How to Own the World: A Plain English Guide to Thinking Globally and Investing Wisely: The life-changing personal finance and investment bestseller

by Andrew Craig

On retirement, you will need to think about switching your investments from ‘accumulation’ to ‘income’ (more

misnomer

including the editor of the first edition of this book, whom I employed on the basis that they had expertise in financial services

lmao

If you are to have any chance of making a real return on your money, you need to invest in things that have a chance of outperforming inflation.

static

It is illegal in the USA, for example, which is a great shame for Americans.

betting a certain monetary value ‘per point’ on whatever asset you have a view on.

between 80 and 90 per cent of people who spread bet lose money.

or those who know how to use spread betting effectively.

‘syndicated loan’

‘credit risk’)

they are a government’s main source of money other than taxation.

The only real exceptions are small economies with a huge natural resource endowment per capita and decent political leadership, such as Norway.)

2012

investors from all over the world were becoming significantly less willing to buy the bonds of countries in Europe

Greece, Italy, Spain, France, Portuga...

both the USA and the UK can invent new money out of thin air to buy their own bonds (QE)

control of their own currencies (rather than the euro, which is controlled by a group of nations – meaning that no single nation can print more of it unilaterally).

variable rate mortgage

Any government that has mismanaged its financial affairs will find itself having to drop the prices of its bonds in order to sell them. This results in the extremely unpopular and economically damaging reality of higher interest rates, as the alternative is not being able to raise money on the bond markets at all.

The Italians, Irish, Spanish, Portuguese, Greeks and so on need to invent money out of thin air to deal with their enormous debts. German politicians, however, are reluctant to let them do this, given their more prudent approach to economics.

100 trillion note

the amount of new money created exceeds the quantity of new real economic activity and, as a result, the effect is ultimately inflationary and not wealth generative.)

an unattractive feature of stock market capitalism can be significant wealth inequality

Stock market investment is not the preserve of the wealthy – or certainly should not be; it is available to anyone who is willing to find out about it and get involved.

I would argue that the richest 1 per cent of people in the world – the developed world at least – are generally quite simply the most economically and financially literate 1 per cent of people.

‘price to earnings ratio’

The P/E ratio is arguably the single most important thing you will ever learn about shares.

The share price tells you nothing about how fundamentally expensive or cheap a share is – unless you are also looking at the multiple of profits that each share costs.

important to look at how much that company has traditionally paid out in dividends

The word ‘salary’ comes from the fact that Roman soldiers were originally paid in salt (sal),

Jim Rogers,

Hot Commodities

the Foreign and Colonial Investment Trust

‘mandate’.

These days even the super-rich will tend to use a tracker or index fund to own the FTSE 100 stocks, as they would see too much of their potential return eaten up in fees if they actually bought all of the stocks in the FTSE 100 Index individually.

Paying for 100 separate transactions in order to end up owning all of the companies in the index is clearly not ideal when you can pay once to own a tracker fund and have basically the same exposure. A fund is also much less work, as you can imagine.

New York Stock Exchange

Deutsche Börse

Dow Jon...

N...

S&...

Nikke...

Hang Se...

DA...

CA...

Faster-growing companies will often have faster-growing share prices, which means you may have the opportunity to make higher returns with successful smaller companies than with very large companies.

Equally, if you think biotechnology companies are likely to have a good time, you can own them via a biotech index.

(graphene, thorium, tungsten, water, coal mining in Bangladesh, Brazilian oil, property in Montenegro, diamonds – the list is very, very long),

For example, if you believe that the German stock market will suffer due to a eurozone crisis, you can ‘short’ it.