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MoneyWeek Issue 944

There's a reason MoneyWeek is Britain's best-selling financial magazine. We exist to help you ground your portfolio so that it keeps your money safe during rough patches and growing in the good times. We don't just look at how to maximise your returns and limit your losses, we also like to look at how you can keep more of the money you've made. Week-in, week-out we'll guide you through the financial world as it changes, alerting you to all the opportunities to profit and dangers to avoid, as they appear. Income strategies, rising-star companies, the best funds and trusts, clever ways to preserve your wealth during market turmoil... you will get the best ideas from the sharpest financial minds and investing professionals in Britain.

United Kingdom
Dennis Publishing UK
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$6.61(Incl. tax)
$184.11(Incl. tax)
51 Issues


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from the editor-in-chief...

“Last year was all about quantitative tightening and interest-rate hikes. No more” Are global equity markets on the edge of a melt-up? Blackrock’s Larry Fink (of whom I don’t entirely approve – see my blog on moneyweek.com) seems to think so. Too many people have been too pessimistic about markets, he says. But as it becomes increasingly obvious that the global economy is in perfectly reasonable shape, with the Chinese economy in particular still growing nicely, they (and their money) will be back, something that could push markets even higher than they are already (see page 4). It is worth remembering, however, that rising markets are not just about mildly healthier-looking economic indicators. They might not be about them at all: there is very little historical correlation between GDP growth, which is an…

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loser of the week

“I’ve done a stupid thing”, Silva Moro told her sister in a Whatsapp message in 2016.“I put a strudel in the oven to cook where €40,000 was hidden”. The story emerged in a court in Padua, Italy, last week. Moro’s partner, Alberto Vazzoler, an Italian businessman on trial for money laundering and tax evasion, had apparently forgotten to tell her about his stash of “hot” money, says The Times. In 1999, Vazzoler started Dublin-based Net Fraternity, which rewarded internet users for looking at online adverts, but it went bust in 2010. Nevertheless, Vazzoler has homes in Monte Carlo, Jesolo and Padua, as well as yachts and luxury cars. He is accused of laundering €46m across Europe, channelling the funds to tax havens. Good week for: Elton John and husband David Furnish are…

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china’s economy is moving up a gear

“China is the dog and the rest of the world economy is its tail,” says John Authers on Bloomberg. The global economy breathed a sigh of relief when the Chinese economy, the world’s second largest, grew by 6.4% year-on-year in the first quarter of 2019, slightly better than expected and the same pace as in the previous three months. Factory output went up by 8.5% in March, and retail sales expanded by 8.7%. “China’s Communist rulers continue to keep up their end of a compact made with the populace ever since the Tiananmen Square massacre of 1989: no democracy, in return for sustained economic growth of more than 6% per year,” says Authers. The current round of stimulus shows just how determined policymakers are to bolster growth as the country marks…

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record rally has room to run

America’s S&P 500 index has rallied by 15% this year and has just reached a new record peak, the first new all-time high in seven months. The MSCI All Country World Index, which tracks global stocks, has also appreciated by more than 15% since the start of this year. The rally in global equities may have further to go as investors return to the market. As BlackRock CEO Larry Fink told CNBC: “There’s too much global pessimism. People are still very underinvested. There’s still a lot of money on the sidelines”. He added: “We have a risk of a melt-up, not a meltdown here.” For the boss of the world’s largest asset manager, “that’s hardly a surprising view”, as Michael Mackenzie notes in the Financial Times. Still, whether or not there is…

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germany’s equity culture recovers

Only 9% of German wealth is invested in shares and investment funds, according to the Bundesbank. “Germans like fixed interest rates, and are willing to sacrifice higher returns for that security,” Kay Bommer, general manager at the German Investor Relations Verband, told Reuters. Apart from being famously risk averse, many Germans burnt their fingers badly in the late 1990s. Close to two million people bought into the “heavily advertised but ultimately ill-fated flotation of state-owned Deutsche Telekom in 1996,” Tobias Buck points out in the Financial Times. When the dotcom bubble burst, they suffered heavy losses. “This did a lot of damage to the reputation of the stockmarket,” Martin Weber, a professor of economics at the University of Mannheim told the FT. But now the lousy returns on savings accounts with interest…

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“You can talk about cutting expenses all you want, but it’s income that builds wealth. So when I hear a blogger say they saved 70% of their after-tax income and then I find out they made easily more than $200k, their “sacrifice” is a bit hollow... to get wealthy you need to earn a high income and just keep buying stocks… Unfortunately, the sad truth is that most Americans will never be able to do this. They will never earn enough money to invest and get rich… 54% of US households don’t own any stocks and 69% of working Americans save 10% of their income or less (with 21% of working Americans saving nothing at all). This is why the personal finance industry loves the “cut your lattes and get…