1 00:00:00,000 --> 00:00:07,920 This year I'm going British, the Times write, the US markets are running at a PE of 30, way 2 00:00:07,920 --> 00:00:14,560 above their historical average, with UK markets running at a PE of 11, which is 10% less than 3 00:00:14,560 --> 00:00:21,200 their historical average. Now markets dislike uncertainty, the future of America under the 4 00:00:21,200 --> 00:00:30,160 Musk-Trump presidential duo is for me anything but certain. Whereas in the UK, Rexis is finally 5 00:00:30,160 --> 00:00:36,080 in the rearview mirror and the change of government is done with the majority of bad news out there. 6 00:00:37,360 --> 00:00:43,920 So this is my year to go British. I mean looking back on my 2024 investment year, 7 00:00:43,920 --> 00:00:51,120 I honestly wouldn't change anything. I achieved 10% in a market where the S&P achieved 26%, 8 00:00:51,840 --> 00:00:58,720 but I slept at night. You know what, I spent 17 years in PBC in Deloitte advising clients on 9 00:00:58,720 --> 00:01:06,560 risk management. If I had thrown 100% of my portfolio of the S&P 500, it would have been 10 00:01:06,560 --> 00:01:13,360 dishonest, dishonest to me and the work I've done with countless clients over my working life. 11 00:01:14,480 --> 00:01:21,200 I've set the groundwork for 2024. The SIP provider of choice was Free Trade and my research 12 00:01:21,200 --> 00:01:27,920 platform was Wall Street Zen and neither of these really provided good information on UK-based 13 00:01:27,920 --> 00:01:34,960 companies. The 2025, I've switched things up. I've swapped Free Trade for an Instructive Investor 14 00:01:34,960 --> 00:01:42,560 and I've switched Wall Street Zen for Seeking Author. Now both these platforms provide everything 15 00:01:42,560 --> 00:01:51,520 I need to go British in 2025. Here we go. There's one from 23 hours ago, the UK stock market out for 16 00:01:51,520 --> 00:01:57,440 2025 by Graham Evans, just what I'm looking for. So it says here that there's little doubt that 17 00:01:57,440 --> 00:02:05,600 many UK shares are cheap compared to overseas rivals, but will investors chase them higher 18 00:02:05,600 --> 00:02:13,680 over the next 12 months? A number of analysts think so. And that's certainly true. The UK market is 19 00:02:14,480 --> 00:02:19,600 significantly cheaper than both the US and the European markets at the moment. So it goes on 20 00:02:19,600 --> 00:02:24,800 here to say that the threat of global tariffs and the slower pace of energy recovery means the 21 00:02:24,800 --> 00:02:31,440 longer waited re-rating of the FTSE index is far from certain. So there's a term that everyone 22 00:02:31,440 --> 00:02:37,280 might be familiar with re-rating. So in terms of re-rating, it's basically talking about investors 23 00:02:37,280 --> 00:02:44,560 deciding that a particular market is too cheap and investing heavily into it. I would say in the 24 00:02:44,560 --> 00:02:52,880 first five months of 2024, there really was some momentum in the FTSE 100, but that did fizzle out 25 00:02:52,880 --> 00:02:58,800 for the final remaining seven months of the year. It comments on the fact that the limited 26 00:02:59,600 --> 00:03:07,680 exposure to the tech market has had an impact and that some of the sectors are seeing a little bit 27 00:03:07,680 --> 00:03:14,000 old fashioned really. It goes on to list some of the big losers here. So we've got the likes of BP 28 00:03:14,000 --> 00:03:20,960 and the RGO, et cetera. But it does mention acceleration in bid activity. This is the activity 29 00:03:20,960 --> 00:03:26,800 relating to the buying and selling of businesses and the mergers of businesses, which is always a 30 00:03:26,800 --> 00:03:33,840 good sign for an economy if people are actively looking to invest in companies. And the fact that 31 00:03:33,840 --> 00:03:39,760 the UK market is seen as very cheap at the moment really helps here. It says here that approaching 32 00:03:39,760 --> 00:03:45,600 the start of the new year, the FTSE 100 index trades on the price to earn in multiple just over 33 00:03:45,600 --> 00:03:54,000 11 times, well short of the average of 12.8 times since 87. And that does really demonstrate how 34 00:03:54,000 --> 00:04:03,600 cheap the UK market is at the moment. So it refers here to the Bank of America lifting the region 35 00:04:03,600 --> 00:04:10,880 to market weight, whilst Germany has been switched to underweight. So what does that actually mean? 36 00:04:10,880 --> 00:04:17,120 Analysts using market weight is a good sign, whereas if they're actually using underweight, 37 00:04:17,120 --> 00:04:26,400 it is a sign that they are suggesting that the indexes perform particularly badly. An analyst 38 00:04:26,400 --> 00:04:32,720 might recommend that an investor reduces their holding of underweight stock so that it weighs 39 00:04:32,720 --> 00:04:41,280 less in their portfolio. Deutsche Bank have also weighed in here and they say that it is optimistic 40 00:04:41,280 --> 