Part 123

This week I discuss the impact of the war in Ukraine on the stock market. Also, information on how to help the people of Ukraine, and a few words on the stress of applying for a mortgage. First, the Quote of the Week:

This week’s quote refers to an old adage amongst stock market investors.  There are two types of market; a bull market and a bear market.  The former describes a time when the economy is generally doing well and many stocks are rising in value.  The latter describes the situation when the economy is not doing well and stocks are dropping in value.  It’s probably fair to say that we are in something of a bear market now.  With the pandemic still having an impact, and the war in Ukraine, many stocks have plummeted in value.  I talked about this risk a few weeks ago, but from a financial standpoint, it does not have to be completely negative.  With values dropping and the new financial year approaching, it’s the perfect time to take advantage of depressed unit prices and get more bang for your buck; in other words, more units of stock per unit of currency invested.

I suspect we will not see a proper recovery until the war in Ukraine is resolved one way or another.  Assuming that Putin doesn’t go the nuclear route, I can see a conventional war lasting a long time.  The Ukrainian people are fiercely protective of their freedom and will fight to the last.  Even if Russia can occupy the major population centres, they will have to cope with an insurgency that will make the Russian war in Afghanistan look like a bad day at the office.  

Whilst it may seem insensitive to discuss investment opportunities caused by the war, one has to remember that the war is going to happen regardless of what most people do with their money.  Whether I choose to put money into the stock market or not, the war will continue.  It’s not as if my investment choices are affecting the war.

Anyway, back to the bull and the bear.  The quote explains how it can take a while for a market to increase in value, and it generally does it step by step over time.  However, it’s not uncommon for stocks to fall off the edge of a cliff when something bad happens like Brexit or a major war.  If you look at the records on the first trading day after the Brexit referendum, the FTSE took a pasting.  Some banking stocks lost over 30% of their value in minutes.  Over time they bounced back, but it only took a few minutes to wipe out months, or years, of gains.  Although I have no concerns about investing more money during this crisis, I would caution anyone thinking of throwing lots of money at it right now.  It may be a long time before you see any return, and you may need the cash before any return is realised.  In short, only invest what you can afford to go without for up to ten years.

Weekly Update

I don’t know where my time off work has gone.  It seems that each day has followed the same pattern; checking the news and my messages to see if my friend in Kyiv is ok.  Then, the occasional bit of exercise, and lots of listening to audiobooks.  

The one major frustration I had was dealing with our electricity supplier, Octopus.  Since November last year, we have not been able to get any data from our smart meter.  They’ve spent weeks trying various fixes remotely but nothing worked.  So, they arranged for an engineer to come out.  I have made Octopus aware many times that there are issues parking where we live.  This never gets communicated to the engineer, so when they turned up they have to leave because they couldn’t park.  The engineer explained that they would book it back in as a two-person job so one person could stay with the van whilst the other did the work.  

The new appointment was for Thursday last week.  This was booked in a month ago and I was assured that the engineers would know the situation.  So, it was pretty annoying when I received a call the day before the appointment from the engineer asking what the parking was like, and explaining that he might have to cancel the job if they couldn’t park.  He reasoned that because the engineers are self-employed contractors, they can’t justify two people taking time out to do the job.  

I was not happy.

I gave Octopus a call and was eventually promised that the work would definitely go ahead.  On the day of the appointment, a different engineer called to ask about parking.  It took a large amount of restraint to not lose my shit, but I stayed calm and explained the situation once more.  

Eventually, an engineer arrived on-site.  What happened next was just bizarre.  As we opened the meter room in the basement of the apartment block, the data started coming through again.  The engineer didn’t even have to touch the meter.  No one could explain why it stopped working for three months, and then suddenly started again.  

I hate dealing with utility companies.

