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Another £1.5 BILLION pouring into responsible investments: here’s why!

financialnews1 on December 6, 2021

Image source: Getty Images

Investing responsibly is quickly becoming the path of choice for many investors. In 2021, money continues to pour into these kinds of investments month after month. And there are no signs of inflows slowing down anytime soon!

Here’s why so much cash is being put into this type of investment and what we’re likely to see in future as a result.

What does investing responsibly mean?

You say tomato, I say tomato. That saying doesn’t appear to make as much sense written down, but you know what I mean.

Everyone has a different definition of what they think is ethical or responsible. Evel Knievel believed it was responsible to jump over cars with a motorbike and I think it’s irresponsible to ride a bicycle on gravel. It’s all about perspective.

Recently there’s been a general sway towards investments thought of as less harmful. In some cases, this socially responsible investing (SRI) means using ESG investing methods. In others, it simply means putting cash into firms trying to improve the world in some way or avoiding fossil-fuel businesses.

But whatever way you look at it, investors are just being more conscious about where their money is going. Investing is no longer all about profit and growth at any cost. This wide and sweeping change in attitudes is quickly altering the whole landscape of money.

How much is going into responsible investments?

According to the latest data from the Investment Association, a whopping £1.5 billion was put into responsible funds during October!

Emma Wall, head of investment analysis and research at Hargreaves Lansdown, explains these big figures: “Responsible funds continue to see significant inflows from retail investors keen to do good and make money at the same time.

“With an extra £1.5 billion invested in October, this now takes the total invested in responsible funds to £88.7 billion. It is small fry compared to the wider market, at just 5.7% of funds under management, but making inroads.”

Will this trend of responsible investments continue?

Although responsible funds are swelling in popularity, the bulk of investors’ money can be found elsewhere in the markets.

However, this means that there’s a lot of potential for these funds to grow as investors rotate some or all of their holdings into more ethical investments. Here are the two big topics on people’s minds right now:

  • Climate issues
  • The coronavirus pandemic

The awareness of big global problems coupled with lots of younger investors joining the market means there’s no reason for these responsible trends to slow down anytime soon.

What may lay ahead for investors?

You now have more control than ever over where you invest your money. It’s an exciting time to be an investor and although some companies and industries may fizzle out over the coming years, new ones will rise up to take their place.

Using one of our top-rated share dealing accounts, you can find the responsible stocks and funds that suit your goals. It’s also worth using something like the Hargreaves Lansdown Stocks and Shares ISA for your investments. This type of account is a great way to protect any gains from tax.

Just remember that no one can predict the future. When it comes to investing, you may get out less than you put in. So be sure to do your research and always have a long-term plan to help you on your journey.

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About the author

Avatar for George Sweeney (DipFA)

George Sweeney (DipFA)

George is a writer and qualified financial adviser focused on educating others in personal finance & investing.


Some offers on The Motley Fool UK site are from our partners — it’s how we make money and keep this site going. But does that impact our ratings? Nope. Our commitment is to you. If a product isn’t any good, our rating will reflect that, or we won’t list it at all. Also, while we aim to feature the best products available, we do not review every product on the market. Learn more here. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Barclays, Hargreaves Lansdown, HSBC Holdings, Lloyds Banking Group, Mastercard, and Tesco.

I want this cheap Warren Buffett stock for Christmas

financialnews1 on December 6, 2021

Two famous Warren Buffett quotes encapsulate the philosophy of value investing. I think they also capture the legendary investor’s likely thought process when he first invested in American Express (NYSE:AXP). He said: “It is far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” And he also said: “Be fearful when others are greedy and greedy when others are fearful”

Salad oil scandal

His initial investment in American Express was born out of a 1960s scandal. A salad oil company took out large loans using its product inventory as collateral. However, it filled up its oil tanks with sea water, deceiving lenders, including American Express.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

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AmEx shares plummeted on news that it had been conned into lending $175m+. In fact many investors feared this would be the end of the company. Not Warren Buffett though. While others were fearful, he snapped up shares in what he saw as a wonderful business. His initial investment totalled roughly $1.3bn and it prove to be both a lucrative and defining investment for the Oracle of Omaha.

