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Denver’s Monaco Inn Restaurant closing after nearly 40 years

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Reflecting on his nearly 40 years of business, Mike Tsikoudakis spoke slowly and carefully, with a tear in his eye.

“(I’m) grateful forever,” he said about his customers. “They’re always going to be in my heart. And I’m going to miss them, but it was time for me to move on.”

Tsikoudakis, 72, and 68-year-old business partner Terry Vaidis are retiring and selling their Greek eatery Monaco Inn Restaurant at 962 S. Monaco St. Parkway. They opened it in 1986.

Pomodoro Pizza and Pasta, an Italian restaurant just across the Aurora border near Lowry, will be taking over the space for a second location, potentially as early as the month’s end.

“I just felt like (it was) my own dining room,” Tsikoudakis said.

Many years ago, he was a 16-year-old kid from Crete, a large island south of mainland Greece, visiting Denver on his uncle’s dime. His life became firmly intertwined with the city and the country from that point on, finding work in restaurants around town. Never as a chef, but as a bartender and manager.

Tired of shifting from job to job, he heard of an empty restaurant for sale and purchased it for $50,000.

“When we first opened, my gosh. I mean, I think one drink was $2.50,” Tsikoudakis said.

Steaks were $9, a gyro was $6. Now, those items cost $27 and $15.

Boulder Ash House student apartments free of building code violations

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Boulder officials announced Friday that the Ash House, a private student housing building on University Hill, is free of building code violations that could jeopardize tenants’ safety.

The Ash House, at 891 12th St., made headlines last month after city workers told the roughly 60 student residents to vacate their apartments immediately, citing critical safety concerns. The city made the move after learning that the landlord had done new construction, wiring and other work inside the building without permits.

The building was permitted for 16 three-bedroom apartments and a total of up to 48 residents, but the landlord added new walls and partitions to create four or even five bedrooms in some units. New electrical work had been done, too.

City officials have said some of the new rooms within the apartments did not have smoke detectors and that the new walls blocked access to fire sprinklers. The added rooms also reduced the shared living space for residents, which created further safety risks.

Boulder appeared poised for a legal battle with the landlord, who sued over the city’s decision to kick the students out of their homes. At a court hearing on Sept. 20, a judge ruled that, while the code violations in the building were serious, there was no immediate threat to the student tenants, and they were allowed to stay in the building for the time being. Meanwhile, the property owner and the city agreed to work together to bring the property into compliance with city code. Another court hearing was tentatively set for Tuesday.

According to a city news release sent out Friday, the landlord has “expedited addressing building code violations and restoring the property to its approved condition,” and there are no longer life-safety code violations in the building.

Tech startups innovate to snuff out wildfires

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TWAIN HARTE, Calif. –This is the tinderbox of the Sierra Nevada. It’s early June, the temperature is 97 degrees Fahrenheit and the air shimmers over dead trees choked in brush. In the Stanislaus National Forest, logging roads wind through firs and ponderosa pines, past 20-foot-tall burn piles — tons of scrap wood not worth bringing to a sawmill. They’ve been assembled by workers on the front line of the fight against forest fires: a timber crew thinning these woods for the Forest Service and a tech startup that’s trying to automate the enormous machines the crew relies on.

They are called skidders: 10-foot-tall vehicles on four massive wheels, with a bulldozerlike blade on the front and a tree-size grapple dangling from the back. They are the worker bees, hauling downed logs from the forest to landing sites, where they are delimbed and loaded onto trucks bound for the sawmill. Usually, a single driver operates them for a 12-hour shift, grabbing logs from behind and then driving forward.

Engineers at the Sonora, California, startup Kodama Systems, a forest management company, have hacked into a skidder built by Caterpillar, studded it with cameras and radar, and plugged it into the internet. The result is a remote-controlled machine that does scut work for a timber crew and teaches itself to operate semiautonomously, using lidar — or light detection and ranging — to map the forest.

Kodama has raised $6.6 million for a business that is driven by the reality that much of our forestland these days is stuffed with fuel just waiting to ignite. A few hundred miles from Stanislaus, a man drove a flaming car into a ditch in early August and started the Park fire, which burned an area larger than Los Angeles.

What happens if you set a region full of technology entrepreneurs and investors on fire? They start companies. Dozens of startups, backed by climate-minded investors with more than $200 million in capital, are developing technology designed to tackle a fundamental challenge of the warming world.

Kodama founder Merritt Jenkins was an engineer looking for a problem to solve when he moved to Twain Harte, California, two years ago to understand the timber industry. (The town is named in part after Mark Twain, who said he accidentally ignited his own Sierra timber claim in the 1860s.)

For years the response to wildfires was simple: Put them out. But this strategy has unnaturally stockpiled biomass — a catchall term for trees, brush and grass — in California forests. In recent decades, foresters and firefighters have realized that battling wildfires requires “treating” their fuel in advance: thinning forests and underbrush with mechanical tools and controlled — or prescribed — burns, a practice long advocated by Indigenous communities.

“There’s been a huge leap in the last five years,” said Stanford conservationist Esther Cole Adelsheim.

There’s just one problem: “There aren’t enough hands,” said Kate Dargan, a former CalFire chief and entrepreneur who now works on wildfire resilience for the Gordon and Betty Moore Foundation. “This is not a high-paying industry, it’s a hot, dirty, hard industry … where technology can help assist human production capability, it’s really important.”

If Kodama’s vehicles work as planned, they could multiply existing efforts. The near-term plan is to allow one operator to drive two skidders at once, and to run a second shift at night. In June, Jenkins showed how to operate the skidder from an employee’s home miles from the logging site; weeks later, he said he ran it from London.

Startups addressing climate change

Bill Clerico is trying to make fire tech happen. In 2008, he was a founder of the payments app WePay as a Boston College student, and sold it to JPMorgan Chase in 2017 for about $350 million. He used some of the spoils to buy a home in the redwood forests of Mendocino County, and, with the 2018 Peach fire, was given a rude introduction to wildfires. In the smoldering year of 2020, Clerico volunteered with the local fire department, directing traffic in the woods and mulling investments in technology to respond to climate-change-amplified infernos.

The complexity of the problem reminded him of the early days of fintech, when government rules and entrenched banks scared off many entrepreneurs until early entrants like his firm and bigger rivals like PayPal and Block carved out multibillion-dollar businesses.

Humanitarians enlist entertainers and creators to reach impassioned youth during United Nations week

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By JAMES POLLARD, The Associated Press

NEW YORK — A lively discussion broke out backstage during Climate Week NYC between a TikTok comedian, a buzzed-about actress, a Latin cuisine entrepreneur and a cooking content creator.

Convened by World Food Program USA to educate the panel’s audiences — over 1.8 million Instagram followers combined — about hunger, the four weighed best practices for authentically breaking down weighty topics on social media.

“I want to force myself to be more active on TikTok,” said “ Avatar: The Way of Water ” star Bailey Bass. Users “have a thought, and they are talking on their phone, and they post it. It feels very palpable.”

“But how do you know this is true?” asked Manolo Gonzalez Vergara, who co-founded the culinary brand Toma with his mother and actress Sofia Vergara. “This is just a person talking.”

