2024 investing trends

We think women need to talk more openly about money. Embarrassing or confusing. Join the conversation. We'll be discussing a whole range of topics. Hello, welcome to the AJ Bell Money Matters podcast. I'm Danny and I'm usually joined by my partner in crime, Laura. But regular listeners will know that she's a big lover of her holidays and she's off on her travels, so I'm delighted to have dragged in yet another member of the Money Matters team, Charlene Young.

for what will be our last podcast episode of twenty twenty four. Hi Charlene. Hi Danny. Hi everyone. Uh it's so lovely to be here. Thanks for having me. So, just like I did with the wonderful Jenny who stepped in a couple of weeks ago, I think it is only fair to get you to introduce yourself to our listeners so they know a bit about you and your financial life. Yeah, of course. So hi, I'm Charlene Young. I'm officially pensions and savings expert here at AJ Bell.

Um but in real life, I am a mum of two young boys. Um they're seven and five, and they're now at that lovely stage where they're really excited for Father Christmas. Um, you know, it feels like it's been kind of a long time coming with both of them. So one of my boys is absolutely football mad, um, a city fan, uh, much to the uh disdain perhaps of the rest of the house.

Um and the other is pestering me for a drone and all of the Lego. It's kind of morphed um into like the Harry Potter Lego, the kind of more intricate stuff. No. And uh like Laura, I also love a holiday. Um we did Lapland UK uh very recently, just a week or so ago. Um and I'm currently on the search kind of for that big blowout break at Easter because uh we we stayed here over the summer just to kind of

save a few pennies and uh typically now I'm looking at how I can spend them as quickly as possible. Um, so, you know, I couldn't work in personal finance either with I loving a spreadsheet like Laura again. Um, and I like looking around for kind of the best deal for things. So I'm currently at the moment kind of using my spreadsheet to compile all of our details for our kind of annual review.

Um, because you know, we we've got some costs that we know are gonna spike in the new year for us. So it's just kind of double checking where we are and um that we're in, you know, a position that we can kind of weather that storm.

Now when you talk about investments and Lego, Lego is a great investment. My kids were absolutely Lego mad. I mean, they're proper teenagers now, so they're not interested anymore, but during COVID I found myself boxing up all the Lego and I deliberately kept the boxes. so that I could put all the Lego into the boxes and sell it. And I made back about 75% of what I'd paid for it. I was absolutely yeah, I was amazed by how it had kept the value. So keep the boxes. That is absolutely top tip.

I will do. Yeah, I definitely haven't done that so far. Yeah, just just flat pack them, put them down by the side of a bed or something. That's what I did. Forgot about them. And then when it came to selling them, yeah, keep the box it.

Listen, Shallon, we always get our regular pod guest to share a financial confession at the end of the episode. But we're s doing something a bit different for this one. So let's put you on the spot right now. What's your financial confession? Right, okay. Well normally, yeah, like you say, this is at the end. Um there are quite a few. Um but I think

It's perhaps a little controversial, but I actually bought into some cryptocurrency last year for a laugh and only a very, very tiny amount. No. It's very silly of me for a number of reasons, but I think But do you talk in um a sort of other content that we produce about cryptocurrency, because it's very much in the news, of course. And I think the curiosity of the kind of wild ride.

got the better of me. I'm I'm a bit of a geek and I like to kind of really know get into what I'm talking about. So I thought perhaps um it was time I had a little look at that. And like I say, it was a very, very small amount. And I do have an investment portfolio outside of that. And it it minute amount compared to um the rest I hold. Like I say.

I do feel a little bit uh silly about it. And like I say, I've got a portfolio of investments and I'm probably pretty high up on the risk scale for various reasons, including kind of past experience. But this is too much even for me. It's wise and uh Like I say, tiny amount, um, definitely not a recommendation. Uh very much do as do as I say not as I do. And uh yeah, hopefully this is kind of a safe space from the crypto bros to say that last bit there.