Today, his holding company Berkshire Hathaway owns 19% of American Express. Amex is its third biggest holding, only behind Apple and Bank of America. And impressively, he’s made around 20 times his money on the investment, excluding dividends.

Still a wonderful company at a fair price?

AmEx’s popular credit cards and reward schemes are seen as high-status. Its competitive advantage gives the company pricing power, of which it has recently taken advantage, raising annual fees for its platinum credit card.

Buffett has invested in competitors Visa and Mastercard but notably trimmed his positions in both payment giants this year. Both have seen their share prices fall around 10% year to date while AmEx has risen over 28%. Yet despite this strong 2021 performance, the Omicron variant has triggered a sell-off and the stock is 17.5% down from its October highs. That’s unsurprising given that much of its revenue and many rewards have travel links. Therefore any travel restrictions could trigger further slumps in the share price.

But travel aside, AmEx makes the bulk of its revenue, like other card operators, by taking small percentages of every transaction where one of its cards is used. This makes the company a potential inflation hedge as its revenue should rise in line with price increases.

When compared to its major competitors, AmEx looks to be trading at a fair and arguably cheap price. Its price-to-earnings (P/E) ratio stands at 16 compared to between 39 and 40 for Visa and Mastercard. Its P/E is also considerably lower than that of the S&P 500 at 28.5. Additionally, American Express yields an attractive 1.1% which is considerably higher than its credit card rivals.

Warren Buffett isn’t selling. Should I buy?

AmEx is certainly not trading at the wonderful price Warren Buffet paid in the early 1960s. What’s more, if Covid and its variants prove to be travel and general spending suppressants beyond the short term, the AmEx share price could head further downwards. But unfavourable market conditions may present an opportunity for me to add discounted AmEx shares to my portfolio. Ultimately, I make investments with a long-term horizon and I’d be more than happy to add this Warren Buffett favourite to my portfolio before the end of the year. Especially if investors continue to be fearful. 


American Express is an advertising partner of The Ascent, a Motley Fool company. Nathan Marks owns shares of Visa. The Motley Fool UK has recommended Mastercard. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Christmas pudding – why do people put money it?

financialnews1 on December 6, 2021

Image source: Getty Images

Whether you like Christmas pudding or not, its grand entrance pretty much always garners lots of oohs and ahhs. After all, it’s not often we intentionally set food on fire and then stand back to admire it. But if that wasn’t strange enough, there’s all the trinkets and tokens inside the Christmas pudding itself – including money. Here’s what it’s all about.

Why does Christmas pudding have money in it?

Traditionally, Christmas pudding has a sixpence hidden inside it.

If you get the sixpence in your portion of pudding, then you’ll have good luck over the coming year. Traditionally, other tokens can also be included, each one with its own meaning. As Hercule Poirot discovered in The Adventure of the Christmas Pudding, if a man finds a button, he is destined to be single for the next year. Women who find a thimble share the same fate.

In contrast, if you find a ring in your Christmas pudding, you’ll get married within the year. Find an anchor trinket and you’ll be protected and safe – for the next 12 months at least.

As for pouring brandy and setting it alight, the flames are meant to represent the power and love of Jesus. While some interpret the holly as a symbol of the crown of thorns.

Why do we eat Christmas pudding?

Like with most things, we’ve got the Victorians to thank for Christmas pudding as we understand it now. However, it’s thought to date far further back, possibly to medieval times when a type of milky porridge with dried fruit and nuts was eaten as a fasting dish in the runup to Christmas.

Later, it evolved to include trinkets, which was an idea that came from the Twelfth Night cake eaten at the end of Christmas. But instead of lovely shiny tokens, you’d either get a dried bean or a dried pea.