“But it’s someone you can relate with, so there’s a level of trust,” added Drea Okeke, a Nigerian-American engineer turned social media star with over 6 million TikTok followers.

The exchange underscored the questions faced by the humanitarian establishment as they try to reach younger, more environmentally conscious generations who — they routinely acknowledged throughout the many events unfolding this week alongside the United Nations General Assembly in New York — are tasked with digging the world out of the hole left by years of climate inaction.

Billionaire Microsoft co-founder Bill Gates acknowledged as much at a Q&A promoting his new Netflix show. “We have left some real challenges for this next generation,” acknowledged Gates, who runs one of the world’s largest philanthropic foundations.

Young people with large online followings can be good “placeholders” for older institutions seeking relevance with new generations, said Wawa Gatheru. The Kenyan-American activist regularly uses Instagram to promote Black Girl Environmentalist, the national community she founded to diversify the climate movement’s leadership pipeline.

But Gatheru cautioned against looping “any young person who is visible online as an influencer” or, alternatively, cheapening youth leaders’ expertise simply because they are active online.

“In order to do it well and effectively and not be tokenistic, it’s so important to see young people as collaborators, young people as capable,” she told The Associated Press.

How to make typing easier on the phone and leave the laptop at home

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With summer officially over, it’s back to business (or school) for many people, which can mean more time writing longer things, especially on the go. The smartphone has replaced the laptop for many tasks, but when it comes to text input, tapping away on tiny onscreen keys might make you wish you had hauled along the computer just for its keyboard. Thankfully, your phone includes several features to make text entry much easier. Here are a few suggestions.

Visit your settings

Thanks to predictive text prompts, automatic punctuation and other shortcuts (like pressing vowel keys to see the pop-up menu of accent marks), typing on small glass rectangles isn’t as awkward as it used to be. To find out what features are available for your phone, start with its Settings app.

On an iPhone, tap General and then Keyboard.

For many Android phones, tap System, Keyboard, On-screen Keyboard and then Gboard (often the default app). Galaxy models typically offer the Samsung Keyboard with similar options.

You should see choices for spell-check, text correction — yes, Apple’s infamous Auto-Correction has gotten better — and other aids. For example, both the Apple iOS keyboard and the Google Gboard (which has an iOS version, too) can display a compact keyboard for easier single-handed input.

On the Gboard keyboard, press and hold the comma key for a shortcut into the settings — or tap the four-squares icon on the far left and select the One-Handed button; the same menu lets you resize or “float” the keyboard around the screen if you prefer.

Password-manager tools prevent mistyped logins, and fewer taps may help to prevent errors elsewhere. With tools like Slide to Type from Apple and Glide Typing by Google, you can drag your finger around the keyboard and the software guesses the word you want; note that the results may vary.

The keyboard can move the text-insertion cursor, too. On an iPhone, press and hold the space bar until the keyboard dims, and then drag your finger to reposition the cursor on the screen. For the Google Gboard, you can move the cursor by sliding a finger along the space bar if the “gesture cursor control” is enabled in the Glide Typing settings.

Apple and Google include keyboard layouts for typing in languages other than English or inserting emojis. You can add third-party keyboard apps, but beware of software from unfamiliar companies that could pose security risks.

Add hardware

If you have a lot of text to enter, pairing your iPhone or Android phone with an external Bluetooth keyboard (including the Magic Keyboard made by Apple) lets you switch to traditional typing hardware. You can even use navigational buttons and shortcuts with an iPhone by going to Settings, Accessibility and Keyboards and enabling the Full Keyboard Access feature.

If you don’t want to haul a full keyboard around, consider a folding model, as it can fit easily in a jacket pocket but expand into something resembling a full-size set of keys.

Traveling keyboards, which typically fold up into two or three sections when not in use, range in price from about $25 to $80 depending on the size and features.

Speak your mind

Speech-to-text technology that converts the spoken word into editable type on the screen has been around for decades and has only become more accurate as the software has improved. Many apps (including virtual assistants) can take dictation. The Apple Notes app in iOS 18 can now directly record a live audio file and transcribe it.

To use the feature on an iPhone, open Settings, select General and then Keyboard, and turn on Enable Dictation. The Auto-Punctuation option automatically inserts commands, periods and question marks as you talk, but Apple’s site has a full list of dictation commands for editing text and inserting emoji characters.

McDonald’s will roll out a chicken version of its Big Mac this month

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McDonald’s is bringing a chicken version of its Big Mac sandwich to the U.S. for a limited time, the company announced this week.

The sandwich, which replaces the traditional two beef patties of a Big Mac with two tempura-battered chicken patties, will be available at participating restaurants starting Oct. 10 “while supplies last,” the company said. The chicken Big Mac has made an appearance on menus abroad, but this will be the menu item’s first entree into U.S. restaurants.

The announcement comes as Chicago-based McDonald’s continues to put a focus on chicken. During a second-quarter earnings call in July, CEO Chris Kempczinski said the company’s chicken sales were now on par with beef sales. Kempczinski said the fast-food giant was committed to “growing share in areas like chicken.”

McDonald’s, like other fast-food and quick-service chains, is struggling to get customers to keep opening their wallets as they pull back from discretionary spending.

The company’s global same-store sales fell for the first time in nearly four years during the second quarter, when they dropped nearly 1% in the U.S. The company’s net income fell 12%.

Five top dividend hero investment trusts for your Isa

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Banks and building societies should be rushing to beat each other’s cash Isa rates – instead the only race appears to be to the bottom.

Welcome to Isa season 2017, where NatWest genuinely has a countdown clock warning there’s only 21 days, six hours and 26 minutes to get a cash Isa with a 0.01% interest rate.

In this environment, it’s no surprise that the Minor Investor’s purely anecdotal sentiment index has found more people are considering investing to beat appalling savings rates.

Holding out for a hero: The Dividend Hero list features those investment trusts that have the longest track records of increasing payouts each year

The trade-off for the prospective returns on these trusts being higher than on cash, is that one day you may open your investing account and discover less than you put in.

If this is a problem, then don’t invest. Money that you might need in its entirety in the short-term, perhaps if the boiler packs up, or for a house deposit, shouldn’t be invested.

If you can live without the cash for a good while though, then you might want to consider one of these trusts.

The five I’ve dug out all have a decent dividend that’s likely to keep rising – so as not to spoil those long-term records – and four of them can be bought for less than the sum of their parts.

I’m considering sticking a few in my own Isa, but if you think about investing make sure you do your own research because they may or may not be right for you. 

FIVE DIVIDEND HEROES: WITH FOUR ON A DISCOUNT 
Company Consecutive years
dividend increased
Premium
/ Discount
Ongoing charges Ten-year total return Yield
City of London  50  1.1% 0.43% 122.2% 3.9%
Murray Income 43 -8.4% 0.77% 74.5% 4.2%
Merchants Trust 34 -4.5% 0.58% 72.5% 5.1%
Temple Bar 33 -3.8% 0.49% 128.2% 3.2%
Schroder Income Growth 21 -8.3% 1.01% 111.7% 3.8%

Five dividend hero picks 

These are five investment trusts from the full dividend heroes list that looked interesting and worth further investigation for those looking for Steady Eddie income investments.

