Page 4 - DIY Investor Magazine | Issue 34
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‘So, the Big Dog has had his day, has there been a period of greater political, economic and social upheaval in living memory?’
Those breathing a sigh of relief as Covid subsided call to mind the euphoria expressed by Lieutenant The Honourable George Colthurst St. Barleigh at surviving ‘The Great War 1914 – 1917’, as the Horsemen of the Apocalypse galloped in bringing the abomination in Ukraine, an energy crisis and rampant inflation.
To that thoroughly nice chap in the golf club in Frinton-on-Sea, I genuinely don’t think you have seen it all before; we hope that things will bounce back, but the ‘new normal’ could look very different to the recent past.
Boris could rue his enthusiasm for resurrecting imperial measures, because people can now see that a gallon of petrol will cost you an Ayrton.
The good news from a DIY investing perspective is that according to a Boring Money survey, at the end of 2021 there were 6m self-directed investors – a 28% year-on-year increase – with the number of accounts set to rise by 66% in the next four years.
Less encouraging was the relatively rudimentary levels of financial literacy on display concerning investing staples such as the power of compound interest and the corrosive effect of inflation; ongoing access to education, good content and advocacy will be vital in keeping those new to investing engaged and committed to a long-term strategy.
But where to invest? Variously attributed to George Bernard Shaw, Winston Churchill and Groucho Marx, the question posed in the title is what price do you put on remaining true to your moral compass?
Those early to the ethical investing party would invariably have had to compromise returns in exchange for a smug, Ready Brek glow; that all changed when ESG considerations moved front and centre as investors realised it was possible to do good and do well.
However, ‘events dear boy’ have caused many living on the moral high ground hog to covet a bit of meat-and-two-veg.
In this issue Saltydog Investor reveals that the commodity and energy funds he holds have returned 30% when most other sectors have tanked.
If alternative and renewable energy sources are to play a major role in staving off the ravages of climate change, there needs to be significant investment in R&D and also in changing consumer behaviour; but who is going to tell investors to miss out on ‘that thar gusher’ as countries facing ruinous spikes in energy prices ramp up the production of fossil fuels.
Perhaps more than that, recent events have put inequality into sharp relief – the queues of the privileged at airports mirrored by those at food banks; and this is where two worlds collide
– Sustainable Aviation Fuels, upon which the aviation industry pins all its hopes of achieving ‘Jet Zero’ are dependent upon the use of ‘biomass’... or ‘food’ to you and I. Suddenly, the dilemma is not between heating and eating, it is between flying or dying.
‘Windfall’ taxes have made plenty of headlines, but many investors have reaped the benefit of share buy-backs; what about a government that takes 52.95p per litre of fuel plus 20% VAT. Pardon?
For there to be a market, by definition there must be winners and losers, but it is in times of strife that many investing cliches kick in; in this context chasing profits in fossil fuels may disappoint, because at some point Mother Nature is going to demand some respect.
In the meantime, go on then Groucho, but no cheques, and you’ll have to sort out that cigar breath.
DIY Investor Magazine · July 2022 4

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