As bizarre as that might sound, similar traditions can be found in other cultures too. For example, in Spain, they celebrate 6 January as ‘El Día de Los Reyes Magos’ (day of the three kings) with a ‘roscón de reyes’ (king’s cake). It’s a little like brioche with candied fruit. This also includes a trinket, such as a crown, which is the token you want to find. If you’re unlucky, you might get the dried bean token instead.  

Can you still get a sixpence to put in Christmas pudding?

Yes, you can. Although sixpences are no longer in circulation, you can buy special editions from the Royal Mint if you fancy resurrecting this particular tradition.

Traditionally, you should make your Christmas pudding on the last Sunday before advent (basically, the Sunday closest to the end of November). This was also known as ‘stir-up Sunday’ as families would stir up their puddings in readiness for the coming festivities.

You might also have heard Christmas pudding called plum pudding. The dessert confusingly doesn’t contain any plums and it never has. It’s just that ‘plum’ was used to describe any dried fruit.

So, the next time someone wheels out a Christmas pudding, you’ll be able to astound them with your expert knowledge. Just watch you don’t crack a tooth on that sixpence.

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Avatar for Anne East

Anne East

Anne specialises in personal finance and insurance, covering details that enable you to make informed decisions based on facts.


Some offers on The Motley Fool UK site are from our partners — it’s how we make money and keep this site going. But does that impact our ratings? Nope. Our commitment is to you. If a product isn’t any good, our rating will reflect that, or we won’t list it at all. Also, while we aim to feature the best products available, we do not review every product on the market. Learn more here. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Barclays, Hargreaves Lansdown, HSBC Holdings, Lloyds Banking Group, Mastercard, and Tesco.

7%+ dividend yields! 5 FTSE 100 stocks to buy for 2022

financialnews1 on December 6, 2021

The UK stock market has a reputation for being a good source of dividend income. Most of these high-yielders are in the FTSE 100. Today, I want to look at five lead index shares with high yields of 7% or more that I think could perform well in 2022.

I’d be happy to buy all of these shares for my portfolio, as my analysis suggests the dividends they offer should be sustainable. But it’s important to remember that dividends are never guaranteed. Even healthy companies can sometimes cut, or suspend, their payouts, as we saw last year.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

I reckon this 9% yield is too cheap

My first pick is FTSE 100 tobacco group Imperial Brands (LSE: IMB). When CEO Stefan Bomhard took charge last summer, he made the decision to focus on the group’s core brands, such as JPS, West and Gauloises. Spending on next-generation products such as vapes has been cut.

These changes seem to be working. Imperial’s operating profit rose by 15% to £3.1bn last year, while net debt fell from £11.1bn to £9.4bn.

I don’t expect much long-term growth from my Imperial shares. I’m also aware the continued decline in smoking rates and the risk of tougher regulations could hit sales in the future. However, I think these risks are already priced into the stock.

Imperial Brands currently trades on just six times forecast earnings, with a 9.1% dividend yield. As a pure income play, this stock remains a buy for me.

My top housebuilder

Next on my list is housebuilder Persimmon (LSE: PSN). Although the stamp duty holiday has now ended, this business is still seeing strong demand for new homes.

CEO Dean Finch recently said that the number of sales reservations per new home site is currently 16% ahead of 2019. Finch expects the number of homes completed this year to be 10% higher than in 2020.

Persimmon already has £1.15bn of forward sales reserved from 2022 onwards, suggesting that next year’s results should be fairly stable.

Profit margins remain high at this business, despite rising labour and material costs. There’s no debt and Persimmon reported a cash balance of £895m at the end of October. I think this should provide good support for this year’s expected dividend of 235p per share, giving a forecast yield of 8.4%.

The only big risk I can see here is that market conditions will slow drastically, leading to a fall in house prices and lower sales. Rising interest rates seem the most likely trigger for this, in my view. But, so far, there’s not much sign of this. I remain happy to hold Persimmon.