The criteria for choosing them was a blend of a dividend yield that broadly matched or beat the FTSE All-Share’s 3.4 per cent yield and decent long-term performance over ten years. Four offer the ability to buy on a discount – although this should never be reason alone to invest – while the other trust City of London has a record that justifies its slight premium.

If you are considering investing, look for more information on the trusts on the AIC website and read their factsheets and annual reports that can be found there. Also consider how any investments fit into your overall portfolio and investing plan.

This quick look at the trusts is from my point of view as a private investor and journalist, if you need help investing seek professional financial advice.

City of London 

City of London is the king of the dividend heroes. It is one of the trio of investment trusts with the longest history of raising payouts, boasting a 50 year record. Unlike fellow half-centurions Bankers and Alliance Trust, however, it has a stock market-beating yield (the other two yield 2.2 per cent and 1.8 per cent and are global not income trusts). Five-year average dividend growth is 3.3 per cent annually and the reserves hold 70 per cent of a year’s dividend cover.

It has been managed by Job Curtis since 1991, with that 26-year stint a remarkable run in itself. Despite his strong stock-picking record, Curtis is a modest manager who has displayed real commitment to his investors over the years (and the board has cut charges for them too). 

The trust trades at a slight premium of 1.1 per cent, but is in this list due to its 50-year dividend-raising history and ten-year total return of 122 per cent, which comfortably beats the FTSE All-Share’s 83 per cent total return over that period. Ongoing charges are just 0.43 per cent. Disclosure: This is one that’s already in my Isa.

Murray Income 

Firstly, Murray Income trust is not to be confused with Murray International, the global trust managed by contrarian Bruce Stout. It is still worth a look, however, as it offers the chance to pick up an investment trust yielding 4.2 per cent, with a 43-year long history of raising dividends at a discount of 8.8 per cent to the sum of its parts.

So why is the share price trading so far below the net asset value when people are hungry for income? Firstly, it’s worth noting that the trust hasn’t performed as well as the broad UK stock market. Murray Income has a total return of 74.5 per cent, compared to the FTSE All-Share’s 83 per cent over ten years. It sits about halfway down the performance list for UK equity income trusts over a decade. Dividend growth has been good but not stunning over the past five years at an average of 1.6 per cent.

However, the trust has 1.3 years worth of dividend cover, yields more than the sector average of 3.6 per cent and with a relatively focussed portfolio of 49 stocks and an active share of 62.4 per cent it is no closet tracker. Among the top 20 holdings are some interesting non-traditional UK income names, such as Nordea Bank, Microsoft and Close Brothers. Managers say they look for ‘diversified earnings streams, strong balance sheets and superior business models with attractive valuations’ to deal with uncertain times ahead.

Merchants Trust 

Merchants Trust is in here as its yield is a bumper 5.1 per cent and it can be bought at a 4.5 per cent discount.

So, once more, why the discount?  Merchants has also failed to beat the FTSE All-Share over ten years, with a 72.5 per cent total return to the market’s 83 per cent. It has also raised the dividend by an average of just 0.8 per cent over the past five years. However, it has dividend cover of 0.93 years in the reserves.

Long-standing manager Simon Gergel has pointed to the trust out-performing the stock market over the past five years and its unashamed income focus. He told Mail on Sunday’s Jeff Prestridge: ‘We are income seekers and we make no apology for buying shares that provide the high yield we require. It’s why so many private investors hold the trust.’

The trust has 46 holdings and ongoing charges of 0.58 per cent, but investors should be aware that it does used borrowed money to try to boost returns, with a relatively high gearing figure of 18 per cent. You need to decide if that big yield is enough.

Temple Bar 

Temple Bar has the best ten-year record of the five trusts highlighted here, with a 125 per cent total return to the FTSE All-Share’s 83 per cent.

It is managed by noted contrarian Alastair Mundy, a value investor who looks for cheap, out-of-favour companies, with decent balance sheets. On its website, the trust sums up its contrarian approach: ‘We aim to be sceptical of the crowd and aware of investor psychology, which often leads to an overvaluation of those stocks that are deemed to have good prospects and an undervaluation of those which are out-of-favour.’

Temple Bar had been trading at a hefty discount of as much as 10 per cent last year, but this has narrowed to 3.4 per cent now. Five-year dividend growth is at a healthy 2 per cent annual average, the trust has gearing of just 3 per cent and ongoing charges for this level of active management are cheap at 0.49 per cent. This is one I wish I’d tucked away when the discount was deeper.

Schroder Income Growth

Schroder Income Growth has delivered the third best ten-year total return here at 112 per cent, compared to the FTSE All-Share’s 83 per cent. It yields 3.8 per cent, has 0.97 years of dividend cover, and has average five-year dividend growth of 2.8 per cent. Yet, it is on an 8.2 per cent discount.

Those figures make it interesting. Fund manager Sue Noffke holds 44 stocks and the top ten includes a lot of the FTSE 100 usual suspects and the trust’s biggest exposure is 33 per cent to financial stocks, with HSBC making up 6 per cent, Lloyds 5 per cent and Aviva 4 per cent.

The trust says it has a ‘strategy of blending higher-yielding shares, providing steady income, with lower-yielding shares that offer the potential for faster-growing dividends.’

Further down the scale holdings include housebuilders Bellway and Taylor Wimpey, retailer Halfords and software firm Micro Focus International.

Ongoing charges are hefty at 1.01 per cent compared to the other trusts here, consider whether it’s worth paying those fees for the trust.

Should you open a Lifetime Isa? What’s on offer to savers

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Lifetime Isas allow under-40s to save for a home and retirement at once, and the Government is offering free top-ups worth up to £32,000 if you max out your fund during your younger to middle-aged years.

That sounds like a big giveaway, but these Isas have sparked a barrage of criticism, amid fears younger savers could make poor financial decisions and be left out of pocket in the longer run.

Watchdogs have insisted on robust safeguards, including making providers issue risk warnings before accounts are opened.

We look at how Lifetime Isas works, what types of products are available, and their benefits and pitfalls.

Ros Altmann: ‘This product is masquerading as a pension, and will confuse workers who may opt out of much better workplace pensions’

‘One, saving for your first home? Lifetime Isa is the first choice for 18-40 year olds. The Lifetime Isa gives first time buyers a 25 per cent bonus of up to £1,000 a year towards getting on the housing ladder.

‘No other Isa offers as generous a government top up. The Help to Buy Isa offers a 25 per cent top up, but the maximum amount you can save is more limited and the bonus isn’t paid until completion of a property purchase.

‘Second, saving for retirement? Look at a workplace pension first. A Lifetime Isa can be used to save for retirement, however a workplace pension should be the first port of call to pick up valuable employer pension contributions.

‘Third, consider transferring your Help to Buy Isa to a Lifetime Isa. The Lifetime Isa offers higher contribution allowances, the option to build a bigger deposit by investing rather than just saving in cash, and a more immediate bonus payment, all of which suggest the Lifetime Isa is the preferable option for investors in the target age range.’

Paul Waters, partner at pension consultant Hymans Robertson, said: ‘The best long-term savings vehicle for retirement is the pension and people should stick with that. But the Lifetime Isa would help get people in the savings habit.’

