HOGMANAY AGAIN… (with subtitles for the non-Scots)
It is little wonder that I much preferred Christmas to New Year as a child. Christmas Day was one of wonder - toys and presents delivered by a strange man in a red suit gratefully received. New Year? Well when I was a nipper it was regarded as bad luck to bring in the New Year with a speck of dirt in the house. My early memories of Hogmanay therefore involve carrying a duster while helping my mother clean the house from head to toe, washing the ornaments, hoovering (even under the settee!) and putting out the ashes. The latter was particularly difficult as we had electric heating!
Once this was done she made a huge pot of soup, stovies* and a steak pie, in readiness for the "first footers*" who would descend after midnight. It had to be a tall dark man that was the "first foot*" or the whole year would be smitten with bad luck. It was a good job we had a neighbour that fitted the bill or god knows when people would have got in! The revelry went on for some time with the stragglers often leaving around about six in the morning.
It was not only my family that did this; my guess is that forty years ago this scenario was unfolding in virtually all of the homes in Scotland. No wonder the 2nd of January is a public holiday up here - it took that long to recover.
This, however, like a lot of traditions is dying out. Nowadays fireworks are more likely to greet the start of the year with the majority of people tucked up in bed waiting for the start of the January sales, and if a tall dark stranger carrying a lump of coal and some black bun* chaps* your door at two in the morning you would probably call the police. However, as Robert Burns so eloquently said, it is a time to look back and reflect on the year just ending.
Twelve months ago the FTSE100 index was sitting above 6700; roughly 4% higher than it is today. The mid and small cap indices have also fallen but by a bit more. The French and German markets are at similar levels to the start of 2014 however, in the US the S&P500 index is up over 20% over the same period. 2014 was definitely the year of the US, and 2015 may well be too. So 2014 was not a great year for investors in tracker funds or those with no US exposure. Many active managers significantly outperformed in the UK this year with the average UK Income fund having risen by 3%. (Source: Lipper 31/12/2014)
In last December's Informing You I suggested that funds that had struggled in 2013 may well be good performers in 2014 and this indeed was the case. The Trojan Fund, which I specifically referred to, suffered its first ever losing year in 2013 but more than recovered these losses in 2014 ending the year up over 8%. (Source: Lipper 31/12/2014) Conversely the top performing funds in 2013, particularly in the UK, had mediocre years which demonstrates why a private investor should never chase performance, but unfortunately all too many do.
Motorists received an unexpected boost with the fall in the price of petrol. In the UK filling up a tank costs nearly 15% less than it did at the start of the year and this is likely to fall further in the next few months. Unless you own shares in an oil company do not let anyone try and convince you that the fall in the oil price is bad, although those living and working in Aberdeen may disagree.
The oil price windfall was probably one of the contributing factors to the record amount of consumer spending in the last quarter, which will have come as a huge surprise to those that only listen to Robert Peston (a tall dark stranger I wouldn't want chapping* my door at any time of year) but not for the rest of us. We are also starting to see real wage growth for the first time in many years so certainly in the UK even the most pessimistic would agree that things are looking better than they have for a while.
In next month's Informing You I will look forward to 2015, but as we approach the waning hours of 2014 all that is left is to wish you all a very happy, healthy and successful 2015 and to thank you for your kind comments over the last twelve months. Now where's my duster…..
*Stovies - dish of potatoes, onions and meat
*First Foot - person that first crosses the threshold after midnight at New Year
*Black Bun - a type of fruit cake covered in pastry (who says we don't have a healthy diet)
*Chaps - knocks