A little-known FTSE 100 7%-er

You may not be familiar with FTSE 100 insurer Phoenix Group (LSE: PHNX). Until recently, this retirement group specialised in buying existing insurance policies from other insurers. However, Phoenix is now expanding into new business areas, selling products under the well-known Standard Life brand.

The company’s half-year results showed £412m of new business, compared to £358m last year. So there’s some growth, but it’s still early days.

I think the main risk here is that Phoenix won’t be able to generate enough new business to replace the income from older run-off policies.

However, the company’s track record over the last few years has been good. Phoenix has met management targets and generated plenty of surplus cash. For now, the stock’s 7.5% dividend yield still looks safe to me.

A miner offering 10%

Shares in FTSE 100 mining group Rio Tinto (LSE: RIO) hit a record high earlier this year when the price of iron ore soared to more than $200 per tonne. Things have calmed down a bit, and Rio’s share price has fallen 30% from its April peak.

I think this heavyweight miner is starting to look better value. Low costs mean that profits are expected to stay strong next year, even as commodity prices cool. Broker forecasts at the moment suggest shareholders could receive a 10% dividend yield in 2022.

For me, the main risk is that the shares are still too expensive to ride out a serious mining downturn. However, we might not see that scenario again for several more years. In the meantime, I expect Rio to remain highly profitable. On balance, I think Rio shares look reasonably-priced for income.

Unpopular but too cheap?

My final pick is telecoms giant Vodafone Group (LSE: VOD). It’s best-known in the UK as a mobile phone operator. But in Europe, Vodafone is also a big broadband provider, while in Africa, it operates one of the biggest mobile money services.

Vodafone boss Nick Read has streamlined the business. He’s now focused on more profitable growth opportunities, such as digital services.

It’s a tough balance to strike, because spending requirements are already high as the 5G rollout continues. Read has to juggle debt repayments, dividends, and new investment. If he gets the balance wrong, he might have to cut the dividend.

No investment is ever completely safe, but I’ve followed Read’s progress since he took charge and, so far, I’ve been impressed. For this reason, I’d still be happy to buy Vodafone stock — which offers a 7% dividend yield — for my portfolio.

An easy route to passive income?

I’d be happy to buy all of these FTSE 100 dividend stocks for 2022. But as I mentioned at the top of this piece, dividends are never guaranteed.

For this reason, I would never rely on just five dividend shares to provide a passive income. A single cut could have a big impact on my overall portfolio income. What I do instead is to run a dividend portfolio with 20 stocks. That way, any single cut should only have a small impact on the total income from my portfolio.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic…

And with so many great companies still trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down…

You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm.

That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away.

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3 penny shares to buy if stock markets crash!

financialnews1 on December 6, 2021

Confidence on global share markets remains on a knife-edge. As I type, major indices are edging away from the recent troughs struck as news of the Omicron virus variant emerged.

But I wouldn’t be shocked if stock markets crash again before Christmas. The biggest blue-chip to the smallest penny stock are all in jeopardy of another slump.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

It’s not just fear that the Covid-19 crisis could significantly worsen very quickly, decimating the economic recovery in the process. The threat of persistently-high inflation continues to linger in the back of investors’ minds. Signs that Chinese property giant Evergrande is creeping closer to default adds another major problem for investors to chew over.

3 penny stocks I’m considering buying

I don’t plan to stop buying UK shares despite these risks. There are plenty of British stocks that could still provide excellent shareholder rewards. Here are three top penny stocks I’m thinking of buying, despite the threat of another stock market crash.

#1: Sylvania Platinum

I think Sylvania Platinum’s a great way for me to hedge my bets. Investment demand for the platinum group metals (PGMs) it produces will likely balloon if the global economy struggles and interest in safe-haven assets rises.

But on the other side of the coin, prices of platinum et al could swell if the economic recovery continues and autobuilders continue to buy the metal. PGMs are used in huge quantities to clean up emissions in car exhaust systems.

