The Atticus Papers

Bringing clarity to finance

Friday 3rd September, 2021

Guide to investing – part 2 – What is investment diversification and asset allocation?

One of the most complex areas of investing is investment asset allocation and diversification. So many questions arise around why we do it and how to do it properly. There is a plethora of information on the internet and Youtube to the extent that Ray Dalio, the famous hedge fund manager, even goes so far as to recommend an "all weather" asset allocation for the DIY investor. In part 2 of our guide to investing, I will look to further reduce some of the mystery around investing and portfolio construction by looking at how we utilise different asset classes to build an investment portfolio which is aligned to your own personality and attitude to risk, as well as what you are trying to achieve through investing. At the end of this article, if you still have any questions or would like some advice on building a portfolio that meets your specific needs, then please don't hesitate to give us a call.

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Tuesday 24th August, 2021

Guide to investing: Part 1 - What are the 7 main asset classes?

"What is an investment asset class?" This is one of the many questions I get asked by friends and prospective clients around the basic fundamentals of investing. Many people are keen to invest, but often find themselves adrift in a flood of jargon and concepts that seem to make absolutely no sense. I have therefore put together a two part series of articles that look to explain some of the basic concepts that are crucial to understand, before taking the leap into actually investing your money. In the first part we will look at the building blocks that make up an investment portfolio: the asset classes. We will look at each asset class and discuss what it is and how it works. We will look at the advantages and disadvantages of each and how they can be used to build a well diversified portfolio. In part 2, I will look at asset allocation and diversification and how to build a portfolio that is suitable for you and what you are looking to achieve. I really believe that if more people understood these concepts, there would be far more individuals reaping the potentially life changing benefits of a well structured investment portfolio. More importantly, there would be far fewer new investors being taken in by the dishonest snake-oil salesmen who peddle investment scams around the world. If you are interested in investing, but would still like some help putting together a well balanced portfolio, then please don't hesitate to give us a call.

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Friday 30th July, 2021

Should I be investing in cryptocurrencies? - An investor's guide to the Bitcoin conundrum

"Should I be investing in cryptocurrencies?" This seems to be the question on everybody's lips at the moment, from experienced, long term investors to those who have never considered investing before, but don't want to miss an opportunity to turn a quick buck. I have been asked this question by numerous clients and friends and also been in a number of fairly heated debates on this topic, with one individual accusing me of selling my clients short by not actively encouraging them to purchase a portfolio of cryptocurrencies. Like everybody else out there, I have questioned whether I am missing a trick here. It is hard not to be tempted by the lure of massive returns on your money over an incredibly short time. I have therefore looked at it as forensically as I can to determine whether there is any merit to holding cryptocurrencies for the investors I work with. Now, it is important to point out that I work with medium to long term investors. If you are looking for an investment that will triple in value over a year, I am probably not your man. In order to answer many of the questions I am asked, I have put together a fairly in-depth article to look at all aspects of cryptocurrency. I will look at the historical aspects of asset bubbles and also look at whether a cryptocurrency is an investment or a currency, or neither. I will look at the hurdles (government regulation, corruption, market manipulation) facing cryptocurrencies and whether these are insurmountable or not. I will end with a summary of my views and whether long term investors should be holding cryptocurrency or not. I hope you find this article useful, but if you have any questions, please feel free to give us a call. We are always happy to help.

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Monday 26th July, 2021

How to invest in smaller companies and start-ups - A guide to Enterprise Investment Schemes, Venture Capital Trusts and AIM portfolios

"How can I invest in smaller, newer, growth companies and Start-ups?" It is probably the dream of every investor to go out and find a brand new start-up that very few other people have access to, buy up some equity in the business and then watch as it goes stratospheric. It's like Captain Ahab's quest for the great white whale, hopefully just a little less self-destructive and fruitless. Despite the fact that this is often perceived as the preserve of the institutional investor (your Gordon Gekkos of the world), many retail investors have not given up hope of finding a start-up to invest in with the possibility of finding the elusive 10 bagger (10 x original investment) investment or higher. After all, it doesn't take much. I had a friend who invested £15,000 in ASOS, when it first floated on AIM, and watched (firstly with shock and then undisguised glee) as it grew to £250,000. In the article below, I will look at a number of different investment vehicles which retail investors (that's non-professional investors) can use to gain access to investment opportunities in start-ups and smaller, riskier, growth focussed companies. We will look at Alternative Investment Market (AIM) portfolios, Enterprise Investment Schemes (EIS) and Venture Capital Trusts (VCT). We will look at what they are, how they work, and the advantages and disadvantages of utilising them as an investment option. It is important to note that, although these investments carry large growth potential and tax benefits, they are incredibly risky. It is therefore crucial to take advice before investing in any of these investment vehicles and it is important that you are careful about how much of your portfolio you choose to invest in them.

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Friday 9th July, 2021

What are investment wrappers? - a guide to investment tax structures in the UK

What is meant by an investment tax wrapper? Financial advisers are often accused of using obscure industry jargon, when talking to clients. I know that I am sometimes guilty of this and I think any professional tends to unintentionally fall into the phrases that they feel most comfortable with, when trying to explain something which may be quite complex. For the adviser, this may be fine, but for the client it can be incredibly frustrating and confusing. One of the phrases most often bandied about by financial advisers is the term “tax wrapper”. When I look at it objectively, it is a very confusing phrase. It sounds like something you should get if HMRC suddenly started their own clothing line! However, it is a remarkably important phrase and it is crucial that investors understand it, as it goes right to the heart of how an individual makes their portfolio as tax efficient as possible. In the article below, I will explain what a tax wrapper actually is, highlight some of the more common tax vehicles and explain some of their most important features. This can be quite a complex area, so please don’t hesitate to give us a call if you have any questions. We are always happy to help.

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