more about a ‘U’ shaped recovery. Increasingly, others are talking about an ‘L’ shaped (flatter) recovery. More immediately, others are discussing the potential downside for a ‘W’, a ‘double bottom’ as they call it i.e. another larger drop.

A further drop seems far more likely to me. This recent stock market exuberance will end soon. It seems to be completely at odds with the fundamentals. My own personal view, for what it’s worth, is that it could take several years to recover from this.  Certain industries, and people’s livelihoods, are going to be almost wiped out by this economic shutdown. 

That’s what I’m planning for. Ultimate flippin’ pessimist. I’ll be watching events very closely.

Remember, I’m an amateur investor. Always do your own research.

Best,

Bollinger

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