Well listen, you're not alone because there were some figures out from the Financial Conduct Authority um just a week or so ago. Um, we know that crypto is very much in the news, a lot of talk in the United States, particularly Bitcoin, and The Financial Conduct Authority found that the number of UK adults investing in crypto had gone from ten percent to twelve percent, that's of people who invest. And the really worrying thing was

that a third of people that were investing in crypto thought that they were protected, that they could complain to the regulator if something went wrong. So um that's why the regulator is now taking a look at this space. But Yeah, I mean as you say, teeny tiny amounts, so it was something that you were prepared to lose and I think that that is really key. So uh yeah.

Very good confession. It is one of our favorite bits of the podcast because it does give us a cheeky glimpse into other people's financial lives. And to that end, we thought.

that we would do something a bit different for this last Money Matters podcast of the year. And we're gonna give all of you a chance to peek into other people's investment choices. Yeah, I don't know about you, but I love to hear kind of what other people are doing. Um and of course, because it's money matters, we're going to be looking at the differences between what our male and female AJ B customers have been up to over the past year.

And I have to say, the dates we go back is so interesting and you know, a lot of it perhaps wasn't that surprising either. Yeah, one of the key things that stood out to me was that women are logging into their accounts about half as many times a year as men. It could be for all manner of reasons and I know

Certainly a a lot of women, my mum friends, are so busy that they just don't have time to micromanage their choices. So they think long and hard about where they're gonna put their cash. They listen to podcasts like this one, read articles. Like the ones that we've got up on the Money Matters website. And for lots of you I know, you look at the money pages of newspapers as well. But Once that is done.

we like to leave our investments to do their thing, which can be a great thing, especially when you think about the volatile year that we have had on markets. I mean we've got tensions in the Middle East and ongoing war in Ukraine and all those elections. I mean, I I think more than half the world was out for elections this year.

Um, not least the one of course in the UK earlier this year and the very recent one in the United States. And all that does impact our investments. And if we check back too often, we might not like what we see one month. decide to make a change that might not be in our best interest.

That said, it is really important not to just forget about where we've got our money invested. We should check in at least a couple of times a year to make really informed choices about how our investments are doing and whether our money is working as hard as it should. And that is just as important for cash savings as it is for investments in the stock market. Yeah, absolutely. I kind of mentioned my kind of little review um that we're going through.

as as a family as well. And like I said, apart from that kind of silly blip, I confess to before, um, it's true that kind of most people get the most out of investments by not tinkering away, kind of or chasing the next big thing and over trading. Um so yeah, that's why my confession was kind of very out of character because I'm definitely a a person who kind of buys and holds investments and

kind of stick to that that that long run path um where I can. So, you know, that's the happy by product, I guess, is the fact that women are logging in less to their accounts. Um You know, less to kind of worry about, maybe that they're not worried about that day to day noise and they're in it for the long run once they've taken that step.

into investing and they are also placing less deals than men um on our platform, which means, like I say, less dealing charges and and saving money on those costs of investing. And that that's always a good thing, really.

Um, so on the fit side, I suppose you could say women could potentially be missing out on some investment opportunities, but just because men are trading more doesn't mean they're actually catching those those good ones. So I don't know if you've kind of heard the phrase buy the dip. Um

But kind of when markets are jumping up and down quite volatile day to day, some companies can find um, you know, the individual share price can fall quite considerably in a day, kind of way below their moving average. So moving average, kind of technical term there. That's the average as stock trades out over the year. If you kind of smooth it out over a graph. Again, a bit technical, but if we kind of put it into context

um Black Friday sales obviously recently. So let's say you've bought a pair of amazing boots in the Black Friday sale, then once that's closed, they go back up. So the price they've been for the past year or so. And yeah, you're probably pretty happy you managed to bag them in the sale. Um you don't think they're necessarily worth less because you paid less for them.

So kind of share prices in companies can fall not because of actually anything the company itself has done. Obviously you are at the mercy of that individual company when you're buying a share. Um but it could just be because another company in the same sector has put out some bad news and that has kind of pulled the rest.

of the sector down. So what that can do for for those kind of good companies is really create an opportunity of buying those shares for a kind of really good price. But again, it does require a bit of time and effort to look at that sector and the companies in it if you're interested.

And one of the reasons that could be behind the fact that women are placing less trades than men is because women are generally less into dealing accounts. So, you know, buying individual shares in individual companies. much preferring pensions ices and lifetime ices. And with those last two, it could be because we really, really, really like the benefits that we get from those kind of accounts.