He went on: ‘People can withdraw funds for a house deposit and continue to invest for long term retirement saving. Our view is this will not be common behaviour, certainly for the employed who have a workplace pension option.

‘Most people buying their first home will take all of the saving to help fund the deposit, and if your sole saving purpose is then retirement saving we would expect people to use a pension product instead.’

But Waters added that the biggest danger with almost any financial product with a long term duration, which you see time and again, is that people make their decisions about it at the outset, but market conditions and personal circumstances change.

People then don’t get any ongoing guidance or support, and so just carry on for years, perhaps putting away £50 a month when it no longer makes financial sense, he explains.

Waters noted that while the Financial Conduct Authority has decided Lifetime Isa providers must issue risk warnings – which he commended as both proportional and helpful – most of the problems that develop will do so over time and so they won’t address that.

Longfin loses more than a third of its value after it gets boot from Russell 2000

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Longfin loses more than a third of its value after it gets boot from Russell 2000

Source: LongFin

Shares of Longfin plunged for a second straight day after FTSE Russell said it would remove the stock of the small, cryptocurrency play from the benchmark Russell indexes.

How to invest in the stock market using funds

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Stock market investment can seem scary and complicated, particularly if you have only ever used ordinary savings accounts at banks and building societies.

But if you’re saving for more than five years, for example for retirement, you’ll be missing out on huge returns by keeping your money in cash.

Need convincing? If you had put £15,000 into the average savings account a decade ago, your money would have grown to just £15,478 — a return of 3.2 per cent in total.

If you had invested the same amount into the FTSE All Share index, you would have almost doubled your money to £29,713, according to calculations by investing firm Fidelity.

If you had put £15,000 into the average savings account a decade ago, it would have grown to £15,478. The same amount put into the FTSE All Share index would have grown to £29,713

So today, Money Mail’s must-read Spring Clean Your Finances series will show you how to master the stock market.

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HOW THIS IS MONEY CAN HELP

How to find and compare the best online broker or DIY investing platform

THE SECRET STRATEGY

Most inexperienced investors have three big fears: what if a sudden stock market crash destroys my nest egg? Which shares should I pick? When should I buy and sell?

Do not panic. You can beat all these potential pitfalls with a simple trick. It’s used by all the pros and if you follow the rules, you’ll not go far wrong.

The secret is this: invest regularly in a range of funds managed by a stock-picker with proven expertise and ignore the ups and downs in the market. Here we explain the method in three simple steps.

STEP 1

Work out how much you have in savings, what you can afford to put aside and how long you’re investing for. 

If you don’t feel you can invest the money for at least five years — or can’t face the prospect of being left with less than you started with — investing isn’t for you. You’ll find heaps of information about less risky savings accounts on the following pages.

The funds you must dump now 

Tinkering too much with your investments is never a good idea. The experts say you are likely to do more harm than good by chopping and changing your fund selections every year.

But keep an eye out for serial under-performers — and be ruthless when the time comes. Investment website Bestinvest publishes an annual list of ‘dog’ funds that are failing to keep up with their rivals.

The largest fund on its list this year is Aberdeen Asia Pacific Equity, which controls nearly £1.3 billion of savings and has grown by 5.5 per cent over the past year. 

hl

The UK-focused funds in its report include Aberdeen UK Equity, which has lost 1.52 per cent of its value over the past year, and Aberdeen UK Equity Income, which is down 6.4 per cent in that time.

Among the worst-ranked global funds were Templeton Growth, down 0.52 per cent in a year, which has returned 2.53 per cent over the past 12 months.

Generally speaking, experts say you should give fund managers at least three years to prove their mettle against their rivals, as all professional stock-pickers are prone to temporary dips in form.

STEP 2

Next, set up a direct debit for the same amount each month going into a fund supermarket.

Companies such as Hargreaves Lansdown, AJ Bell and Bestinvest let you set up regular investment plans from as little as £25 a month.Each month your money is spread across your chosen funds.

Drip-feeding your investments is better than bunging in a lump-sum every now and then, as it minimises the chance of you making a bad decision. Trying to time the market is almost always a mistake.

Fidelity estimates someone who invested £1,000 in the FTSE All Share 30 years ago but missed the ten top-performing days because of bad investment decisions would now have £7,215.

But if you had just left your money in the stock market the entire time it would have grown to £13,491.

Having a regular plan means you still invest money when the market falls, so you buy more shares when they are cheap and fewer when they are more expensive, which boosts returns long-term.

How to create an investment plan

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Do you invest? The fact that you are reading This is Money greatly increases the chance that you do.

What’s less likely is that you have an investment plan.

And by that I mean a clearly defined plan of what you are investing for and how you plan to do it.

Work out your monthly spending from mortgage, to childcare and food shopping

Consider how much risk you are willing to take

Risk is a difficult concept to get your head round when investing. Yet, in reality, we take and calculate risks all the time and so are capable of weighing them up.

Being entirely risk averse isn’t a good thing. You would never learn anything new without taking a risk and sometimes you consider them worth taking in order to achieve your goal, whether that’s getting a new job, visiting a new place or riding a bike.

Some people are more comfortable taking more risk than others, however. And some people can afford to do so, thanks to failure having a lesser impact on them, or other options they may have to fall back on.

Examples of this are that you might have a steady job with a good salary, lots of equity in your home, or a whole life of earning ahead of you. 

Risk needs to be considered alongside your time horizon – the longer you have to get to a set point the less risk you might need to take to get there, similarly if you are racing too quickly to a certain goal you may take on too much risk and be in danger of crashing.

You need to work out where you stand and reflect on your own behaviour and risk appetite.

In its guide to getting an investment plan, Vanguard says: ‘Different types of investments fall all along this risk-reward spectrum. No matter what your goal is, you can find investments that could help you reach your goal without taking on unnecessary risk.’

Work out your investing strategy

Working out your strategy involves combining what you want, how much you have, and the risk you are willing to take to come up with a coherent plan.

Even if you have put in the legwork on the other bits of the investment plan, this is likely to be where you come unstuck.

That’s because it would be very easy here to get bogged down in the ‘what am I actually going to invest in’ element of planning.

However, that isn’t what you are doing here. This strategy part of the simple investment plan is about working out how you will use the money you have, to get to where you want to be, by taking as little risk as possible.

Free investing guides

You can leave picking individual funds, investment trusts, shares or ETFs to another day.

This is the part where you think about whether you will be investing a lump sum or regularly, or a mix of both. 

You need to consider how often your regular investments will be and how you will automate this as much as possible, so as to avoid failing to make them yourself.

Your strategy should include an idea of whether you will keep investing through slumps in the market and some reading on why this may be a good idea. 

There is an alternative route but it involves working out a system to decide when to get in or out and perfecting market timing – something investors find notoriously difficult to get right, with behavioural studies showing we tend to sell low and buy high.

The strategy should also involve a consideration of asset allocation and how much you need to hold in safer low-risk assets, such as cash, or bonds, versus what you hold in higher risk but potentially higher reward assets, such as shares.

You should do some thinking about active or passive investment here and whether to choose one or a mix of both, you should also think about tax-friendly investing in an Isa or Sipp – and which may be better for different pots of money.

