How To Own The World: A Plain English Guide To Thinking Globally And Investing Wisely
byAndrew CraigPublished byCreate Space Publishing (£13.99)
Many investment professionals will tell you that investing for yourself is a fool's errand. Instead, they'll suggest you leave your money with them to take care of (and extract fees from). Experienced City professional Andrew Craig has a very different take. In How To Own The World he suggests you take direct control of your own investments, and shows you how to do it building a portfolio based around a number of asset classes, including stocks, bonds, commodities and gold.
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Craig's book is divided into three sections. He spends the first fourchapters outlining his core beliefs.These include his view that manyso-called professionals know surprisingly little about the market, and his expectation that global competition for resources will drive up prices across the board. He argues that this is already taking place, pointing out the various ways in which official inflation and unemployment rates have been massaged lower over the years. The next section focuses on why you need to save at least 10% of your income each year, before the third and final section takes us to the specific steps that you can take.
Craig is certainly not afraid to stick his neck out with bold predictions, many of which we'd strongly agree with. For instance, while he accepts that property can be a decent investment in certain circumstance, he thinks that UK prices London in particular are in bubble territory, with rental yields extremely low. If capital values fall, or even stagnate, investors will end up getting very little reward for the stress and paperwork that go along with being a landlord.
Another important issue he highlights is the impact of an ageing population on governments that already have high levels of debt. These demographic changes will increase the burden of state pension systems upon national budgets. Craig argues that this will force central banks to print money even faster good news for those who own "hard" assets, such as gold. It will also lead to governments cutting back on state pension provision, making it even more important for individuals to build up a big pot of savings that can generate enough income to support them through their retirement.
Not all of Craig's predictions are as convincing. He does briefly acknowledge the collapse in oil prices, but overall his emphasis on soaring commodity inflation looks a little misplaced, given what's happened over the past 15 months, and reflects the fact that the original edition of the book came out at the height of the commodity boom. However, you could argue that the market sentiment around commodities is currently so negative that his bullish perspective serves as a useful reminder of the other side of the argument.
Large parts of Craig's book might make for uncomfortable reading. I suspectthat many readers who assume they will be able automatically to enjoy a comfortable retirement without drastically boosting the amount they save will be in for a shock. But then, this is precisely why such a wake-up call is needed. By outlining the steps that people need to take, which may involve temporarily downgrading their lifestyle to free up funds, the author performs a valuable public service. Ignore his warnings at your peril.
How To Own The World: A Plain English Guide To Thinking Globally And Investing Wisely, by Andrew Craig. Create Space Publishing (£13.99).