On Saturday we went for a meal at Rafters, a fine dining restaurant in Sheffield.  It’s the fourth time we’ve eaten there and the usual high standards were met once again.  The two dessert courses at the end were not to our taste, but we appreciated the work that went into them.  Some pictures below:

Whilst we were talking over dinner, our conversation turned to our experiences at university.  This in turn led to me telling a story from my time at the University of Leicester.  I was on a bus with two friends heading back to our halls after lectures.  We were on the top deck, near the front.  The two friends were sat next to each other, and I sat in front turned to the side so we could talk.  Anyway, as we were talking I was rolling up my bus ticket and I went to flick it at the window.  I got my aim slightly wrong, and the rolled-up ticket shot from my leg like a well-aimed sniper round and hit this guy on the back of the head.  He had very short hair and the sound it made was very satisfying.  He turned around whilst rubbing the back of his head wondering what the hell had just happened.  It was a busy bus so it wasn’t immediately obvious who did it.  I had sunk into my seat and was curled up into a ball laughing my ass off silently.  My whole body was shaking and I could barely breathe.  My face turned a shade of crimson and I had tears coming down my face.  I’m not sure why it was so funny, but I think I peaked that day.  I have no idea who he was, but if he’s reading this post now, I want him to know that it was me.

A Brief Interlude

I’ll never hide this blog behind a paywall, but it does cost money to run the site.  I spend a minimum of six hours each week writing the blog, and maintaining the other parts of davidscothern.com.  It is a labour of love.  However, many of you have asked how you can show your appreciation.  I set up a Buy Me A Coffee page but the main feedback was that you couldn’t pay by card.  Well, now you can!  My page now supports card payments and Apple Pay.  So, if you want to show your support and appreciation for the content I create, please buy me a coffee.

2022 Goals – to be achieved by 31/12/2022

1 – Reduce weight to 90kg.  (Current weight 122.5kg).

2 – Complete 10 “classic” books.

  1. Crime and Punishment by Fyodor Dostoevsky (1866)
  2. Moby-Dick by Herman Melville (1851)
  3. Dracula by Bram Stoker (1897)
  4. Catch-22 by Joseph Heller (1961)
  5. The Iliad by Homer (8th century BC)
  6. The Count of Monte Cristo by Alexandre Dumas (1844) ✅
  7. War and Peace by Leo Tolstoy (1867)
  8. A Tale of Two Cities by Charles Dickens (1859)
  9. Les Miserables by Victor Hugo (1862)
  10. Don Quixote by Miguel de Cervantes (1605)

3 – Read 10 authors I’ve not read before.

What Am I Doing?

What I’m reading: The Future of Another Timeline by Annalee Newitz. 

What I’m listening to: The Dark Forest by Cixin Liu

What I’m watching: The Witcher on Netflix

I’m finally building some momentum with my efforts to lose weight.  For the last few weeks I’ve either maintained my weight or lost some.  I’m roughly 3.5kg lighter than I was two months ago.  

After finishing The Count of Monte Cristo I decided to go back to some of my favourite audiobooks.  I listened to The Three Body Problem again, and I’m now halfway through the second book in the series, The Dark Forest.  These books are part of a trilogy by Chinese author Cixin Liu, called The Remembrance of Earth’s Past.  I love this series.  It deals with Earth’s first contact with an alien civilisation and the scope of the story is incredible.  It also raises many philosophical questions about our place in the universe.  I discovered this series by accident whilst reading some theories about the Fermi Paradox, which attempts to answer why we have not detected alien life despite there being high estimates for the likelihood of its existence.  The Fermi Paradox led me to Dark Forest theory, which is both terrifying and compelling in equal measure.  The basics of Dark Forest theory are that all civilisations have a desire to exist.  Once contact is made with another race, we have no way of knowing or proving their goodwill.   So, the safest thing to do is destroy them before they destroy you.  The assumption is that all intelligent life has realised this fact, and so alien civilisations protect their location for fear of extinction. 

We have just finished season two of The Witcher.  I think the second series was better than the first.  Although I enjoyed the show, it’s not one that I think I’ll keep coming back to. 

Financial Update

Assets

Premium Bonds: £7,200.00 (no change from last update).

Stocks and Shares ISA: £39,613.67 (down £5,242.03 from last update).

Fuck It Fund: £5,050.00 (no change from last update). 

Crypto: £0.00 (no change from last update). 

