What to buy after the stockmarket swoon?
After the falls in the stockmarkets, it’s time to look for stable, low-debt stocks at reasonable prices, says Merryn Somerset Webb. That is more easily said than done, however.
Wondering what caused the stock-market swoon earlier this week? The clues are on almost every page of the newspapers and have been for months. In the UK, the minimum wage and auto-enrolment pension contributions made by employers go up in April. And a review of employment practices may award holiday and sickness pay to millions of workers in the gig economy.
In Japan, Prime Minister Shinzo Abe is demanding that employers offer 3% pay rises across the board. In Germany IG Metall, the country's most powerful union, has just won a 4.3% wage rise for 900,000 members and the right for all to demand a 28-hour working week (no, you aren't alone in wishing you were a metal worker in Baden-Wrttemberg). In the US, millions of employees are getting one-off bonuses, staff benefits are on the up (staff at Walmart are to get maternity leave for the first time) and in January average wages rose 2.9% on the year (a number so unexpected that mainstream economists insist it is suspect).
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Normalising wage growth and bond yields are good news: they tell us that there is a chance that for the first time since the great financial crisis the global economy is managing self-sustaining growth. We have felt for ages that central banks should give up on their extreme monetary policy now, if they want to stick to their inflation targets, they won't have a choice. Hooray. What all this does mean, however, is that you need to be more careful than ever about how and where you invest markets (being made up of the emotions and prejudices of their millions of participants) hate change.
So there will be no end of mini-panics of the type we saw on Monday. The most vulnerable investments will be those that have benefited the most from very low rates (property, companies with large amounts of debt) and those that have been driven to what the ex-chair of the Federal Reserve Janet Yellen calls "elevated" prices by cheap money.
It's time to look for stable, low-debt stocks at reasonable prices. That is more easily said than done, but we will, as usual, be on the look out. Most people won't think that Chinese internet stocks fall into this category but reserve judgement until you have read Rupert Foster's take in this week's cover story. You may end up a convert.
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The UK areas which saw biggest jump in asking prices in 2025 – is yours on the list?We look at the UK areas where asking prices rose the most last year.
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‘Sandwich generation’ carers losing £6,000 a year to support elderly relativesMiddle-aged adults are often caught between caring for children or grandchildren and their elderly parents, leaving them taking time out of the workforce and facing a huge hit to wages while they are still trying to save for retirement. We look at the true cost of caring.
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What to do as the age of cheap money and overpriced equities endsEditor's letter The age of cheap money, overpriced equities and negative interest rates is over. The great bond bull market is over. All this means you will be losing money, says Merryn Somerset Webb. What can you do to protect yourself?
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Investors are bullish – but be very carefulEditor's letter Many investors are buying the dip, convinced the latest upswing is the start of a new bull market. The odds are that it’s not, says Andrew Van Sickle. The bear has unfinished business.
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The MoneyWeek approach to investingEditor's letter At MoneyWeek, our aim is simple: to give you intelligent and enjoyable commentary on the most important financial stories, and tell you how to profit from them. So how do we do that?
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Celebrity bitcoin ads echo the subprime mortgage crisisEditor's letter A wave of ads featuring celebrities punting crypto to the masses are reminiscent of how low income Americans were encouraged to take on loans they couldn’t afford, says Merryn Somerset Webb.
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Will the UK's property slowdown turn into a house-price crash?Editor's letter As the cost-of-living crisis intensifies and interest rate rise, it is hard to see reasons for UK house prices to keep rising, says Merryn Somerset Webb.
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The unintended consequences of ESG investingEditor's letter Many people are refusing to invest in energy companies, citing "ESG" concerns. But we still need fossil fuels, says Merryn Somerset Webb, and will for years to come. Boycotting the sector is a bad idea.
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What sardines can teach investors about today's marketsEditor's letter A California tale of “eating sardines” and “trading sardines” can help us divide investments into speculative and real, says Merryn Somerset Webb. Something that's very useful when looking at today’s markets.
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The market finally seems to be getting itEditor's letter Reality checks are coming fast to the markets, says Merryn Somerset Webb – with even 2022’s safe havens beginning to reflect recession worries.
