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MoneyWeek 1044

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MoneyWeek is a weekly magazine that enables you to become a better-informed, smarter investor and enjoy the rewards of managing your money with confidence. 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.

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United Kingdom
Dennis Publishing UK
51 Issues

in this issue

3 min.
from the editor-in-chief...

If history bothers to remember big-name fund managers, two will stand out from the latest generation. The first is Neil Woodford, who will mostly be remembered for losing an awful lot of people an awful lot of money. Anyone who invested in his Woodford Equity Income fund at launch will have lost just over 20% of their money. Anyone unlucky enough to invest at its peak in 2017, when the fund was managing more than £10bn, will be down over 40%. Miserable. The second is Baillie Gifford’s James Anderson, who will mostly be remembered for making an awful lot of people an awful lot of money. In 2000, he took over management of the Scottish Mortgage investment trust. Since then it has returned 1,530%. The MSCI World has barely managed 270%.…

1 min.
the high price of power

When Donald Trump stepped down as president he was about $700m worse off than when he took office, according to Bloomberg’s Billionaire Index, reports Charlie Mitchell in The Times. While in office, Trump transferred his “real estate and branding empire” to his sons, Donald Jr and Eric, and continued to put business their way by regularly visiting his properties with his security team. Even so, Trump’s net worth fell from $3bn to $2.3bn over his term. About 75% of his income comes from commercial property, where values have dropped as home working has surged, particularly in New York and San Francisco “where Trump has most of his stake”. His property portfolio is now worth 26% less than in 2016.…

1 min.
good week for

Retired billionaire investor Bill Gross made around $10m for his charity earlier this year, betting that shares in games retailer and “meme” stock GameStop would fall, reports Bloomberg. Gross, who co-founded giant asset manager Pimco, initially lost heavily as GameStop surged by more than 1,700% in January, fuelled partly by users on social media site Reddit. But his bet paid off when the price slid in early February. Vinyl sales proved more profitable for British record labels than YouTube last year, despite the platform’s popularity, says Matthew Moore in The Times. Vinyl sales jumped by 30% to £86.5m in 2020, earning labels more money than at any point since 1989, “a remarkable achievement for a format once tipped for obsolesce”. The re-release of classics such as Fleetwood Mac’s Rumours, Amy Winehouse’s…

1 min.
bad week for

Reports of scams where fraudsters hack into social media accounts and blackmail individuals and firms by threatening to expose personal material almost doubled in the last year, reports the City of London Police’s National Fraud Intelligence Bureau. More than £4m was lost by social media users, with some individuals paying more than £2,000 to regain access. Kylie Jenner (pictured) came under fire this week after asking fans to help her former makeup artist pay for surgery, says Natasha Jokic on Buzzfeed. Samuel Rauda’s family set up a donation page to cover costs after Rauda was in a serious car accident. Jenner – net worth around $700m – donated $5,000 and shared a link to the fundraising website. Fans were quick to point out she could have easily paid for it all…

2 min.
overlooked europe is a solid bargain

President Biden’s mammoth $1.9trn relief bill has left Europe’s own stimulus efforts looking scrawny, says Johanna Treeck in Politico. Figures from the Organisation for Economic Co-operation and Development show that US pandemic stimulus measures amount to 13% of GDP, much higher than the 7% spent in the eurozone. That partly reflects America’s lack of a social safety-net, which forced Washington to step in with extra spending last year, Nicolas Goetzmann of asset manager Financière de la Cité told Aziliz Le Corre in Le Figaro. Nevertheless, there is now a “chasm” between US fiscal largesse and Europe’s more cautious approach. The recovery gap The result? The European Central Bank projects that the euro area won’t regain its pre-crisis GDP until the second quarter of 2022, a year behind the US. Europe’s policymakers are reluctant…

1 min.
stocks and bonds are heading for an inflation scare

Markets are heading for an inflation scare, says James Mackintosh in The Wall Street Journal. Until recently the “dominant” assumption was that the US was on track for a short-term jump in inflation, but that the US Federal Reserve would step in with interest rate hikes if things got too heated. Yet a majority of central-bank policymakers say that they intend to keep interest rates pinned close to zero until 2024, even as the US economy begins to boom. The Fed just doesn’t care as much about fighting inflation as it used to. When markets wake up, expect yields on long-dated Treasury bonds to spike. Ten-year Treasury yields recently broke through the 1.7% mark, their highest level since the pandemic began. Still, that should be kept in perspective: the ten-year yield…