Pensions: £50,394.00 (up £1,873.39 from last update).

Residential Property Value: £213,900.00 (no change from last update).

Buy-to-Let Property Value: £138,030.00 (no change from last update).

Total Assets: £454,187.67 (down £3,368.64 from last update). 

Debts

Credit Card: £655.61 (up £9.31 from last update).

Residential Mortgage: £164,858.62 (down £406.09 from last update).

Buy-to-Let Mortgage: £92,903.78 (down £36.02 from last update). 

Total Debts: £258,418.01 (down £432.80 from last update).

Total Wealth: £195,769.66 (down £2,935.84 from last update).

Investment Income in 2022: £425.29 (target £6,000).

The war in Ukraine has hammered the stock market.  I’m about 15% down from the peak value of my ISA.  This isn’t a real loss though, as losses are only definite when you sell.  The market will bounce back in time.

I had paid my credit card down since last week, but then we spent some more on Amazon.  I just haven’t gotten round to paying it down but I’m not worried as I’ve got the funds in the bank.  As long as the balance is paid in a month I don’t get charged interest.  Also, we’ve donated to the DEC for their appeal for Ukraine.  You can donate here:

https://donation.dec.org.uk/ukraine-humanitarian-appeal/

The work on our BTL is progressing.  I had a call with the contractors this week and they expect to be finished by the end of the coming week but cautioned that it may run a day or two into the following week depending on what they uncover as they go.

I am impatient to get a tenant in so we can start earning some more income, and also release some funds from the property.

The Mortgage Process

I had an interesting conversation with someone on a forum I frequent.  The person was asking for some information and advice about whether to borrow money against their unencumbered property with interest rates being low.  The money is for home improvements.  

People, in general, have very little knowledge about the mortgage process.  It’s a mystery to most people I speak with and is the cause of a great deal of stress.  I was reading in an article, that a survey of borrowers suggested that in a list of stressful situations applying for a mortgage was the third most stressful thing behind losing your job and the death of your pet.  Many people, according to the study, would rather be stuck in a traffic jam than apply for a mortgage.  It doesn’t have to be this stressful though.

The key to making the process less stressful is simple; seek expert advice, and actively listen to that advice.  Don’t be that person that just waits for their turn to speak.  Also remember that if you are asked for something, it’s not just for the sake of it.  You will only be asked for relevant information.  If your GP asks for your symptoms, you are not going to discuss what you are watching on TV.  If you get a plumber, you are not going to ask their advice about cooking.  

Biolink

You can now find all my social media pages by checking out my Biolink at bio.link/davidscothern.

Please show your support

I spend several hours each week writing this blog and make it freely available to all readers.  I do not hide my content behind a paywall.  However, maintaining a website incurs costs.  If you can afford a small donation, it would be gratefully accepted.  Click on the Buy Me A Coffee image to be taken to my supporter page.  You can either make a one off donation, or sign up to a monthly subscription.  If you can’t make a donation, please share my blog on your social media.

You can still see Sweep’s Instagram @sweep_the_kelham_island_cat.  

Finally, have a look at Darren Scothern’s fantastic blog at darrenscothern.com.

2 thoughts on “Part 123

  1. I think I’m fairly organised with my personal finance documents but I can see why some people would find mortgage applications stressful. With nearly all information being online, applications are a lot easier than when you used to have to arrange a face-to-face meeting with an advisor and turn up at the branch with hard copies of your wage slips, bank statements etc and hope you had everything with you but I guess if you don’t keep on top of your online statements etc, it can be an overwhelming task.

    I had some issues proving my wealth was my own (Premium Bond statements only show amount of bonds purchased but not when they were bought – these dates are in their internal ‘messages’ only, so not very useful!) but I was able to prove it in the end, though had to go back nearly 5 years.

    Liked by 1 person

    1. The more organised you are, the easier it is. You are organised and financially savvy, so there shouldn’t be issues unless your lender is incompetent 😂

      The easiest way to get a mortgage without stressing is to just do what your advisor tells you; nothing more, nothing less.

      Liked by 1 person

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