Both are excellent what we call ta as wrappers, which means that we don't pay tax on any investment games in the same way that we do on dealing accounts once you hit a certain threshold. And it's something a lot of us have had to think about when it comes to our cash savings too, because interest rates have been much higher over the past couple of years than they've been since 2008.

In fact, some research that we did back in the autumn showed the number of people having to pay tax on their cash savings will have almost doubled over the two years to next April when the financial year ends. Remember, the personal savings allowance, that's the amount of interest you can earn without paying tax, is a thousand pounds for basic rate taxpayers.

£500 for higher rate taxpayers and nothing if you're an additional rate taxpayer. So it is really, really, really worth making sure that you use up your ICER allowance. That is£20,000 that you can wrap up every year. But just remember, if you're also using a lifetime ISA, then that allowance is for both products. So just be aware of that.

Yeah, and just kind of while you're talking about cash there, going back to our data, it does show that women do have a bit more cash in uh than their male counterparts on our platform. Um, which is really worth thinking about'cause if you want to make your money really work for you, especially as interest rates. are starting to fall now. Um and you know, because although our platform has a cash savings hub part, if that is of interest, the most part we we help people invest. So

Sitting in cash on an investment platform in a lovely tax wrapper. It is fine if you're just kind of taking a beat and thinking about what you're going to invest in, but really make sure you don't leave it there long term and kind of forget about it.

I think another thing, um, just kind of scrolling through the data that's kind of popped tight to me is well, women have a smaller percentage of individual shares in their portfolios, so their investment barket uh baskets, if you like. We do love AFUN. So uh Laura did write a great article uh back along about how to be a lazy investor, which you can find on the Money Matters website in that article.

And and how getting a fund manager to do the work for you can be like a brilliant option, especially if you're time poor of many as many of us are, or you're not quite sure where to start. So a fund, um, it's it's known in the industry as a pooled investment. So, you know, Railspeak, I like to think of it as like a shopping basket of all sorts of different investments and you can get different flavors and different types. So

Um you can get a multi-asset fund. So just as it kind of says on the tin, that has lots of different types of assets in the fund. So assets are things like our shares. bonds, gold, and yes, even a bit of cash as well. So that one fund, that one basket has lots of different assets in it. Um, then there's also funds that aren't kind of actively managed by a fund manager.

But instead of track a particular index or part of the stock market, let's say the whole global stock market, or just one of the indexes in the UK. Um, and no, these tracker funds are really high on the list of funds held uh and bought by both men and women in our customer base. And that's kind of for good reason, as they often help you get kind of invested at a low Um you can also track certain sectors if you want to get kind of fancy. So let's say uh technology.

What was really interesting to see was that men were into funds that tracked the tech s sector more than women. I know there was a tech fund that was still pretty popular with women, but an ESG fund, so one that focuses on sustainable growth and environmental, social and governance matters, was more popular with women than tech funds. So making your money work for you, but also kind of making it work for the world at the same time. So here we when we talk about

Um ESG, we're talking about investing perhaps in things like wind or solar power over fossil fuels, but also looking at that social and governance side. So companies that really kind of look after their people and have a good work culture, you're investing in them because you think they are gonna last the course because of that.

And you can see a bit of a split as well between men and women by looking at the shares that they're buying in individual companies. So men are more likely to be buying Tesla and MicroStrategy, the tech company that's been in the news. We were talking about crypto earlier. Well, that's been in the news because it's been buying up a lot of Bitcoin alongside being a software company. Now

Both of those companies are run by men who are outspoken, not afraid to stick their necks out and take risks. I I think that's fair to say, don't you, Elon Musk? Yeah, I mean those risks don't always pay off. Um, Elon Musk, as I say, and the micro strategy co founder Michael Saylor. Marmite characters to say the least. Now, women did still have both of those companies in their top 10 shares list.

But Health Giant GSK and the High Street banking group Lloyd's ranked higher in women's buy lists, though both had at number one, have a guess. I'm gonna go with NVIDIA. You would be absolutely spot on there. Um, I mean, that is the chipmaker that has been in the news. a lot over the past couple of years. I mean, I think I saw uh up two hundred percent in five years.

