Posted on 21 June 2019 by Douglas Chadwick“Politicians are like diapers, they need changing frequently, and for the same reason”. (Although often attributed to Mark Twain, he probably didn't say it but would have agreed!) This week the media has been full of Conservative candidates being questioned on their ability to lead the country through a successful Brexit, and also on their suitability to be the United Kingdom’s next Prime Minister. Inevitably they use the word “realistic” to describe their own approach to our problems. Now in my experience, when someone says that they are going to make a realistic decision, you immediately understand that they are likely to make a bad one! “Where is my lucky scalpel” are not the last words you want to hear as you fade into unconsciousness before a major operation. In a similar fashion, hearing from Bankers that the financial crisis is over, or from Politicians that a no-deal Brexit will be easily managed, is just as disturbing. In the first case the surgeon was not serious, and he found it amusing. Unfortunately, in the second case the Bankers and Politicians are serious and are set to risk the country's financial well-being and our livelihoods yet again. I liken their policies to army snipers - they are well camouflaged and difficult to see! I do not intend to dwell on the Neil Woodford and Hargreaves Lansdown drama that is playing out at the moment. This is well covered by the media and was an accident waiting to happen. To a Saltydog subscriber, who is presented on a weekly basis with actual fund and sector performance numbers, this fall from grace is not unexpected. The Hargreaves Lansdown and Woodford funds have not performed and simply do not appear in our numbers. Surely this is another nail in the coffin for a blind “buy and hold” philosophy and “three cheers” for an active informed momentum approach to your portfolio. I will say that the directors of Hargreaves Lansdown must be incredibly lucky people, because without any apparent pre-knowledge they were able to realize some of their holdings a few weeks before this implosion took place. Shame that the public who were invested in these funds did not get the opportunity to use the same crystal ball! A few weeks ago I wrote about the practice of grandparents and parents gifting money into their offspring's ISAs. This is a good way to reduce Inheritance Tax for the giver and builds a tax-free pot of money for the recipient. One of our subscribers then emailed me to ask why had I not mentioned gifting the money into a SIPP, as the government will then add 25% to the donation. The answer, I am afraid, was that it had not occurred to me. He makes a very good point. You are allowed to donate £2,880 per annum which the government then turns into £3,660. Assuming that you could achieve a return of 8% on the money over a continuous investment period of twelve years the final amount for the ISA is £59,000 and for the SIPP it is £73,783. A significant difference. Of course the SIPP has to be held until the owner is 55 years old (shortly to become 57 years). ISAs can be accessed immediately, although Junior ISAs can’t be touched until the child becomes an adult (at 18). At the same time I touched on the subject of producing numbers on a quarterly basis which would be relevant to the person who only wanted to review their portfolio`s performance on a less regular basis. This makes it a sort of cross between “buy and hold” and a Saltydog active investing approach. We wanted to know which funds, if any, produced a 5% gain every six months during the last three years. The results are shown again in the table below (if the text is too small, you might be better off downloading the table here). Amazingly six funds did manage to do exactly that, and thirty-eight more achieved it five times. It demonstrates clearly the performing sectors and managers. We believe this is very useful, and Richard is continuing to refine the algorithm. In the future it will become a regular feature in our newsletter.