DIY Investor Magazine 24: Seeking certainty in the face of unknown unknowns

Sitting at home in your pants, trying to ignore the siren call of the fridge, it’s tempting to think that this is it – El Gordo; things have never been this bad and will never be the same again.

That is until, in a slack moment, you quiz Dr Google on ‘pandemics’; with the death toll from COVID-19 currently at 185,000 see how that is dwarfed by the 35m that have been taken by HIV and the 50m that succumbed to Spanish Flu in 1918.

He may have borrowed it, but Sir Winston told us that ‘those who fail to learn from history are condemned to repeat it’ but it’s deuced difficult; the ghastly ills that I now know something of had differing origins, and different modes of transmission.

When the economy ground to a halt overnight as we went into lockdown, the reaction was the collapse of asset prices – the FTSE 100 gave up 35% of its value in a month.

But we’ve been here before – over Black Monday and even blacker Tuesday, the FTSE dropped by 23% in just two days; then the Dotcom Bubble burst, and along came the Global Financial Crisis.

At first glance, there may be few common threads, but at a high level there is often reckless and questionable behaviour; whether it is allowing a virus to jump species, or markets be trashed by greed and malpractice.

‘people are taking personal control of their finances like never before’

In such circumstances people feel generally powerless to respond and protect their families; that has led to one of the positives to come out of the current crisis – the fact that people are taking personal control of their finances like never before.

DIY investing platform EQi (formerly Selftrade) reported account openings in the month of March up 221% versus March 2019; year to date, account openings are 129% better than 2019, trade volumes up 40% compared with February, and 75% higher year on year. More here

This is a trend that has been witnessed across the whole gamut of brokers and wealth and investment managers as people placed in a parlous position through no fault of their own seek to remove future uncertainty and take control; a disproportionate number of younger people are taking to investing for the first time.

The self-employed have been hit particularly hard, but most would have been far better placed to weather the storm with a nest egg to tide them over until state support arrived.

DIY Investor was founded on the belief that financial self-reliance will necessarily replace state support as people facing tuition fees, the high cost of accommodation and the uncertainty of healthcare and pension provision adopt the hands-on approach we see across the Pond.

With improved levels of financial education and access to good information, we believe that many more people can feel the sense of empowerment and liberation that comes with being in control of their finances.

In that, we have found a kindred spirit, and we are pleased to confirm that forthwith DIY Investor Magazine (incorporating Focus on Funds) will be published in association with EQi as we seek to engage and empower the next generation of investors reached by the wider Equiniti Group.

At some point we’ll be let free and markets will rebound; when it all comes around again a very large number of people will have the comfort of knowing where their money is, and that they are invested for the long term.

Stay safe

 DIY Investor Magazine 24

click to view

• Seeking certainty in the face of unknown unknowns
• Catching the flight to quality
• You see who’s swimming naked when the tide goes out
• COVID-19: The outlook for dividends in 2020
• EPIC for income
• ESG: Sustainable financial returns for long-term growth
• How is the economy going to bounce back
• Holding on tight
• Investing Basics: What are bonds?
• DIY Investing: How to construct an equity portfolio
• Let’s finally consign ‘boom and bust’ to the history books
• An investor’s most powerful weapon is patience
• Children of the revolution
• Every bear market has its own distinguishing features
• Investing Basics: Income investing 101
• Past the first inflection point in consensus earnings estimates