Um, it's been seen as the real engine of the AI boom, which has really dominated market sentiment. And I don't think there is a day that goes by when we don't hear something about AI on those news websites. Absolutely. And I think that's just been really, a really kind of interesting lick at what our customers have been up to. And Again, it's good to see the similarities as well as the differences, you know, because we all live in the same world. We use many of the same products.

And you know, I was really pleased particularly to see women kind of making the most of those tax rappers and pensions, of course. I it no secret, I l I love a pension. So we we kind of look at the same news websites and like Deep down, we all want our money and our investments to grow so we can put it to a good use and towards the things that kind of matter to us. That's kind of the end game for most people.

Um so before we kind of wrap up the episode, our kind of big review of the year, I thought we'd just pick out And have a look at some of the key things, what's been going on kind of in the wider world, key moments that have impacted some of those investment decisions and those investments that, you know, our customers have been making. It's been quite a year, hasn't it, Tanny? It it really has been quite a year. Do you know, at the start of the year I said

I just hope there's a point where things sort of ease off so that we can maybe have that silly season over the summer, we can take a break, not have to worry about the phone going off. That just hasn't happened this year. It's been absolutely bonkers. Um, but I did mention that AI has been one of the huge market drivers. Um particularly chipmakers. So uh I'm not talking about French fries, I am talking about those semiconductors, those

teeny little pieces which are full of information technology. They make things work and movement on the AI front. And I I have to say, I challenge anyone to say that they haven't interacted In some way this year with AI in their day-to-day lives. I mean, you know, from doing really mundane tasks at work. to helping you with your purchase. I know a lot of retailers now are using AI to sort of tailor the kind of ads that you see and

Tailor what you see in that ad to make sure that it is absolutely what you are looking to buy. I mean AI is absolutely everywhere. And as I say, those chips, they're being called the pickaxes used to mine the gold in this gold rush because gold now is technology and for lots of companies and NVIDIA in particular it is proving hugely lucrative. Now there are a few things that are really worth considering because I spoke earlier about elections.

Well, the return of Donald Trump to the White House is expected to come with More than a few interesting moments when he stands at the podium. Uh and I wonder whether or not we will get the sort of repeat of that inject yourself with bleach thing. I mean, you know, some of the stuff that he says is just completely out there, but He secured a second term as president, and One of the things that he has said is that he absolutely loves

Tariffs. So there are concern that potentially we could see trade wars and chips and chip companies are already being drawn into the battle, particularly between China and the United States. And then there's the type of chip that some of these chipmakers are making because it was only a few years ago and I'm sure a lot of people, they might have a computer in front of them. It might have a little sticker that says Intel on it.

And a few years ago Intel was one of the most valuable tech companies, a huge chipmaker. But this year, for the past couple of years, in fact, it has really struggled and it's seen the value of its company halve over a couple of years because it's just not been keeping up with

the speed of the change in direction of the tech race. So whenever you are thinking about investments, you need to be thinking not just about what's happening now, but potentially what's going to be happening in twelve, twenty-four, thirty-six months, and and that's sort of a really important thing to flag.

Yeah, yeah, I'm obviously closer to home, talking about elections. We do have a new government that wasn't a quiet moment over the summer there. Um and we've had our in the first budget from female Chancellor Rachel Reeves. Um so There's a lot's been said about that, obviously since a lot of people. said in the run up that did or didn't come true. But I just wanted to kind of flag a couple of personal finance things from

So um ICER and pension allowances, they stayed the same, but so did income tax allowances and kind of the rates on what we earn. So That's kind of very good news in a way, because there were lots of rumours swirling around particularly about pensions and the allowances for what you can pay in and then what you can take out tax free is that kind of lump sum when you come to access them.

And there was a lot of talk about that being changed. So good news is that it wasn't for kind of people's long-term retirement plans, but you know, the kind of tax allowances and everything being frozen does mean that more of us are getting dragged into those higher tax pans as time goes on. You mentioned the personal savings allowance before and more people paying

tax on their savings, for instance. Uh you know, this is this is income we're talking about here and earnings, but the same kind of principle is applying, people getting dragged into those rates. So What we have kind of called the big freeze, um, is due to end um in twenty twenty eight at least, although, you know, that's still some way off looking at the fact we're in twenty twenty four.

