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