You also need to do some thinking about investment costs (something that unlike performance you can control) and where you invest. Read our guide to the best DIY investing platforms to get some ideas.

Make sure your strategy suits you – otherwise you probably won’t stick to it.

In his book The Best Investment Writing, Meb Faber includes a piece from investor Todd Tresidder, Five must-ask due diligence questions before making any investment.

He writes: ‘Investment success is a lifelong process, and humans aren’t robots. The only way you’ll stay the course long enough to succeed is when your investment strategy fits your interests, skills, goals and resources, thus providing emotional satisfaction.

‘There are many ways to make money investing, but I recommend you find the one or two that are going to work for you, and not get diverted by all the rest. You must stay the course long term until you succeed.’ 

What next?

Once you have got this all down on a piece of paper, you can then start thinking about the actual investments that will get you there.

That is a topic for another article – and one that we cover regularly on our Investing, DIY Investing and Index Investing channels – but with your investment plan sketched out, even if it isn’t in great detail, you will have a better idea of how to work out if those investments fit you.

I’d also recommend doing some further reading. Some good well-written and straight-forward UK-focussed books on investing are:

Andy Bell, The DIY Investor

Mark Dampier, Effective Investing

Lars Kroijer, Investing Demystified (A good read for passive investing)

You should also read around some of the more thoughtful investing websites, a personal favourite of mine is the Monevator blog.

Some other This is Money resources that you may find helpful are our regular Investing Show videos, our 50 best funds round-up, and our free How to be a Successful Investor guide.

ISA INVESTING TIPS: Emerging market funds and investment trusts

0

If you want emerging market funds to add some worldwide flair to your investments, read This is Money’s experts’ recommendations.

From
the bafflingly wide range, they have picked some ideas to use as
starting points for what will hopefully be successful investing.

Of

course, which fund is best for you depends on your individual
circumstances and what investing story you think will unfold. So, always
do your own research, choose your investments carefully and hopefully
you will make your own good investing luck.

On the up: Emerging markets such as Brazil are where much of the world’s growth is expected to be over future years.

How to use our fund and investment trust ideas

This is Money asks our panel of experts to suggest investments for a variety of investors.


These are people with a long
history in the investment field and looking at their choices gives you
some pointers. But remember, these are just ideas and whether a particular fund is right for you is your own
decision and making that requires deeper research.

Their
ideas are suitable for investors opting to use an Isa wrapper or not.
Go to the bottom of the page to find out why we like investing through
an Isa.

Read the tips, follow the links to the funds’ performance and read This is Money’s Investing section to gather ideas. If you have any doubts, talk to an IFA [find an adviser].





Why emerging markets?



Emerging markets is a broad term. It can cover everything from big hitting China and Brazil, to up-and-coming Indonesia and onto the new investing frontiers of Africa.


The lure for investors is greater growth and younger economies than typically found in the developed West and emerging markets have delivered strongly on this over the past decade.


The trade-off for this growth is higher volatility and more risk. Emerging markets investments tend to get punished in the short-term when turbulent times hit, in the long-run though they are tipped to outperform.


Many investors consider emerging markets funds an essential part of their portfolio, but experts say they would be very wise not to stick their house on them.


The case for emerging markets is that these strong growth economies are one of the best long-term bets around, especially for those making regular investments using their annual tax-free Isa allowance.


But remember emerging markets success is not guaranteed and never put all your eggs in one basket. It is also worth remembering that risk varies throughout this broad category, an overall emerging markets fund will be spread across a variety of countries and continents, others are region, country or sector specific.

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The expert’s emerging markets fund ideas

Damien Fahy of MoneytotheMasses.com recommends:  Jupiter India

Ongoing charges: 1.09 per cent

Yield: 0.10 per cent

He explains: ‘While India hasn’t been immune to the negative sentiment surrounding emerging market equities it has fared better than many of its peers. In addition, Indian equities are not tightly correlated to either developed or emerging market equities.

‘This is in part a result of the sweeping changes that have occurred in India’s political and financial system over the last 2 years, thanks to Narendra Modi’s majority pro-growth Government. India’s politics have historically been a messy tangle of inter-state politics with each elected State historically putting self interest over national unity

‘Modi has tackled this by giving individual Indian states more autonomy which has led to states wanting to be more competitive, particularly for foreign investment, rather than being merely obstructive. If you go to any major UK airport, such as Heathrow, you will now see billboards from individual Indian states claiming to be an ‘investor’s paradise

‘Reform is never easy, but as the pace of reform accelerated so too did the Indian stock market. Still, the pace of reform has not been fast enough for some.

‘While other emerging markets have struggled with commodity prices, particularly the fall in the price of oil, India is different. India imports 80% of its oil, so is unlike other emerging markets that are net exporters rather than importers. Analysts estimate that if oil stays below or around $50 a barrel it will boost economic growth by 1% a year (India’s economy currently grows at an eye-watering rate of around 7.5% a year).

‘Clearly investing in India is an indirect bet on a low oil price given its position as a global consumer rather than producer. If you believe the price of oil is about to rocket then clearly you wouldn’t necessarily want to be left holding Indian equities.

‘Investors wanting direct exposure to Indian equities could look at Jupiter India. Those investing must be comfortable with volatility, which is greater than some its peers due to it investing across the market cap spectrum, and also have a long term view.’


Adrian Lowcock, head of investing for Axa Wealth, highlights: JPM Emerging Markets Income

Ongoing charges: 0.93 per cent

Yield: 5.6 per cent

This fund invests in shares of emerging market companies. Big regional exposures include Taiwan, South Africa and Hong Kong.

Mr Lowcock says: ‘Manager Richard Titherington’s focus is on the future, where earnings and profitability will be in five years’ time, not currently. He holds between 50 and 80 companies with about 60 per cent invested in companies that yield 3 per cent and can grow their dividends, 20 per cent in low yielding companies with significant potential to grow their dividends and the remaining 20 per cent in high yielding companies with dividends over 6 per cent. This diversification means the fund is able to deliver a combination of an attractive growing dividend and capital growth. 

Adrian Lowcock, head of investing for Axa Wealth, also highlights: Fidelity Emerging Markets

Ongoing charges: 1.1 per cent

Yield: 0 per cent

This fund invests in companies listed or operating in a number of emerging markets.

You will find investments in India, South Africa and companies listed in the United States, but conduct business in emerging markets.

Mr Lowcock says: ‘This fund is a best of breed portfolio with a concentrated fund. Manager Nick price focuses on investing in good companies at the right price. He is looking for companies able to deliver strong growth and higher return on investment. Price has favoured South Africa and Sub-Sahara where he sees clear growth opportunities as the region develops. This fund is more suitable for investors willing to take on risk as it is likely to be more volatile.’

 

Darius McDermott, of Chelsea Financial Services, highlights Lazard Emerging Markets

Ongoing charges: 1.08 per cent

Yield: 2.1 per cent

This fund looks for the ‘global brands of tomorrow’ in emerging markets.

It has regional exposure to Asia, Latin America, emerging European markets and Africa.

Mr McDermott says: ‘Many leading global brands are now emerging market companies and this fund uses a 230-strong team of investment analysts to identify the global brands of tomorrow in these developing regions.