Um the tax you pay on investment profits that aren't wrapped up in those ICE and pensions, that also went up. Um but that kind of shows what a good decision those those tax wrappers are and makes them kind of a bit more valuable when you're perhaps choosing which account to go for. Um, there were also changes to inheritance tags that have taken up a lot of the headlines, even though they might not affect all of us.

And you know, all all the loved ones we kind of plan to leave any money to. Um, one thing I will say on this. Is please please please make a will. Um I was looking at something else the other day. Over half of British uh half of British adults haven't made a will and it's vitally important. Even if you're just starting out on your investment journey and you think, oh, inheritance tax, all of that, that's not for me to worry about.

It's so important that you let people know kind of what your your wishes are. Um so please, if you can, um make that maybe one of your your New Year's resolutions. That is a really good tip and and I must admit once my first child was born, that was the sort of impetus for me to to get up and and make a will. Um, but I was also thinking, you know, when you think about all the different accounts that you have and all the different

passwords associated with those and and how many of your loved ones actually know where you've got money invested? So I think it is really important if you are making a will that you also sort of jot down Not the passwords, obviously, you don't want those hanging around.

but to jot down what people should be looking for um yeah what you have yeah absolutely you know Um, we don't necessarily have those big paper filing cabinets anymore, which um which to help me in in some situations I've had to deal with the family, but yeah, so everything's on our phone now. Yeah, that's it.'Cause it used to be that, you know, m my dad died and we did exactly that. We went through the filing cabinet and we pulled out all the letters, we knew where everything was.

You you don't get those letters to file anymore. It's all paperless. So yeah, just make sure that you do somewhere have a record of those things because otherwise, you know, your loved ones could be missing out on money which potentially that they could have coming to them, which uh

you know, is is really worth thinking about. You you were just talking about the budget. I think when we're talking about investments and we're talking about jobs at the moment as well. One of the big things which came out of the budget were changes to the national insurance contributions that employers have to make and I'm sure you've all seen it. We've had business after business, particularly in the retail and hospitality sector, coming out and saying that these increases coming so fast.

Such a big change, particularly for companies that employ people on a part-time basis who are maybe now being dragged into paying national insurance for the first time, at least their employers are, because of course this isn't impacting us, the employees. But it is likely to impact us in terms of The amount of wage increase that we might get. It's also potentially likely to impact us in terms of price rises.

So I know that we saw inflation nudge up just a bit past the two percent target, which is the Bank of England's target last month. you know, we've had a lot of warnings that potentially these businesses will have to push through these national insurance increases onto us, the consumer, in terms of higher prices. And

The Governor of the Bank of England and the OECD have both warned just in the last couple of days that that means interest rates are expected to stay higher for longer because of the measure. And I know you're going to talk about rates now.

Yeah, yeah. So interest rates sadly are still gonna cause some pain for some. So you know, we have seen the first cuts this year to the b uh the base rate from the Bank of England here in the UK, but I'm sure many people will feel, you know, they aren't perhaps coming down quickly enough to to kind of ease their financial situation. You know, on the flip side, we know those pesky banks like to kind of cut savings rates as soon as a base rate cut is announced and sometimes Even before that.

looking at lending side, a lot of fixed rate mortgage deals aren't coming down at all and these worries that we say about prices and inflation staying sticky, um whether that you know that is due to the budget or not, uh you know, that that debate is out there. But what it means for real people is that some lenders aren't ex you know, pricing in or expecting substantial cuts any time soon. Yeah, I um have been watching this like a hawk because so far I've managed to escape. I've fixed

back in twenty twenty, December twenty twenty, for five years. So I'm now looking at next December and thinking, where are interest rates going to be? How much more will I have to pay?'Cause I've just sort of assumed that, okay, five years We're now talking about interest rate cuts. Right, we might be back to sort of the three percent and

That's looking well, completely unlikely. Unlikely, yeah. Yeah. It's it is something that everyone's having to uh to really think about. Um I just wanted to mention one last thing because I know

A lot of people might be thinking about changing their car. They might have had discussions about whether or not it's time for them to potentially go down the road of looking for an electric vehicle. Do you you don't drive an electric vehicle, is that right? I do, I do. You do. Okay. Okay. Um I I lease it through through a business so it's it's slightly different. Yeah. I I think I'd be thinking twice about uh kind of buying one outright at the moment if I'm honest.

