The Safe Investor - Issue 1 2020

ISSUE ONE: JANUARY 2020
REAL ESTATE
Make 2020 a year
of big profits with
British probate
property
TOOLBOX
Learn the art of
Do-it-Yourself
due dIligence for
better returns!
2020 TRENDS
The emerging
markets tipped
for growth in
2020
THE SAFE INVESTOR
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IN THIS
ISSUE
EMERGING
TRENDS FOR
2020
We take a
retrospective look
at 2019 to see
what new markets
emerged to show
the most growth
potential for the year
ahead.
PROBATE
PROPERTY
BARGAINS
How do you grab
a bargain property
at prices up to 50%
below valuation?
The answer is by
buying properties
that are in probate.
Discover how in our
probate property
guide.
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WHY CBD
OIL WILL
BE HUGE IN
2020
Most people are
unaware of the fact
that the UK is the
biggest exporter
of medical CBD
products on the
planet. We take a
closer look at this
value-laden market.
LET’S GET
ETHICAL
More retail
investors are
looking for socially
responsible or
ethical investment
products to balance
their portfolios than
ever before. Can you
really make decent
profits while saving
the planet?
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DUE
DILIGENCE
TOOLBOX
As regulated
financial advisers
come under scrutiny
for mis-selling
investments, we
take a look at the
warning signs of a
bad opportunity.
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HOW THE
WAY WE
INVEST WILL
CHANGE
The FCA is
continually moving
the regulatory
goalposts to ensure
our financial
security. We take
a look at how this
affects the way we
invest today.
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ON THE
COVER
HAVE YOU
LOST MONEY
BECAUSE
OF POOR
FINANCIAL
ADVICE?
You’re not alone. In
the first six months
of 2019, investors
were relieved from
more than £43m.
Are you a victim of
a scam? Find out
more about making
a claim on the
Financial Services
Compensation
Scheme, (FSCS).
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HOT TRENDS
WHERE THE
VALUE LIES...
A MICRO
REVOLUTION
Micro investments,
micro journey, 2020
investment innovation
will be all about
keeping things small.
We’ve already
seen the launch of
microinvestment
apps, which allow
customers to invest
tiny amounts of
money – the change
from their coffee
purchase, or the
amount left over in
their bank account
before payday – in
funds that might grow
into a larger nest egg
over time.
Moneybox is the bestknown
of these apps
in the UK, but 2020
could see the growth
of rivals including
Wombat. US-based
commissionfree
trading app
Robinhood received
regulatory approval
in the UK in August
and looks set to
launch soon. While
this one isn’t strictly a
microinvestment app,
experts put it squarely
in the same space, as
it targets those with
small amounts to
invest and an interest
in using technology to
do so.
Micro-journeys – the
simple(ish) decisions
that investors need to
make when they’re
managing their
finances - includes
things as whether
to pay microinvestments
into a
pension or an ISA, and
when to pay off debt
rather than putting
money into the stock
market. Expect the
financial apps that
are currently being
developed to be able
to handle these small
steps, leaving human
beings to focus on the
more complicated
stuff. Like Brexit,
perhaps, or how to
deal with the climate
crisis?
ANOTHER CHANCE
FOR PRE-LOVED
GOODS
Call it secondhand,
vintage or good-asnew,
2020 will be
the year when the
Will veganism and the green crusade continue? Will
the way we invest and make money change?
While the usual caveats apply (our predictive powers
can go up as well as down, etc) here our some of the
big issues and launches that should have their time in
the spotlight in 2020.
investment world
will realise the huge
potential of the
reuse/reduce/recycle
bandwagon.
As fast fashion
becomes increasingly
unacceptable, there’s
money to be made in
ensuring that secondhand
pieces reach
the consumers who
want them, and the
companies with the
technology to do this
could win big.
This time, the trend
won’t just encompass
the likes of ebay,
where finding an
investment piece
is like searching for
a Gucci needle in a
Primark haystack, but
also new ventures
such as the Clair
index, an exchange for
investment handbags
that positively
encourages us to
see our accessories
as moneyspinners,
and StockX, an online
exchange that was
originally for reselling
trainers but has now
branched out to other
goods like watches
and streetwear.
With the American
secondhand clothes
group ThredUp
forecasting that the
market for resale
fashion is expected
to reach $51 billion
(£39 billion) in five
years, expect the UK
to follow where the
US goes, with more
specialist apps and
sites for secondhand
wear.
PREPARE FOR
IMPACT INVESTMENT
Greta Thunberg isn’t
just inspiring our
children to skip school,
she’s influencing our
investment strategies
as well – and 2020 will
be the year when the
big investment firms
finally take notice.
According to
Schroders, threefifths
of all UK
investors want fund
managers to consider
sustainability, while
the same number
believe they can help
contribute to a more
sustainable world by
choosing the right
investment products.