My main concern with Sylvania Platinum is the ever-present danger of production problems that can hit revenues and supercharge costs.

#2: ContourGlobal

CountourGlobal is in the business and building and operating power stations all over the globe. The essential nature of its services means, therefore, that profits remain broadly stable at all points of the economic cycle. I wouldn’t just buy this penny stock for its excellent defensive qualities though. I think its increased focus on renewable energy could pay off handsomely as demand for low-carbon electricity soars.

I’d buy ContourGlobal shares despite the complex nature of its operations. Any delays to the power plants it constructs could take a big bite out of the bottom line.

#3: Futura Medical

I’d also expect Futura Medical to stand up well during a broader stock market crash. Why? This healthcare stock has created a gel (the snappily-titled MED3000) that helps solve the problem of erectile dysfunction.

In a busy 2021, the gel received the all-important CE mark in Europe. It is now being considered by regulators in the US too. Positive news on this front would naturally light a fire under Futura Medical’s share price.

But Future Medical does face huge competition from industry giant brands like Viagra. Still, MED3000 has shown qualities that could help it fight back the competition. These include a fast-acting formula and a lack of drug interaction with prescription products.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic…

And with so many great companies still trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down…

You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm.

That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away.

Click here to claim your free copy of this special investing report now!


Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

5% dividend yield! A small-cap stock I’d buy in December

financialnews1 on December 6, 2021

Small-cap stocks can be quite a risky addition to any portfolio. These businesses typically have far less access to external capital, and their size can make it difficult to compete against larger competitors. This is why many companies in this category struggle.

But, every so often, a gem emerges from a sea of mediocrity. And if I can identify them early, then the returns can be explosive. With that in mind, I’ve spotted one small-cap stock that might just fit the bill. Let’s take a look at Somero Enterprises (LSE:SOM).

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

Automation in the construction industry

Somero is a designer and producer of screed machines operating primarily in the US. These are specialised pieces of equipment that allow construction companies to lay smooth concrete surfaces for structures such as car parks, hospitals and warehouses.

Concrete is far from the most exciting business out there. But it remains a central piece of the global construction industry. What’s more, by using this group’s technology, the final result is significantly higher quality than traditional methods can achieve.

And, more importantly, it requires far less manpower. For example, Kent Companies, a leading concrete contractor in the US, cut its construction team size by nearly half on some projects, while simultaneously reducing completion times.

With e-commerce driving enormous demand for warehousing, and US president Joe Biden committing $2trn to America’s infrastructure, the group looks like it’s ready to enjoy some significant tailwinds. And this may have already started.

Looking at the latest interim results, revenue for the first six months of 2021 came in at $64.4m. That’s around 65% higher versus pre-pandemic levels. And when it comes to operating profits, the performance is even more impressive, jumping from $10m to $23m over the same two-year period.

Combining all this with a near-5% dividend yield, I’m hardly surprised to see the small-cap stock climbing nearly 70% over the last 12 months.

Nothing is risk-free

Business may be booming with further growth on the horizon, but Somero is far from risk-free, especially when it comes to the weather issues. Pouring and laying concrete in the rain compromises its strength and can lead to serious structural problems. Therefore, prolonged periods of bad weather can cause significant disruptions in the revenue stream.

That may seem like an unlikely threat. But in 2019, that’s precisely what happened. The year saw some of the worst storms in America’s history, with extreme cold snaps and heavy rainfall throughout. And with climate change becoming an ever-increasing threat, I think it’s inevitable to see more extreme weather patterns in the future, disrupting the revenue stream once again.

A small-cap stock worth buying?

Also, the firm isn’t short of competition. But its technology appears to be far superior, allowing the group to control a much larger portion of the market share. And with a wide range of machines to meet the varying budgets of its customers, I don’t think this will change anytime soon.

The risk of weather-based revenue disruption is quite concerning. However, management retains a sizable cash position to ensure that all obligations can be met during these disruptive periods. As such, I think the risk is worth the potential reward.

