In this week’s MoneyWeek magazine, we look at how income-focused investors can make money in a world of flat-lining interest rates; Merryn talks to economist and commentator George Magnus about China; and Natalie Stanton explains how to stop rogue tenants from running off with your house.
You can find out a little more by reading on, but for the full story sign up for MoneyWeek magazine now.
The 5% solution
Interest rates in the UK have never been this low. For over 300 years, the lowest they got was around 2%. Since the financial crisis, they’ve slumped to 0.5%. And many financial experts don’t think they’ll get above 2% for at least another 30 years.
So if you’re relying on a decent return from your investments to fund your retirement – and with the new “pensions freedom” that’s something we all now have to think about – you’re going to have to find ways of making your money work an awful lot harder. That’s where David Stevenson comes in.
David’s a regular MoneyWeek contributor who’s joined our sister publication, Lifetime Wealth, as an income specialist. And in this week’s cover story, he explains how, by accepting a little more risk, you could spin a 5% return from your pot.
David thinks 4%-6% is a “sensible level of reward for an investor who is willing to take calculated risks and to do the hard work of understanding their investments”. And he suggests one investment that would make a robust addition to any income portfolio.
Beware of the dragon
Another thing on the list of subjects to be concerned about is China, “something people seem bizarrely less worried about now than they were only a few months ago”, says Merryn Somerset Webb.
This week, she talks to economist, consultant and author George Magnus to get his views on China. To the untrained eye, China looks like it has stabilised, he says, but that’s because it is in the middle of a massive credit boom. “If this continues, China is going to have a huge financial problem”, says Magnus. Add to that an overvalued currency, and China could see a deflationary shock that would threaten the global economy. Chinese stocks are not somewhere he’d be putting his money right now.
Income from extraordinary shares
Most people, when talking about stocks and shares, mean common stocks. But they’re not the only options. And in his investment strategy column this week, Matthew Partridge looks at some of the more exotic classes of shares available to investors.
“Arguably the most interesting – particularly for income investors – are preference shares”, says Matthew. They’re issued mainly by financial groups, and they have some peculiar characteristics. Find out how they work with sign up for MoneyWeek magazine now.
Big tobacco’s last stand
In the latest legal blow against the tobacco firms, cigarettes in the UK now have to be sold in plain packaging, with no branding allowed at all, after the High Court upheld an earlier ruling. Alex Williams looks at what this means for tobacco stocks and asks – is it time to sell? Plus, as usual, he rounds up the latest crop of share tips from the British press.
How to steal a house
You might think having your house stolen is impossible. After all, as Natalie Stanton says, “nobody can pick it up and run away with it”. But they don’t have to, as journalist Max Hastings’ wife found out last year when the west London property she was renting out was “sold” to a cash buyer for £1.35m. It was only at the last minute that “the Land Registry smelled a rat and declined to register the sale”, says Natalie. She explains how it was done, and the steps you can take to avoid it happening to you.
Elsewhere, Natalie looks at the eye over Pensions Bill announced in the Queen’s Speech – and what its key measures mean for you and your retirement.
In her personal finance pages, Sarah Moore delves into the surprisingly expensive world of weddings and explains how you can keep a lid on the costs.
In his City View column, Matthew Lynn warns banks against complacency as upstart “fintech” companies – peer to peer lenders, app-based financial providers and the like – eat in to their markets.
And in our investment briefing this week, Simon Wilson reports on the crisis engulfing America’s middle class as incomes fall and life expectancy worsens.
Plus, book reviews, news and views from the world of finance, and five pages of travel, property and toys. What more could you want? sign up for MoneyWeek magazine now.