Weekend reading

Good reads from around the Web.

The UK’s FTSE 100 index has yet to surpass its pre-crisis highs. Good news if you’re investing new money – you’re getting in cheaper!

If you’re fully-invested though and you’re becoming frustrated that you didn’t put all your money into Venezuala (the tinpot dictatorship returned more than 300% last year, topping the global league) then you might direct your ire at just a handful of the UK’s behemoths.

This graph from the UK Stock Market Almanac blog reveals how much a 10% swing in any of the UK’s 20 biggest listed companies moves the FTSE 100:

Click to enlarge (the picture, not your returns)

Click to enlarge (the picture, not your returns)

I was pleased, though not surprised, to see so many of the blue chips I think still worth buying for income are on this list.

There are exceptions. Diageo looks expensive, and you can argue that BP and RDSB are properly priced for their dwindling assets. Lloyds currently pays nothing, but I think it will one day become a cash cow.

On the whole though I can think of worse income portfolios than simply buying this lot with an equal weighting. (That is not advice or even a suggestion it’s a good idea – just an observation.)

While the market has already come a long way in 2013 – and anything can always happen in the short to medium-term – this at least suggests it’s not overly expensive yet to me.

From the blogs

Making good use of the things that we find…

Passive investing

  • Compound interest and wealth accumulation – Wade Pfau
  • Choices in portfolio rebalancing – Rick Ferri
  • Index funds in an ETF world [Canadian but relevant]C.C. Potato

Active investing

Other articles

Product of the week: Five years ago the average cash ISA paid 5.29% – today it’s just 1.79%, reports the Telegraph. RBS has a table-topping two-year fix but it pays an inflation-lagging 2.35%.

Mainstream media money

Note: Some links are to Google search results – these enable you to click through to read the piece without being a paid subscriber of the site.

Passive investing

Active investing

  • David Einhorn’s ‘iPrefs’ proposal for Apple [slides]Business Insider
  • Terry Smith: Hero, or evil genius? – FundWeb
  • This rally is in its infancy – Yahoo Finance
  • Buffet brand has more beans than Heinz – FT
  • Seven interesting small cap funds [Search result]Merryn/FT
  • Small hedge funds outperform large ones [data!]All About Alpha
  • Value stocks are hot, but most investors’ burn out [Search result]WSJ

Other stuff worth reading

  • Fidelity has launched a half-price ISA fee deal – Guardian
  • The four-day week: Less is more – Guardian
  • Beware mass-market stamp duty avoidance  [Search result]FT
  • Plain vanilla banking is the problem, not the solution – New Yorker
  • Questioning the motives behind your financial decisions – NY Times
  • Martin Wolf: Eurozone crisis not over yet [Search result]FT
  • The next US bank bailout might be different – Motley Fool
  • Relax! You’ll be more productive – Farnham Street

Book of the week: Looking for a stock market diary? Robbie Burns says his Naked Trader’s Diary is sold out; there’s a Kindle edition if you just want the data. Amazon has ten copies left of the rival UK Stock Market Almanac.

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