By Rachel Winter
This week, Rachel Winter, Killik & Co takes the Notebook pen
Looking for investment inspiration in my hometown
Investment insights are all around us. Here are some of the things I noticed while taking a walk around my hometown of Woking this weekend.
As is typical on sunny Saturday mornings, dozens of dogs were bounding merrily around the park, showing that the lockdown-induced boom in pet ownership is still going strong. Nestle grew its sales of Purina pet food by 12.1 per cent in the last year, and profits at animal healthcare company Zoetis were up nine per cent.
More than one third of UK adults are now thought to have a side hustle, which was evidenced in Woking by the copious amounts of professional dog walkers and Deliveroo drivers. Side-hustlers need to complete tax returns, and therefore a beneficiary of the trend has been Intuit, which provides tax preparation and accountancy software such as QuickBooks and TurboTax.
There is a sign in the coffee shop window saying ‘card payments only’. The number of bank branches in the UK has fallen by half since 2015, and many small businesses now find it easier not to accept cash. This has been good news for payments companies such as Visa, which reported a 10 per cent increase in transactions in its last set of full-year results.
My favourite chocolate bar has been hit by the widespread ‘shrinkflation’ phenomenon. Cocoa prices have soared by 120 per cent in the last 12 months and are currently at record highs, owing to a spate of bad weather across West Africa where the majority of cocoa beans are grown. Big chocolate companies such as Cadbury-owner Mondelez have warned of shrinking profit margins and have reacted by shrinking their products.
The phone in my pocket was made by Google, the headphones were made by Apple, and the sounds coming through the headphones were facilitated by Spotify. Most of the companies that sprung to mind as I looked around were not British, and sadly this lack of Britishness also applies to the global stock market. UK companies now make up less than four per cent of the highly regarded MSCI World index, while US companies account for over 70 per cent. It’s little wonder that investors in the UK are seeking increasingly global portfolios.
The Ride of a Lifetime
I really enjoyed reading the memoir of Bob Iger, CEO of the Walt Disney Company. It’s a fascinating story of a much-loved brand, detailing the global expansion of the parks and the acquisitions of Pixel, Marvel and Star Wars. Iger retired from the business in 2021, and the shares subsequently lost over 50 per cent of their value. He has now returned, and the company has just celebrated its 100-year anniversary. Investors will be watching closely as he strives to make Disney+ profitable in this world of streaming – could this be a critical year for Disney?
Happy birthday parkrun
This year will mark two decades of parkrun. I’m extremely late to the party, having only just signed up, but I feel quite awestruck by what this wonderful not-for-profit organisation has achieved. There are now over 1,200 weekly parkruns in the UK and over three million Brits have taken part.
In a world where so many of us spend much of our lives sitting down in front of screens and communicating virtually, anything that encourages social outdoor exercise should be celebrated. I’ll be back for more – in Woking Park, of course!
End of tax year tip
In addition to the usual £20,000 annual ISA allowance, any money taken out of an ISA within one tax year can be replaced before the end of that same tax year. This can be beneficial to those taking an income from their ISA who have additional assets in their main account. Before 5 April, the value of the income withdrawn from the ISA can be replaced using assets from outside the ISA.
Quote of the week
“It’s about time in the market, not timing the market”
The fact that the S&P 500 and the Dow Jones Industrial Average have both hit new record highs makes this adage truer now than ever. Both indices have now recovered from every single crash they’ve ever had, and investors who stayed the course will be in the money.
Starting the week with the Prof G Pod
The Prof G Markets podcast with Scott Galloway and Ed Elson is the only finance podcast that makes me laugh out loud on my commute. Finance does not have to be boring! The podcast is uplifting and incredibly informative, and I look forward to it every Monday.