‘The managers take a bottom-up, stock-picking approach to achieve this and use market volatility created by macroeconomic concerns to time entry and exit opportunities. This strong value discipline has led to this being one of the stand-out funds in its sector.’

How to create an investment plan

0

Do you invest? The fact that you are reading This is Money greatly increases the chance that you do.

What’s less likely is that you have an investment plan.

And by that I mean a clearly defined plan of what you are investing for and how you plan to do it.

Work out your monthly spending from mortgage, to childcare and food shopping

Consider how much risk you are willing to take

Risk is a difficult concept to get your head round when investing. Yet, in reality, we take and calculate risks all the time and so are capable of weighing them up.

Being entirely risk averse isn’t a good thing. You would never learn anything new without taking a risk and sometimes you consider them worth taking in order to achieve your goal, whether that’s getting a new job, visiting a new place or riding a bike.

Some people are more comfortable taking more risk than others, however. And some people can afford to do so, thanks to failure having a lesser impact on them, or other options they may have to fall back on.

Examples of this are that you might have a steady job with a good salary, lots of equity in your home, or a whole life of earning ahead of you. 

Risk needs to be considered alongside your time horizon – the longer you have to get to a set point the less risk you might need to take to get there, similarly if you are racing too quickly to a certain goal you may take on too much risk and be in danger of crashing.

You need to work out where you stand and reflect on your own behaviour and risk appetite.

In its guide to getting an investment plan, Vanguard says: ‘Different types of investments fall all along this risk-reward spectrum. No matter what your goal is, you can find investments that could help you reach your goal without taking on unnecessary risk.’

Work out your investing strategy

Working out your strategy involves combining what you want, how much you have, and the risk you are willing to take to come up with a coherent plan.

Even if you have put in the legwork on the other bits of the investment plan, this is likely to be where you come unstuck.

That’s because it would be very easy here to get bogged down in the ‘what am I actually going to invest in’ element of planning.

However, that isn’t what you are doing here. This strategy part of the simple investment plan is about working out how you will use the money you have, to get to where you want to be, by taking as little risk as possible.

Free investing guides

You can leave picking individual funds, investment trusts, shares or ETFs to another day.

This is the part where you think about whether you will be investing a lump sum or regularly, or a mix of both. 

You need to consider how often your regular investments will be and how you will automate this as much as possible, so as to avoid failing to make them yourself.

Your strategy should include an idea of whether you will keep investing through slumps in the market and some reading on why this may be a good idea. 

There is an alternative route but it involves working out a system to decide when to get in or out and perfecting market timing – something investors find notoriously difficult to get right, with behavioural studies showing we tend to sell low and buy high.

The strategy should also involve a consideration of asset allocation and how much you need to hold in safer low-risk assets, such as cash, or bonds, versus what you hold in higher risk but potentially higher reward assets, such as shares.

You should do some thinking about active or passive investment here and whether to choose one or a mix of both, you should also think about tax-friendly investing in an Isa or Sipp – and which may be better for different pots of money.

You also need to do some thinking about investment costs (something that unlike performance you can control) and where you invest. Read our guide to the best DIY investing platforms to get some ideas.

Make sure your strategy suits you – otherwise you probably won’t stick to it.

In his book The Best Investment Writing, Meb Faber includes a piece from investor Todd Tresidder, Five must-ask due diligence questions before making any investment.

He writes: ‘Investment success is a lifelong process, and humans aren’t robots. The only way you’ll stay the course long enough to succeed is when your investment strategy fits your interests, skills, goals and resources, thus providing emotional satisfaction.

‘There are many ways to make money investing, but I recommend you find the one or two that are going to work for you, and not get diverted by all the rest. You must stay the course long term until you succeed.’ 

What next?

Once you have got this all down on a piece of paper, you can then start thinking about the actual investments that will get you there.

That is a topic for another article – and one that we cover regularly on our Investing, DIY Investing and Index Investing channels – but with your investment plan sketched out, even if it isn’t in great detail, you will have a better idea of how to work out if those investments fit you.

I’d also recommend doing some further reading. Some good well-written and straight-forward UK-focussed books on investing are:

Andy Bell, The DIY Investor

Mark Dampier, Effective Investing

Lars Kroijer, Investing Demystified (A good read for passive investing)

You should also read around some of the more thoughtful investing websites, a personal favourite of mine is the Monevator blog.

Some other This is Money resources that you may find helpful are our regular Investing Show videos, our 50 best funds round-up, and our free How to be a Successful Investor guide.

Nutmeg’s financial advice service offers free initial assessment

0

People are as likely to take regulated financial advice as they are to drink kale smoothies and exercise daily. 

But those who ditch dieting advice inevitably fail to lose enough weight, just as those who dismiss professional financial advice could fail to gain enough wealth.

Fewer than one in ten use a financial adviser. Price is a barrier, so firms need to find ways to deliver sound advice, at a cost that is fair to both sides.

Nutmeg, a new financial wealth manager, is offering a free initial assessment when you choose them as personal advisers

One of the latest proposals is from Nutmeg – an online wealth manager – which aims to simplify investing for the masses and cut costs.

Its new advice service includes a personal review of finances and a conversation with a regulated financial adviser. 

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This initial assessment is free, as is typical for most advisers. You will be turned away if you cannot benefit further or if you should be looking at protection policies first – such as critical illness or life insurance.

But if personal recommendations work for you, the cost is £350.

VERDICT: The service is restricted to Nutmeg’s offerings and will not include all products available on the market. To find a whole-of-market adviser visit the website unbiased.co.uk. But for many it could be a cost-effective way to get expert help.

INVESTMENT EXTRA: Should you sink your teeth into the Faangs?

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America’s Faang stocks – Facebook, Apple, Amazon, Netflix and Google’s parent Alphabet – have truly bitten investors over the past few weeks.

While the tech giants may have been some of the biggest contributors to US stock markets for the last decade, raking in huge returns for savers, their star status has slipped as their combined value is down more than $ 1trillion from highs reached earlier this year.

For anyone who scooped up shares in the companies when they were at their peak, this is bad news. 

Facebook has been damaged by the discovery of suspicious Russian activity on its site in the run-up to the 2016 US presidential elections

He points to the fact that companies like Netflix – which hasn’t released any specifically bad news – have fallen just as much.

‘It’s been a self-feeding process as people have piled in to the stocks because they have been going up,’ he says, adding that some fund managers bought, not because they particularly like the shares, but for fear of missing out on gains.

‘But this means that when there is the slightest hint that there might be clouds on the tech horizon, there are half-hearted stock holders who are keen to get out’, Stevenson says.

Park, too, concedes there are wider forces at play. Interest rates have remained low since the financial crisis. This has forced savers looking for a better return in riskier stocks like the Faangs.

Now, however, interest rates in the US have started to rise and are expected to continue going up.

This means some investors feel there will be less need to take on the extra risk of the Faangs to get good returns in future.

Despite the recent falls, many investment professionals see the Faangs as good long-term holdings because they are innovative and have huge potential to make profits in future.

Most brokers and online investment platforms do allow clients to buy stakes in companies across the pond, though it is more expensive than buying UK shares.

