Weekend press review: Buffett boosts cash

by | Aug 13, 2018

Share this article

Facebook Open Graph

The Sunday Telegraph reports on the pre-paid funeral plan market, a sector it claims is soaring in popularity despite concerns about this under-regulated market. Sales of prepaid funeral plans were more than three times higher in 2017 than in 2007, according to the Funeral Planning Authority (FPA).

You’ll know about these plans of course – you choose to pay upfront or in instalments, sometimes for as long as 25 years and in return a funeral director will arrange and carry out your funeral after you die. Generally the money is placed in a trust or an investment-linked insurance policy to guard against inflation  It all sounds simple but concerns exist around levels of commission, sales tactics and the processes involved which some argue can be to consumers’ detriment.

We’ll spare you the details but suffice to say if you want to know more, then Harry Brennan’s article might be of interest.

The Financial Mail on Sunday is offering guidance to readers who might be considering letting out their home rather than selling, with an article focused on what accidental landlords must know about tax, mortgages, insurance and earning income. There’s little that will be news to advisers however it is a useful overview of some of the considerations which many landlords could easily overlook. If it’s an area of interest to you then we suggest you read Emma Lunn’s article.

Sally Hamilton is in the MoS fund focus hotseat this weekend, with the Threadneedle Dynamic Real Return fund the subject of her analysis. Managed by Toby Nangle, she reports that the fund has an annual target of inflation plus four percentage points and it has hit this over the five years since it was launched. It selects from a basket of in-house funds run Columbia Threadneedle group.

To meet the target, Nangle says each holding must ‘earn its place’. He expects investments in Japan to contribute strongly. Just under 15 per cent of the fund is invested there. By contrast just 5 per cent is in the ‘sluggish’ UK market – and the US does not get a look in.

It’s the younger generation who The Sunday Times money section is looking to attract with its lead story. It looks at what perks are being offered by banks and building societies to those who are about to start a degree or an apprenticeship. Whilst it’s important of course, it’s not exactly a topic on which we believe advisers will be getting that many queries on from clients, although if it is of interest then there is a very useful little table in Kate Palmer’s article which summarises all the perks on offer as well as the charges.

Following news that Warren Buffett’s Berkshire Hathaway US fund has recently reported rising cash holdings, Ian Cowie is reflecting on the value of keeping some cash ahead of periods where stockmarkets might prove volatile. He’s keeping his commitment to equities but points out a few “reasons to be fearful”. Part one is that Berkshire Hathaway’s 18% cash position is not as high as it was on the eve of the last two market shocks (20% in 2008 and 26% in 2000) but as Cowie says “the warning light is beginning to glow”. Secondly, he is concerned about frothy valuation and irrational exuberance in some parts of the market – fuelled in no small part by the rise in popularity of passive investing which channels money into the most popular and largest shares. Part three is some fresh investment analysis in America from Ned Davis research showing how falling unemployment and rising Fed rates have tended to precede stock market shocks in the past. Unemployment in the US is near a 50 year low and the Fed is widely expected to increase rates this autumn.  His summary is that with stockmarkets still riding high, now might be a good time to raise cash holdings perhaps by taking profits or sitting on dividend income as cash rather than reinvesting it. It sounds like a sensible strategy to us.

Share this article

Related articles

Winners of the Protection Guru Awards 2022 are announced

Winners of the Protection Guru Awards 2022 are announced

Protection Guru, has today announced the winners of Protection Guru Awards 2022. In this, their second year, the awards have been established to recognise the leading lights of the protection industry. The team at IFA Magazine extends our congratulations to all this...

Trending articles