In this week’s MoneyWeek magazine: the companies profiting from the data-mining goldrush; why small investors must find their voice; and equity release as pension plan.
Plus, a worthy competitor to Baillie Gifford’s Scottish Mortgage investment trust; how pension scammers are targeting steelworkers – and how to avoid becoming a victim yourself – and can lipstick predict markets?
Of course, we also have our usual collection of news, views and comment; a roundup of the best share tips from the rest of the financial press (and a few of our own); personal finance, small business and six pages of how to spend it once you’ve made it. Sign up to MoneyWeek magazine now and you can get the magazine delivered every week, along with full access to the MoneyWeek website and the iphone and smartphone app.
Profit from the data-mining goldrush
Think of a valuable commodity and you might think gold; perhaps oil for the way it drives the economy. But a new class of commodity has arisen in the last few years that promises to create a whole new sector of the economy. I’m talking about data. It’s hard to conceive of the amount of data we generate every second of every day. Personal data from via smartphones; sensor data from the “internet of things”; how much we spend, what we spend it on and where we spend it; location data; social media. The list is endless. And all this data is extremely valuable. It’s collected, bundled up, sold, resold, analysed and reanalysed.
Big data, as it’s called, is going to change everything. Sometimes for profit – hedge funds are analysing masses of data to gain a competitive advantage. Sometimes to make the world a better place – more effective healthcare, more efficient use of energy, action to tackle pollution and crime, for example. And sometimes to make the world a more frightening place – China has plans to use it to monitor its population in minute detail.
I take a look at what’s going on, and pick some of the companies to buy to take advantage in this week’s issue of MoneyWeek magazine.
Small investors must find their voice
At the start of this year, there was talk of another “shareholder spring” as executive pay, yet again, came under scrutiny. As owners of the companies involved, shareholders should, in theory, be acting as a check on egregious pay packets and “heads I win, tails you lose” bonus schemes. This is, after all, their money. But enthusiastic shareholder engagement is still far from common, particularly among individuals. Part of the problem is that, often, investors do not directly own the shares they buy – and even if they do, they may not have the rights that should go with ownership. That should change, says Lucy Loewenberg.
Can lipstick predict markets?
Investors are drowning in data. Practically every day we are confronted with some economic indicator or index. But analysts looking for an edge are always on the lookout for new ways to monitor activity. Two odd gauges that have been around for a while are the hemline and lipstick indicators. Hemlines are high in boom times, signalling rising confidence, while consumers cut back and buy little treats, such as lipstick, if they fear a downturn. But are any of these actually helpful? Cris Heaton investigates.
A worthy competitor to the Scottish Mortgage investment trust
Baillie Gifford’s Scottish Mortgage investment trust is very popular among private investors, and indeed is one of our favourites here at MoneyWeek. T has an excellent record of identifying and investing in a small number of big, long-term winners, says Max King. But it does tend to rely on a few big tech stocks, and can contain as much as 25% unlisted stocks. For investors who “like the Baillie Gifford style but seek a less volatile approach”, Max has picked an alternative. Find out what it is here.
Equity release as pension plan
The idea of using your house as a cash machine with which to fund your retirement has gone mainstream, with the announcement that Nationwide is the first major mortgage lender to offer it. Is it worth considering? Ruth Jackson looks into the pros and cons.
Make sure you don’t get taken in by pensions scammers
The Financial Conduct Authority (FCA) is looking into claims that rogue pension advisers are aggressively targeting steelworkers at Tata UK’s plant in Port Talbot. Unscrupulous advisers may be targeting as many as 130,000 people, after widespread publicity about a deal to restructure their £15bn pension fund. David Prosser finds out what’s going on, and has a few tips for making sure you don’t fall victim to scammers yourself.
There’s a lot more, of course. Sarah Moore looks at how the war being waged by the government on the buy-to-let sector is taking its toll ; Simon Wilson asks what can be done about Britain’s “productivity puzzle”; and Matthew Lynn cheers the possible end of Angela Merkel’s reign in Germany.
There’s our usual pages of luxury spending at the back, too – Chris Carter looks at some some adventurous travel options in Queensland – Australia’s “Wild West”; we have eight of the best properties with music rooms on the market right now; and Matthew Jukes tastes a “celestial” Australian red.
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