Hargreaves Lansdown, for example, takes between 0.25 per cent and 1 per cent of the investment to cover foreign exchange fees. 

But even though the Faangs are looking cheaper than they have for a long time, now may not be the time to plough money into them.

Chris Johnson of Johnson Research Group says: ‘We are sliding down a slope of hope. And we are looking for everybody to run to the streets and have the panic moment. I’m waiting for chaos before we start buying.’

For ordinary savers, the best way to play the tech game is probably through a fund or trust which has holdings in a range of companies.

Stevenson recommends the Scottish Mortgage Investment Trust or the F&C Investment Trust, both of whose shares trade on the London Stock Exchange.

Savers can also invest in open-ended funds such as the BNY Mellon Long-term Global Equity fund, Fidelity Global Special Situations or JPM US Select.

Your first trade for Tuesday, March 27

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show chapters

Your first trade for Tuesday, March 27

“Fast Money” final trades: AMD, NVDA and more   

The “Fast Money” traders shared their first moves for the market open.

 

Tim Seymour was a buyer of the Financial Select SPDR Fund.

Brian Kelly was a buyer of Nvidia.

Things women need to think about when it comes to finances

0

They say men are from Mars and women are from Venus, but does that really matter when it comes to our money? 

Do women need to think differently about their savings, investments and retirement? The short answer is, yes. 

Much like a car accelerates and decelerates, in life we have our ‘accumulation’ years – the time spent building our wealth by working, saving and acquiring assets like a property.

 Once we reach retirement, we enter the ‘decumulation’ phase, drawing income from the savings and pension pots we have built up during the accumulation years.

What you’re left with to ‘decumulate’ once retirement sets in, will to a large extent be a result of what you’ve managed to ‘accumulate’ during your working years. 

And, here’s the rub: women face very different challenges to men in their accumulation years, which ultimately impacts how much they’re left with one day.

Women are likely to live longer than their male counterparts – so they need to make sure they have enough savings

Forget until death do us part, these days it’s more likely, until retirement. For both men and women, the average age of divorce has been rising by about three months every year over the past decade – it’s up around 10 years since records began in 1950.

People are marrying later in life and living longer and as a result are more exposed to divorce at older ages. Divorce is also no longer seen as the social taboo that it once was. These factors have given rise to the so-called ‘silver separators’ – from 1990 to 2012, those aged 60 and above filing divorce papers rose by more than 85 per cent.

Whatever your age, a divorce can be stressful and burdened with financial worries, not least of all having to face the acrimonious task of splitting your assets. For the over-60s, the financial ramifications can be devastating. 

Women, who have been stay-at-home mums or let their husbands manage the finances during a long marriage, need to ensure a fair separation of wealth.

Where the main pension holder and breadwinner is the husband, ex-wives are often awarded a one-off lump sum or matrimonial home to manage. 

But substituting a pension income for a property can be risky and a very short term strategy – a far more prudent approach is splitting the pension pot – there are different routes you can follow and it’s important to understand each option.

Most importantly, women need to invest and have financial plans in their own right. If you are raising children and managing the family home it is unlikely your savings and pension benefits will be vast. 

Remember ladies, you’re likely to live longer than your male counterparts, so make sure retirement savings last for as long as you do.

Maike Currie is Investment Director at Fidelity International and the author of The Search for Income – an investor’s guide to income-paying investments. The views expressed are her own. @MaikeCurrie

Here’s how beginners can get off to a flying start when it comes to investment trusts

0

In considering whether investment trusts are appropriate for your particular financial circumstances and plans, you need to do plenty of homework.

First, like all investments and shares, they should only be bought if you plan to invest for the long term. Returns are never guaranteed – and the value of your investment can fall as evidenced by recent sharp stock corrections worldwide.

But the longer you invest, the more chance you give yourself of making a profit on your money. So unless you are prepared to invest for at least five years, you are better steering clear. 

In considering whether investment trusts are appropriate for your particular financial circumstances and plans, you need to do plenty of homework

Also, if capital security is paramount, trusts will not be for you – and you are better keeping your money in a savings account with a bank or building society.

If you are happy with putting money away long term, then investment trusts are an option – alongside other investments such as company shares and funds.

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In terms of specific investment trusts, there is a broad range to choose from – everything from those that are income-friendly through to trusts investing in the stock markets of some of the world’s emerging markets. But they all carry an element of investment risk.

A good starting point for newbie investors is to visit the website of the Association of Investment Companies at theaic.co.uk. Its ‘find and compare’ section provides key information on individual trusts, allowing you to examine investment objectives and where a fund is invested geographically.

It also provides details of the trust’s dividend history, the charges it takes for running the fund (the higher they are, the less you receive in investment return) and crucially its past performance.

Free investing guides

You can also access key documents such as a trust’s latest monthly factsheet and report and accounts. 

This will give you an insight into how it is run. In addition, trusts are now required to make available a ‘key information document’ to wannabe investors. 

As the name implies, this spells out key details about a trust – and potential returns under different market conditions. Although criticised by some (myself included) for being potentially misleading, this document should be scrutinised.

Carrying out internet searches on specific investment trusts can also reveal any articles written about them in the financial press.

The best way to buy trusts is through an online investment account run by the likes of AJ Bell, Halifax and Hargreaves Lansdown. You will have the option within the account to hold trusts in a pension or Isa (tax efficient) or as part of a general investment portfolio.

There will be dealing charges so check before you buy. A good way of starting is to invest small amounts on a monthly basis. You can then monitor the progress of your holdings by simply going online. 

Shares of cryptocurrency play Overstock.com crater on share offering

0

Shares of cryptocurrency play Overstock.com crater on share offering

Ken James | Bloomberg | Getty Images
An employee scans an order in the shipping area at the Overstock.com distribution center in Salt Lake City, Utah.

Shares of Overstock.com fell more than 10 percent Tuesday after the company announced its intention to offer 4 million shares of new stock.

 

The e-commerce company said after the markets closed Monday it would issue the new common stock in an underwritten public offering. Guggenheim is the sole underwriter, and has the option to buy up to 600,000 additional shares in the offering within 30 days, Overstock.com said.

Overstock.com was trading at $39.75 on Tuesday morning, bringing the total stock offering to about $158.8 million. Shares are down by more than 37 percent this year.

What are the best investment funds for income?

0

Britain’s small army of income investors are on track to receive a bumper payout this year after dividends reached a record £28.5billion over the summer.

Dividends grew by 14.3 per cent year-on-year in the three months to September, putting investors in UK-listed shares on track for a record year of payouts – bigger even than the previous high of 2014.

That came despite the benefits falling away from bigger dollar-denominated payouts for UK firms triggered by the pound’s devaluation after the Brexit vote, according to the Capita Asset Services Dividend Monitor.

The third-quarter dividend boost will help those invested in both individual shares and hugely popular UK income funds. We take a look at what’s happening and get four top income fund picks to invest in Britain and overseas.

Cooking up a storm: UK dividends soared 14.3 per cent to a record £28.5bn in the third quarter, thanks largely to special dividends issued by contract caterer Compass

Why are dividends up?

The report has upgraded its dividend forecast by more than £3billion to a milestone £94billion by the end of the year – which would eclipse the previous record set in 2014.