Therefore, I’m keen to increase my existing position in this small-cap stock before the end of the year.

But it’s not the only growth opportunity that has caught my attention this week…

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Zaven Boyrazian owns shares of Somero Enterprises. The Motley Fool UK has recommended Somero Enterprises. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Inflation is sky-rocketing. How I am positioning my portfolio to weather the impending storm

financialnews1 on December 6, 2021

The inflation genie is definitely out of the bottle. In the UK, figures from the ONS showed that CPI hit 4.2% in October up from 3.1% the month before. In the Euro Zone, the monthly increase was 0.5% to stand at 4.1%. And in the US, the Fed’s preferred measure of inflation, the Personal Consumption Expenditures Price Index (PCE), rose 0.4% to 4.1% in October. With figures like this, it is little wonder that the Fed chair Jerome Powell has finally ditched the notion that had been bandied around for some time that inflation was a mere “transitory” phenomenon.

The causes of inflation

The reason why inflation is increasing can be boiled down to a number of themes:

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

  • Record money printing by central banks to prop up their economies following the Covid-19 crash. This has led to the suppression of interest rates;
  • A sudden spike on the demand side, as individuals have hoarded record amounts of cash (and paid down debt) after prolonged lockdowns;
  • Cost-push factors. As economies have reopened, supply chains has been ill-equipped to deal with the sudden spike in demand. This has led to exponential increases in raw materials, energy, and shipping costs. This has been compounded by increasing labour costs as businesses have struggled to entice people back to do jobs at pre-pandemic pay rates.

Which sectors are likely to be the winners in a prolonged inflationary environment?

Sentiment remains bullish for growth stocks and long duration equities, most notably the FAANGs but also software companies in general. It isn’t hard to see why. Covid-19 forced businesses to accelerate their IT spending to move to the cloud, and to improve security to support remote working. A trend that many believe, including myself, is here to stay. But when you project these growth trends into the extreme future (the very essence of a long duration equity) then support for the record valuations placed on such companies becomes a lot more tenuous.

If we are indeed entering a stagflationary environment (one characterised by slow growth coupled with rising inflation) then I see the potential for significant downside amongst such stocks. We may already be seeing the beginning of the unravelling of the largest bubble in history. DocuSign crashed 42% on Friday after the company’s reported guidance fell short of expectations. Amazon recently reported a slump in profits, citing some of the very reasons I called out above. The Darktrace share price has fallen 50% recently, but still commands a premium of 10x revenue, despite still being a loss-making business.

History has shown that in periods of rising inflation certain assets tend to do well. During the inflationary recession of 1973-74, the Nifty 50 (the growth stocks of the day) declined 50%. Similarly, during the tech bust, the Nasdaq composite fell 78%. Both eras marked the beginning of a secular bull market for precious metals.

Investing in individual gold and silver miners is risky and not for everyone. However, there are plenty of ways to get exposure to the yellow metal other than physically buying the commodity. There are several gold-backed ETFs that track its spot price as well as those that buy a basket of precious metal mining stocks.

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Andrew Mackie has no position in any of the shares mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Amazon and DocuSign. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

What you should spend your Christmas bonus on

financialnews1 on December 6, 2021

Image source: Getty Images

Christmas is a time of goodwill, and it’s become a tradition for employers to throw away the ‘bah humbug’ and dip into their pockets to reward their workers for a job well done throughout the year. So if your boss is more a Christmas Carole and less of a Charles Dickens, then what exactly should you do with it?

One of the toughest things to know is where to start. So first things first, as a broad principle you could start with the 80-20 rule. Or in other words, £8 in any £10 received should be put towards your financial future. Which means if you receive the average year-end bonus of £1,600 then you’d be looking at £1,280 to be sensible with.