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While cynics might
expect this to lead to a
wave of greenwashing
(with fund managers
scrambling to insert
words such as
“sustainable” and
“environmental”
into their fund
names without really
changing the mix of
investments), we can
but hope that there
will be real change
too, with investors
finding products that
match their green
credentials becoming
more readily available.
The EU is already
working on better
classifications for
green funds, which
could help customers
to dig deeper into
the holdings that
“sustainable” funds
feel are acceptable.
Expect both new
green launches, and
more environmental
scrutiny of existing
“green” funds in the
coming year.
WAVES OF
WOODFORD
FALLOUT
Arguably the biggest
investment story of
2019, the closure of
Neil Woodford’s Equity
Income fund with the
loss of hundreds of
thousands of pounds
of ordinary investors’
money, will continue
to have a huge impact
on the investment
management industry
in 2020.
Amid the handwringing
and
anger, expect more
interest in lowcost
passive funds,
which simply track a
stock market index,
instead of expensive
active managers
(like Woodford)
whose mission is
to outperform the
market, but who don’t
always manage it.
As well as investors
voting with their feet,
there’s also likely to
be regulatory focus
on fund charges and
the amount of money
that funds can hold in
illiquid assets, such as
shares in companies
that aren’t listed on
the stock market and
so can’t be easily sold
2020 is
forecast to
be a turning
point for
electric
vehicles
when cash is needed.
The full scale of
Woodford investors’
losses will only be
revealed in the New
Year, with the fund
remaining invested
until January. The
Treasury Committee
of MPs has already
said that politicians
want to examine what
lessons can be learnt
from this saga.
Woodford shockwaves
will reverberate all the
way through 2020 as
investors find out just
how bad things are,
and fund managers
attempt to disassociate
themselves from his
style.
Expect lots of talk
about transparency,
liquidity of assets and
the value of active
management from
every fund manager
on the block, as they
continue to deal
with the fallout, and
subsequent outflows
to cheap tracker
funds.
A WELL OF
WELLNESS
INVESTMENT
If we trust Google
Trends to find the
biggest moneymaking
schemes
for 2020 in the $4.2
trillion (£3.3 trillion)
wellness industry, we
should all be getting
our investment highs
from cannabidiol
products.
These are derived
from the non psychoactive
strain of
cannabis or hemp,
so they can’t actually
get you high. They
are perfectly legal –
and apparently great
for making you look
glowing with health,
rather than off your
head.
Look out for launches
from existing
health and beauty
manufacturers, plus
new businesses
capitalising on the
excitement.
Elsewhere in wellness,
Google searches
indicate that soundbaths
(basically a
restful experience
using instruments
like tuning forks and
gongs – probably
quite hard to invest in)
and breathing apps
(an easier proposition)
will also be big in 2020.
Expect a rise in
funds capitalising on
wellness as a global
trend, as well as
products linked to
the demands of an
ageing population
– less soothing
than a sound-bath,
but possibly more
lucrative. Mindfulness
tech may be the next
Fintech boom. Think
about it.
A BOTTOM-FISHING
SPREE FOR UK BAR-
GAINS
As the will they/
won’t they Brexit
saga continued
throughout 2019, UK
businesses fell out
of favour. Figures
If there is one trend that we cannot overlook it is the
growth rate of CBD. CBD sales are growing at doubledigit
rates, especially in the markets where it has been
made legal or has at least been decriminalized.
from the Investment
Association show
that investors pulled
£1.2 billion from UKfocused
investment
funds in July 2019
alone, and a further
£700m in August.
If 2020 brings Brexit
resolution, this may
tempt bold investors
back, looking for
value in the bombed
out index of smaller
stocks, the FTSE 250.
Many are predicting
a return to so-called
“value investing”,
which is the
practice of picking
up companies
whose price is low
compared with their
fundamental value.
This style of investing
is often contrasted
with so-called “growth
investing”, where
buyers pay high
prices for prospective
investment growth.
Value investing has
underperformed for
the past 10 years, but
many believe that
2020 is when its time
will come.
AN ELECTRIC
VEHICLE
REVOLUTION
The pace of
change within the
auto industry is
dizzying, and the
increased interest
in sustainability is
already boosting
demand for electric
cars.
2020 may see licences
for self-driving cars,
breakthroughs in
battery technology
and increased
crackdowns in many
areas of the globe on
emissions-producing
diesel cars.
As well as the cars
themselves, there may
be breakthroughs
in car-sharing apps
and the growth
of safety and
artificial intelligence
technology that will
fundamentally change
our relationships with
our vehicles.
For investors, riding
(or even lift-sharing)
on the automobile
superhighway could
be exhilarating, but a
bit of a rollercoaster
ride as new
partnerships appear,
technology companies
pull out of the race
(as Dyson already
has), and winners and
losers become more
obvious.
Those of you old
enough to remember
how Betamax lost
out to VHS will know
that the eventual
winner isn’t always
the obvious candidate,
so buckle up for an
interesting ride.
INVESTMENT
STRATEGIES, TAILOR-
MADE FOR YOU
Want a strategy
that knows when
you change your
retirement plans
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