The increase was in part driven by ‘one-off’ special dividends that rose by two-fifths to £1.5bn – thanks largely to contract caterer Compass, which distributed £960m on top of its regular dividend.

The FTSE 100 food and support services business opted to return the amount to shareholders after it was unable to identify large-scale acquisition deals earlier this year.

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What’s more, more than two-thirds of the £3.6bn increase in payouts came from the mining sector off the back of a rebound in commodity prices.

Capita’s report also found shares remain the most attractive income generators among the major asset classes. 

The prospective yield over the next 12 months is 3.7 per cent. FTSE 100 listed firms will offer a smidge over 3.8 per cent, while the return for medium-sized companies is 2.7 per cent.

Where are dividends coming from? 

Catering and mining aside, performance from UK plc was broadly positive at sector level during the third quarter, according to Capita. 

In industrial goods and support services, there was good news from Rolls Royce, which restored its payout, while BT’s payout pushed telecoms higher. 

In the banking sector, Lloyds Banking Group continued to provide almost all the growth.

Retail was a mixed bag: Sainsbury’s cut its payout on poor profit performance, and Marks & Spencer did not repeat its special dividend of last year, while clothing retailer Next paid the second in a series of four specials, designed to return surplus cash to shareholders, inspiring confidence in the company’s financial position against a more difficult consumer spending backdrop. 

Food wholesaler Booker, currently the subject of a takeover bid by Tesco, also paid a hefty special. Elsewhere, dividends from the oil, pharmaceuticals, and utilities sectors were broadly flat year-on-year. 

Four of the best income funds 

Many shares offer the opportunity to generate income from your investment, but the selections individual investors make and portfolios they build can often prove haphazard.  

You can outsource this process completely by investing in a fund or investment trust for income. With these, the manager uses their expertise to build a diversified portfolio of stocks so you don’t have to.

As dividends rise, Maike Currie, investment director for Personal Investing at Fidelity International, has suggested four funds for income-hungry investors who would rather not cherry-pick their own stocks.

Invesco Global Equity Income: Managed by veteran investor Nick Mustoe, the fund looks for attractively valued companies with strong balance sheets, cash flows, and management teams – indeed, the types of companies sought after by almost all equity income investors. 

What distinguishes Mustoe’s approach is the depth of expertise he deploys to find the very best ideas in a crowded market.

Free investing guides

JOHCM UK Equity Income Fund: Lead manager Clive Beagles has substantial fund management experience, having previously managed the Newton Higher Income Fund. 

The fund’s investment process focuses on dividends, with a strict yield discipline whereby every single stock in the fund must yield more than the market average on a 12-month prospective basis. 

This fund has a value bias, but companies will only be bought if they have the ability to grow their earnings, and dividend, over time.

Fidelity Global Dividend Fund: This is a solid option for someone looking for an equity income fund that benefits from a global approach.

Manager Dan Roberts scours the globe for attractive income streams but never compromises on quality, given his razor-sharp focus on preserving client capital.

Invesco Perpetual European Equity Income Fund: The fund is managed by Stephanie Butcher with a focus on finding dividend-paying companies with attractive valuations.

She is less concerned about the sector or country in which a company resides and does not shy away from the out-of-favour areas of the market where the best opportunities are often found.

How to beat inheritance tax (and should we take from older savers to help the young): The This is Money podcast

Inheritance tax is one of the most hated around. 

Despite the fact that most people will never leave enough wealth to have it charged on their estates, we really don’t like the idea of 40% above a certain amount going to the taxman. 

But IHT is also a tax that can be avoided.  

On this week’s podcast, Simon Lambert, Sarah Davidson and Georgie Frost look at how and learn more about the Chancellor’s suggested plan to help the young by taking money from the old.

Plus, all the other essential money news you need to know about this week.  

What you need to know about investing in AIM shares

0

AIM stocks once struck fear into many mainstream investors, believing the market was full of small mining companies whose volatility wasn’t worth the ensuing sleepless nights.

But, while Alternative Investment Market shares are still not for the faint hearted, they can provide diversification and potentially enhance portfolio performance.

Here, Rebecca O’Keeffe, head of investment at Interactive Investor, explains what you need to know about the small company stock market.

Fast online fashion shop ASOS has long been one of the darlings of the AIM market

This compares with the FTSE 100 where Oil & Gas, Banks and Personal and Household Goods occupy the top three spots.

The benefit of AIM shares is that if you get it right, it really can improve your portfolio.

The best AIM performer over the last five years is carpets and floorcoverings manufacturer Victoria, which does not fit into the typical image of a high growth AIM company. 

New management came into the company and they are undertaking a buy and build strategy aimed at making Victoria one of the biggest floorcoverings companies in Europe. The share price is now close to 20 times higher than it was five years ago.

Watch out for survivorship bias 

When talking about performance, there is always the thought of survivorship bias and how that impacts relative performance.

Survivorship bias is the idea that when stocks fall out of an index the subsequent index return is flattered by having jettisoned poor performers. 

In the case of groups of investments where you do not count the companies that failed to survive, conveniently forgetting they ever existed, then this can flatter performance even more, but the AIM 100 index includes all previous constituents’ performance, in exactly the same way as the FTSE 100.

The big gaps between the winners and the losers 

Substantial numbers of investors like trading AIM shares as the market can provide frequent trading opportunities. The difference between the winners and the losers is huge. 

Best performers in AIM 100 over one year

Frontier Developments 308%

Plus500 Ltd 197%

Griffin Mining 193%

Source: ii, data to 31 May 2018

Worst performers in AIM 100 over one year 

Faron Pharmaceuticals OY -85% 

Xeros Technology Group -63%

Telit Communications -50% 

 Source: ii, data to 31 May 2018

 

Consider an AIM fund or investment trust instead

For longer term investors, the risks associated with individual shares might not be so appealing. So what options are there for those who want to obtain exposure to AIM shares without the individual company risks?

The AIM index is more difficult to replicate than the FTSE 100, which has numerous low-cost passive options such as ETFs and tracker funds.

This may be because some of the constituents are more illiquid, hence bid-offer spreads on smaller companies tend to be higher than large cap stocks, making it more difficult to track smaller companies effectively. 

Currently, there are no tracker options available for the AIM 100. However, this is where the active fund management industry gets to earn their fees.

Many funds within the UK smaller company sector invest in AIM shares. These microcap and AIM funds do the filtering for you, and some of them have done very well over the past five years, appearing at the top of investment tables, outperforming rivals who don’t invest as heavily in the junior sector.

The top three performing funds in the UK smaller companies sector embrace the range and diversity of smaller UK companies, including AIM stocks.

To put these funds’ performance into context, the average return of a FTSE 100 tracker fund over the same time period is 43.9 per cent.

AIM shares are ultra-high risk, but potentially come with high rewards. As such, they can provide additional variety and diversification to a broader investment portfolio. The AIM market has matured, and long-term investors who have so far shied away from it may want to give AIM another look.

Top performing UK smaller company funds over five years

TB Amati UK Smaller Companies 163%

TM Cavendish AIM 160%

LF Livingbridge UK Micro Cap 159%

Source: ii, data to 31 May 2018