Cover the Ghost of Christmas Present

So now that you know how much we’re talking about, what’s the first thing you should do? Well, if you don’t have an “emergency fund” then I suggest you start there. At an absolute minimum you should be looking to have 3 months of living expenses held in a short-term deposit account that you could get your hands on quickly if life throws something unexpected at you. Ideally, that would be 6 months. So if your monthly outgoings were £1,000 then you’d be looking at between £3,000 and £6,000 in your emergency fund.

Don’t forget about Ghosts of Christmas Past

If you’ve already got that one covered, then the next thing you should be looking at is paying down any debts you have. If you’ve got any credit card debt, then it’s a very smart idea to look at that as money you’ve already spent your bonus on and to pay that off. That’s especially true if you’re only paying the minimum amount on your credit card every month. While we’re on the subject of credit cards, you could look at using part of your bonus to pay for a “balance transfer”, where your credit card debt is moved to another card provider. Depending on your circumstances, you could even transfer to a 0% interest card, which would mean every £1 you paid off would go to reducing your debt rather than paying the bank interest.

Paying down debt doesn’t just mean credit cards. If you’ve got a mortgage, you could overpay on that too and potentially get a benefit. If you’re thinking about this, it’s worth speaking to your mortgage provider as not all mortgages are created equal and there may be penalties associated.

Look to the Ghosts of Christmas Yet to Come

The other option is to look to invest your money to hopefully bag an even bigger windfall in the future. One of the least considered ways to do this is to put that into your pension. This is especially effective if you’re a higher rate taxpayer. Chances are the tax relief you’d receive will make the ‘bonus’ even bigger, and the further away from retirement you are the bigger difference that would make to you. Think of it as giving yourself a much, much larger bonus when you retire.

The alternative is to think about investing in an Index Tracker. If you’re not used your ISA for this year, it’s a great way to invest and avoid paying any tax on the gains. If you’ve never bought stocks and shares before, it’s one of the better ways of dipping your toe into the market.

And as for what’s left after you’ve done all of the above? Well, go and do something Foolish, you’ve earned it!

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Some offers on The Motley Fool UK site are from our partners — it’s how we make money and keep this site going. But does that impact our ratings? Nope. Our commitment is to you. If a product isn’t any good, our rating will reflect that, or we won’t list it at all. Also, while we aim to feature the best products available, we do not review every product on the market. Learn more here. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Barclays, Hargreaves Lansdown, HSBC Holdings, Lloyds Banking Group, Mastercard, and Tesco.

The Wickes share price just surged 11%. Is it now a buy?

financialnews1 on December 6, 2021

The Wickes (LSE: WIX) share price rallied 11% on Friday after the company released a trading update for its fourth quarter. This made the stock the best performer in the lesser-known FTSE Small Cap index.

Wickes is a fairly new listing on the London Stock Exchange after it completed a demerger from Travis Perkins back in April. The share price hit a high of 288p on the first day of trading, but has drifted lower since. Before the update on Friday, the share price had dipped to 215p.

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Has the trading update marked a turning point for the stock? Let’s take a look to see if it’s a buy for my portfolio.

Wickes and a demerger

Wickes is a major home improvement retailer in the UK. It describes itself as a digitally-led and service-enabled company that offers customers choice, convenience and value. Over recent years, it has rebalanced its business to service three types of customers it defines as: “Local Trade, Do-It-For-Me and DIY retail.”

When Wickes listed on the London Stock Exchange as a spin-off from Travis Perkins, it didn’t raise any new capital as part of the listing. Travis Perkins shareholders received shares in the newly listed firm, and had the option to either retain these shares, or sell them once trading began. This can sometimes place downward pressure on the share price of a spun-off company as shareholders opt to sell the shares and retain the original company in their portfolios.

The share price surges

It’s easy to see why the share price rallied on Friday. The company said trading has been resilient and raised its outlook for profit in fiscal/calendar year 2021. Revenue was actually in line with expectations, but margin performance was strong, which led to the upgrade in profit guidance.