00:04:49,280 in UK believing that the market boasts the best risk return portfolio in Europe. And it talks about 41 00:04:49,280 --> 00:04:55,200 having a good balance between cyclical and defensive sectors. It also talks about the fact 42 00:04:55,200 --> 00:05:02,320 that now we've got the general election out the way and Brexit discounts are fading into the past. 43 00:05:02,320 --> 00:05:09,680 They could also be good signs and good reasons to like UK stocks. Interact Investor has thousands 44 00:05:09,680 --> 00:05:15,360 of hours of reading material and videos about investing. And I find the good proportion of 45 00:05:15,360 --> 00:05:21,440 their content is actually UK focused. They are a British investing platform after all, 46 00:05:21,440 --> 00:05:29,360 and they're not just the UK arm of an American platform. So if you need to invest in, what are 47 00:05:29,360 --> 00:05:36,480 some of the basic services you'll find on an investment platform? And where do people 48 00:05:36,480 --> 00:05:43,920 open in a sip generally place their investments? Almost half of people invest in funds, 49 00:05:44,640 --> 00:05:52,960 nearly 20% in investment trusts, 21% in shares, and the rest really in ETFs. It's not really very 50 00:05:52,960 --> 00:05:58,240 surprised that so many people invest in funds because when you do join a platform, you generally 51 00:05:58,240 --> 00:06:05,280 invite it to a fund. And these investments where your money is pooled with other investors to buy 52 00:06:05,280 --> 00:06:11,200 a variety of assets. And usually there's a specialist manager who looks after the fund on your behalf. 53 00:06:12,000 --> 00:06:19,200 So how is a fund different from an investment trust? Well, investment trusts issue a set 54 00:06:19,200 --> 00:06:25,760 amount of shares, whereas funds add more shares as you join the fund. So when you buy a share in 55 00:06:25,760 --> 00:06:32,000 an investment trust, you're actually buying that from someone who wants to sell it. Whereas in a 56 00:06:32,000 --> 00:06:41,040 fund, you're just buying a brand new share. So how is a fund different than an ETF? Well, a fund is 57 00:06:41,600 --> 00:06:47,360 where multiple investors spread their investments across multiple investments, whereas ETFs are 58 00:06:47,360 --> 00:06:54,960 actually traded on the stock market. And a generally passive, which means you're not paying a manager 59 00:06:54,960 --> 00:07:00,160 to actually invest on your behalf. So they do work out cheaper generally. 60 00:07:01,360 --> 00:07:07,440 So I mentioned interact investor, a British company. So here we are, founded in 1995, 61 00:07:08,160 --> 00:07:14,960 headquartered in Manchester with offices in London and Leeds. And they are, as you'd expect, 62 00:07:14,960 --> 00:07:21,840 protected by the financial services compensation scheme. So let's see what a typical interactive 63 00:07:21,840 --> 00:07:31,440 investor customer will invest in. Let's see if there is a skew towards British companies or whether 64 00:07:31,440 --> 00:07:40,320 US investments are leading the charge. Okay, top five shares. So in number one, we've got Tesla, 65 00:07:40,320 --> 00:07:47,040 followed by Nvidia, followed by MicroStrategy, followed by Apple. And it's not until we get to 66 00:07:47,040 --> 00:07:54,880 number five that we head to British company with Rolls Royce Holdings. As for funds, the Vanguard 67 00:07:54,880 --> 00:08:04,720 funds are always popular. Got 80% equity at the top there. Number three is 60% equity. And four 68 00:08:04,720 --> 00:08:12,160 is 100% equity. So the more equity you have in your fund, the higher risk it is generally. 69 00:08:12,160 --> 00:08:19,840 So investment trusts here, we got Alliance, Whitton at the top there, Scottish mortgages, 70 00:08:21,680 --> 00:08:25,680 City of London there, number five. So we do have a bit of a British skew here. 71 00:08:26,640 --> 00:08:35,920 ETFs then, we've got the S&P 500 at the top, the MSCI World, number two, another S&P and third, 72 00:08:35,920 --> 00:08:44,480 and fourth and fifth are both World ETFs. So let's have a look at how much it typically costs per 73 00:08:44,480 --> 00:08:50,800 year to join one of these investing platforms. So I put in my pension pot value here. I currently 74 00:08:50,800 --> 00:08:59,760 have 138,000 in my pot and do a compare against the different providers here. Interactive Investor, 75 00:08:59,760 --> 00:09:07,360 164 pound annually compared to the Vivid 508 standard life at 759, Harb, Greavesland, 76 00:09:07,360 --> 00:09:14,960 Alistair 621 and AJA Bell at 348. So quite a discount there once using Interactive Investor, 77 00:09:15,680 --> 00:09:22,080 which is one of the reasons I chose them. In terms of buying and selling shares, there is a 78 00:09:22,080 --> 00:09:29,120 399 charge on Interactive Investor, which some of the platforms don't have. But I do know I've 79 00:09:29,120 --> 00:09:33,920 been trading too heavily during the last year, so that's not too bad.