I had never driven an electric vehicle until the summer and I went to Norway and Was really surprised at how quickly it charged, how smooth it was, and actually how big the range was. Um,'cause we went hundreds of miles a and and I really enjoyed it and it made me think, okay, maybe I could start to think about an electric vehicle and I know that it's been really difficult for a lot of um electric vehicle makers, so sort of

um legacy auto companies. You might have heard the news that Ford's cutting jobs in the UK, that Stellantis, which makes Vauxhall, They're closing a plant in Luton. So there's a lot of push at the moment from the industry to get the government to maybe think about. some kind of financial incentive to get us to buy these cars. Now there's

Absolutely no indication that that will happen, that there will be any kind of scrappage scheme or any kind of VAT cut. Um, because obviously the first female chancellor, as you said, keeps talking about the fact that we have had to fix the foundations of UK economy, of public spending. but it is really sort of worth thinking about before you make any kind of car purchase. And it's also worth thinking about, you know, the charging infrastructure around you. Do you have a charging point at home?

Yeah, so that's kind of when I first originally went to a plug in hybrid before I got this car. Um, yeah, there was lots of incentives out there for charge points at home, which we've moved across um So yeah, that was kind of the thing that sealed the deal, um, for me back in the day. So yeah, charger at home, absolutely fine, but you know

not great infrastructure kind of around the rest of the country. And certainly, you know, if you live in a big city and you don't have a driveway like like I do, it's kind of um, you know, I imagine that would be a lot harder. So I think the infrastructure's certainly gonna speed up over the next couple of years because, you know, we're we're hurtling towards the phase out of new petrol and diesel cars and uh for some people it's it's still not

the solution that they could go for. So, uh yeah, it's something really worth watching. Yeah, and kind of just on on a final point from me um on childcare. So I just wanted to flag that if you have a young child who turned nine months old after the first of September this year. And you

could be eligible for fifteen hours of free childcare from the first of January next year. But, you know, because things are always simple um and it's a little bit clunky, you have to apply for this before the thirty first of December.

So make sure you go, um, if this applies to you, to the gov.uk website and there's a child care and parenting section there. If you log into your child care account to do that, if you have one already or set one up. Um so yeah, I thought that was kind of a a good thing to flag at the end there.

Charlene, thank you so much for joining us on the pod. I know I'm sure we'll have you back. Oh yes, please, I've loved it. Thank you. But that is all from this episode of the AJ Bell Money Matters podcast. for twenty twenty four. We will be back in twenty twenty five with a brand new partnership and a brand new campaign. Hashtag

Don't fear your future. So make sure you keep an eye on our socials. You can find us at AJ Bell Money Matters. And if you are already signed up to our newsletter, you'll get a special edition in the new year. If you've not signed up, where have you been? Pop along to our website at ajblmoneymatters.co.uk and sign up. And you'll also then be notified when the next pod is released. And you can also look back at the old pods. And old articles of

Yeah, and I think I mentioned new years before the Money Matters team, um, including myself. Uh I think I did this one last year actually, will also be recording their financial resolutions and giving you an update on whether they managed to keep to last year's. Um so keep an eye out, like Danny says, on our socials and we'll also have a special episode of the pod digging into those secrets in January. I love digging into people's financial secrets. We're just very nosy, won't we?

Charlene, thanks so much and thank you all for listening. Before you go, please remember this podcast is for educational purposes. And the views expressed don't necessarily reflect those of AJ Bell. The podcast isn't telling you if a certain investment is suitable. Don't forget that the value of investments can change and you can lose money as well as make it. It's also important to remember that how you're taking

depend on your individual circumstances and rules can change. The way an investment behaves in the future. If you want help, go see a qualified financial advisor.