I view this as a particularly good performance given the supply chain issues that most businesses are experiencing today. It signals that management is able to navigate supplier relationships very well, and that its business model is adaptive to these risks.

Is Wickes stock a buy?

I view the recent listing positively. Sometimes new companies that list via IPO have short histories, or require equity capital to invest for growth. This increases the risk of outright loss for a potential shareholder. However, Wickes is profitable with a longstanding history, which does de-risk the investment in my view.

There are still risks to consider though. For a start, there’s no guarantee that the management team will be able to mitigate supply chain issues indefinitely. Then, any slowdown in the UK economy will likely reduce demand for home improvement supplies.

However, I think the recent weakness in the Wickes share price reflects the selling pressure after the spin-off completed. The valuation looks compelling now as the shares are priced on a forward price-to-earnings ratio of only 10. I’ll be looking to add Wickes shares to my portfolio.

This IPO might also be worth a look…

Is this little-known company the next ‘Monster’ IPO?

Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.

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Dan Appleby owns shares of London Stock Exchange Group. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Working from home can save you over £1,500 a year

financialnews1 on December 6, 2021

Image source: Getty Images

After a year and a half of working from home, Brits are starting to reevaluate the pros and cons of giving up commuting. A survey by Real Business Rescue found that some people are missing the office, but also found that many are very happy about all the time and money saved by being able to work from home.

What the numbers say

Only 14% of Brits are still working from home full-time, with most having a hybrid schedule and 42% back to commuting five days a week. For those working from home, one of the biggest savings is time. According to Real Business Rescue, the average work commute takes 46 minutes each day. This adds up to 11,667 minutes in commuting time every year – the equivalent of eight days.

While many are enjoying the extra ‘found’ days, others admit they actually miss the commute to work. This is because many Brits are using commute time as ‘me’ time. About 35% use that time to listen to music, while 32% just enjoy the drive and 9% catch up on their reading.

Financially, working from home is much cheaper

The average Brit spends £126 a month commuting, according to Real Business Rescue. This means working from home will result in £1,500 a year in savings. But the savings are even bigger for certain groups. For example, 16-24-year-olds have monthly commute costs of £191, while 25-34 olds spend £169 a month.

Those taking the train spend much more at an average of £70 per week plus parking costs near the train station. In fact, according to research by Confused.com Brits are spending as much as £544 for their monthly commute once you add costs like lunch and snacks, social activities, and items bought during breaks at work.

The numbers look good for drivers too. Confused.com research says the average daily commute to work is 21 miles. Less driving not only means less money spent on petrol but also a potential reduction in car insurance premiums because of reduced mileage.

Where the savings are going 

About 15% of people are using the money they’re saving by working from home to treat themselves. But a much larger percentage are looking to use that money better by saving or investing it.

Savings of £1,500 could be used to set up an emergency fund or start savings towards a bigger purchase in the future. You could also look into opening a cash ISA, which stretches further because any interest earned in a cash ISA account is tax free. 

Other ways to make the most of those savings

  • Use them to pay off high-interest debt. If you end up accruing credit card debt during the pandemic, it could be a good time to clear that up while you’re working from home.
  • Review your retirement account options and see whether you can contribute additional money to your long-term future.
  • Figure out your savings goals and see where your money could work better for you. If you’re thinking long term, investing in the stock market might be a better option than holding the money in a savings account. 

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Diana Bocco

Diana is a writer specialising in debt repayment, savings, and personal investments. Her work has also appeared on MSN Money, Inc. Magazine, and Yahoo! Finance.


Some offers on The Motley Fool UK site are from our partners — it’s how we make money and keep this site going. But does that impact our ratings? Nope. Our commitment is to you. If a product isn’t any good, our rating will reflect that, or we won’t list it at all. Also, while we aim to feature the best products available, we do not review every product on the market. Learn more here. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Barclays, Hargreaves Lansdown, HSBC Holdings, Lloyds Banking Group, Mastercard, and Tesco.

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