Money in the Bank?

Safe as houses and money in the bank are expressions unfortunately linked.

As you know, the primary purpose of a bank is to make money for its owners. Inevitably this laudable objective has the perhaps unintended consequence that risks are taken. Nothing is more tempting – well there are other temptations in this wicked world – than to lend money secured against the value of property. When a property bubble bursts, as all bubbles do from the South Sea B to today, banks go bust. Shareholders with money in the bank are the losers as a supposedly safe investment paying a good dividend goes up in smoke.

Irish investors have learned this lesson the hard way and now history has repeated itself in California and Switzerland; albeit it is not specifically property this time. Not many of us will have bought shares in Credit Suisse but usually we get bitten in the bum anyway because pension funds and international investment funds have filled their boots. So it is pleasing to see, at first glance, that UK funds have negligible exposure unless they hold derivatives of which I am unaware.

Meanwhile the shares I do hold are at best marking time. Two safety plays – McInroy & Wood Balanced Fund and Personal Assets are holding their value but of course are losing ground in real terms when inflation is taken into account. Tomorrow morning MP Evans will announce full year results for year ending 31st December 2022. I expect them to confirm the trend of rising palm oil production and yields. The share price does not reflect the underlying value of the company but this will not change unless there is a takeover bid. However, they do yield in excess of 6% and I will eat my olive green baseball cap if there isn’t a dividend hike again this year.

I spent a weekend in the country and hired a VW Polo – this is what I got: a Hyundai Tucson SUV.