Why you’re better off being Scandinavian than American
This week in MoneyWeek: the many benefits of living in Scandinavia; a student’s guide to managing undergraduate finances; and the absolute failure of absolute return funds.
We're all committed capitalists here at MoneyWeek we have a brace of walk-in cupboards especially for our top hats; our humidor has to be seen to be believed; and we have to keep our award-winning collection of monocles in a top-secret location to foil the light-fingered gangs of tweed-clad "chaps" that roam the streets of London these days (they do like a monocle).
But even we have to admit that sometimes just sometimes we like not going bankrupt if we get sick. We enjoy being able to eat if we fall on hard times. And, to be frank, the ugly whiff of Westernwealth inequality does rather spoil the bouquet of a fine Claret.
It's against this backdrop that regular contributor Jonathan Compton writes this week's cover story. Jonathan's no pinko in fact he describes himself as "a robust capitalist much in favour of lots of money". But he admits to becoming perplexed when, in their vocal opposition to President Obama's reform of the US healthcare system, many Americans recoiled in horror. "This bill will make America like Scandinavia", they wailed. Odd, thought Jonathan. What's wrong with Scandinavia?
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It turns out there's very little wrong with Scandinavia. "American or British, young or old, rich or poor or an investor you're better off being Scandinavian", he says. Infant mortality runs at half the rate of the US, and while we in Britain are proud of our NHS, it comes a poor second to Nordic healthcare systems. Scandinavians are better educated; they're more law-abiding; they're better off, even while working fewer hours. Their pensions are more generous, and the gap between their poor and their rich is narrower. They're happier.
But, of course, there is a catch. All this doesn't come cheap. The flipside is that Scandinavians pay higher taxes. But, says Jonathan, if Britons and Americans got the chance to live like their Nordic cousins, "who knows how many would happily opt for a similar model".
"Look, this is all very nice", you may be thinking, "but what's in it for me?" Money. Obviously. Nordic stockmarket returns "have beaten most of their leading global peers, including the FTSE All Share and Eurofirst 300", says Jonathan. Jonathan picks the best ways to invest whether you prefer funds or stocks. Find out exactly how you can buy into the Scandinavian dream with a subscription to the magazine.
No returns from absolute return funds
"Absolute return" or "multi strategy" funds were meant to bring investors a decent return whatever the wider market was doing. In the last year, given the bullish state of the markets, says Max King, "a UK investor with a diversified portfolio should have returned more than 10%". But an average multi-strategy fund made just 0.2%. "What has gone wrong with a fund sector widely regarded as the answer to the prayers of risk-averse investors?" Max attempts to get to the bottom of things.
Does Dow Theory work?
You may have heard of the "Dow Theory" of investing. It's very simple. In a nutshell, you buy stocks when both the Dow Jones Industrial index and the Dow Jones Transportation index are rising, and sell when they're both falling. Result: happiness.
Well, that's the theory, anyway. But it's been around for a long time now, and many investors swear by it. In his investment strategy page this week, Matthew Partridge looks at just how effective it is. Find out what he thinks by signing up to the magazine.
Back to college, the perils of AirBnB, and the rise of cybercrime
Thousands of fresh-faced new students around the country will be walking nervously on to campus for the first time round about now, eager to make new friends and learn just how much alcohol they can actually take. Unfortunately for most of them, they will be "trying to make a very limited amount of money stretch as far as possible", says Natalie Stanton. To help them, she's rounded up the top financial tips for new students, helping them coax a few more snakebites out of their meagre loans.
These days, lots of people are renting out spare rooms or even whole properties as short term holiday lets, says Sarah Moore. It's "more hassle" than renting out long-term, sure, but it tends to be "far more lucrative". But it does come with risks. Sarah outlines what they are, and how to protect yourself.
The massive security breach at Yahoo shocked many people just by its scale. It's the latest in a fairly long line of big attacks. So what's going on, and why are cyberattacks on the rise? Alex Rankine investigates.
All that, plus the usual tips, news and views
On the shares pages, I have a look at the potential Twitter sale; we have our usual round-up of all the best share tips; and we bring you a digest of the week's financial news. Plus, five pages of travel (Chris Carter looks at holidays for wine-lovers this week), property, cars and wine.
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
Ben studied modern languages at London University's Queen Mary College. After dabbling unhappily in local government finance for a while, he went to work for The Scotsman newspaper in Edinburgh. The launch of the paper's website, scotsman.com, in the early years of the dotcom craze, saw Ben move online to manage the Business and Motors channels before becoming deputy editor with responsibility for all aspects of online production for The Scotsman, Scotland on Sunday and the Edinburgh Evening News websites, along with the papers' Edinburgh Festivals website.
Ben joined MoneyWeek as website editor in 2008, just as the Great Financial Crisis was brewing. He has written extensively for the website and magazine, with a particular emphasis on alternative finance and fintech, including blockchain and bitcoin.
As an early adopter of bitcoin, Ben bought when the price was under $200, but went on to spend it all on foolish fripperies.
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