JEFF PRESTRIDGE: Press of focusing on negative stories

I was amused to see a comment from a financial advisor on the social media website LinkedIn accusing the financial press of focusing on negative stories at the expense of good news. What a nonsense.

The post was created by Emily Turgoose, managing director of Life Matters, a financial planning company based in Poole, Dorset.

I quote directly: ‘Are you aware that billions of pounds in value have been added to the value of UK companies in the last six weeks? In the last month alone, the FTSE100 is up nearly six percent, and yet we haven’t seen this, let alone make headlines.”

She adds: “It really frustrates me that the media focuses on bad news and sensationalizes normal market behavior.” There is more, but she concludes: ‘Whatever you do, don’t let the media influence your investment decisions. They have their own agenda and it’s not in line with yours.’

For the record, I have nothing but deep respect for the great work that financial planners like Emily Turgoose do to promote the financial well-being of their clients. But to accuse all (personal finance) journalists of having an agenda at odds with that of looking after their readers’ financial interests is both naive and insulting.

It is as if I were saying that all financial advisers were guilty of advising members of the British Steel Pension Scheme to transfer their money out, causing them significant financial losses. Both are lies.

For the record, I’m happy to report that the FTSE100 is up 1.9% over the past year, 0.6% since the start of the year and 2.3% over the last month. That’s usually good news (two out of three) to refute Emily’s view that the media coverage “will certainly not inspire optimism and could make a recession deeper and longer.”

Another point about good investment news. A few days ago I had a fascinating conversation with Paul Marriage, one of the three managers who oversees the Tellworth UK Smaller Companies fund.

Like all funds that invest in smaller UK companies, the Tellworth vehicle has had a torrid year last year, posting losses of 26.3 per cent. Performance has been blighted by a flight from risky assets as interest rates have risen and inflation has soared. International investors have also shown great distaste for the UK stock market, particularly smaller UK companies.

Enough to derail some fund managers, but not Paul Marriage. He has been an asset manager for over 20 years, dealing with the March 2020 market corrections and the 2008 financial crisis. He knows how to handle the blows.

While he says further short-term losses cannot be ruled out, Marriage believes there are positive signs that the market could turn for the better for many smaller UK companies. These include frenetic M&A activity in the industry with global companies attracted by the low valuations of many quality companies.

Marriage also says industry earnings declines are not as severe as expected, as investors begin to bounce back in dribs and drabs. Once inflation and energy costs start to come down, perhaps as early as next spring, this could lead to a revaluation of British smaller companies in the range of 20 to 30 percent.

Take note, Emily: UK smaller companies could be one of the good investment news stories of 2023.

Santa is early and it’s all for a good Santa…

Like many readers, I love raising money for charities by doing crazy things. While I’m not as ambitious as some like Gary McKee, who wants to run a marathon almost every day this year (only 20 to go), I’m happy to do my part.

It explains why visitors to London’s Hyde Park witnessed a slightly fat Santa waddling his way from Kensington to Hyde Park Corner at lunchtime last Thursday – and then waddling back again. Some were shocked by what they saw, others asked why he had come so early.

By completing this Santa 5K run on behalf of MND Association, I have raised much-needed funds for this wonderful charity that aims to improve access to care, research, and campaigning for people living with or affected by motor neuron disease.

Anyone wishing to sponsor my efforts can do so by visiting justgiving.com/fundraising/jeffrey-prestridge5.

If anyone would like a spare (freshly steamed) Santa outfit for December 24th and 25th please email me at jeff.prestridge@mailonsunday.co.uk. First come, first served.

Time for 3 percent on Premium Bonds

Higher interest rates are coming this week as, as expected, the Bank of England raises its base rate from 3 to 3.5 percent. Good news for savers, bad tidings for borrowers – especially those with variable rate mortgages or credit card balances.

If the base rate goes up, it will be interesting to see what NS&I does with the price percentage on its ever-popular Premium Bonds (I won another £25 in the November draw).

As many readers have noted over the past few days, the effective tax-free price rate on Premium Bonds was 1 percent when the base rate started its journey to heaven from 0.1 percent last year this time around. Despite eight base rate hikes in the past year and a ninth on the way, NS&I has raised the price rate on Premium Bonds only twice – to 1.4 percent in June and then to 2.2 percent in October (just before the base rate went from 2.25 to 3 percent).

As reader Billy Burrows politely asks, “Perhaps you can give the authorities a helping hand on behalf of millions of investors?”

Billy, I’d love to join you. So to Ian Ackerley, boss of NS&I, I say, ‘Lift out your finger and increase the Premium Bond price percentage!’ A rate around 3 percent would be enough to get started.

Safe spaces… a shame to scrap them

It is good to see bank HSBC doing its part to support those people (mainly women) who are victims of economic abuse at the hands of a current or former partner.

According to the charity Surviving Economic Abuse, one in six women has experienced economic abuse as a result of their partner trying to control their finances – often in conjunction with domestic violence.

In recent advertisements, HSBC is keen to point out that all of its branches provide “safe spaces” that victims of economic abuse can access — and use to privately call a domestic violence helpline or support service.

Other retailers such as Boots, Morrisons, Superdrug and bank TSB are also making similar safe spaces as part of a plan overseen by campaign group UK Says No More (against domestic violence and sexual assault).

If someone is trying to escape from an abusive situation but is worried that they will not be able to open a bank account without a fixed address, HSBC helps people open their own bank account through the ‘no fixed address service’.

All very commendable. But it’s a shame that HSBC’s safe-room count will shrink next year when the bank closes 114 branches, reducing the number of high street stores by more than a quarter.

Unfortunately, in these desperate times, no bank branch is safe from closure – safe spaces or no safe spaces.

survive-economic-abuse.org

Poll result not easy to read for chancellor

Finally, I would like to say a massive thank you to the readers who took part in The Mail+ survey last week on how best the government is tackling the black hole in its finances.

The results will not be good reading for Secretary of the Treasury Jeremy Hunt.

Only 12 and 9 percent of respondents, respectively, said raising income tax rates and freezing benefits were the best course of action.

This compares to the 48 percent who said boosting economic growth was the way forward – and the 23 percent who said government spending should be reduced.

A vote for Trussonomics?