Making money: what the experts think

Watch gold…

Investors in the FTSE 100, which has been notching up record highs all week – topping 7,877 on Tuesday – have been enjoying a “double bubble”, said Russell Lynch in the London Evening Standard. Higher oil prices (Brent crude is now at $80/barrel) and a falling pound are always a fillip for an energy-intensive index whose constituents make most of their earnings in dollars. The lengthy bull run in stock markets, dating back to 2009, has been dubbed “the most unloved, mistrusted rally in history” – and, according to analysts at BNY Mellon, there are “warning signs for cautious investors” that it may be ending. As they point out, when the oil price rises, gold usually follows “broadly in lockstep”. But gold has been dipping of late. A similar pattern was evident in the summer of 2008 when gold fell by nearly a quarter in the two months before Lehman Brothers collapsed. “Time to tread cautiously.”

…and sterling

Although the Footsie has jumped by about 14% since its March lows, it is only up by about 2% in 2018 as a whole, said Michael Hunter in the FT. The pound’s current weakness has helped fuel the rally by boosting the value of corporate profits. An additional advantage, said Russ Mould at AJ Bell, is that it makes “British assets cheaper for overseas buyers”. Sky, Smurfit Kappa and Shire are already subject to approaches from abroad. If sterling “keeps sliding”, expect “fresh bids to emerge”.

Bagging profits

Malaysian police have seized 284 boxes of luxury handbags believed to belong to Rosmah Mansor, wife of the country’s ousted PM Najib Razak, “who is known for her predilection” for the Hermès Birkin brand, says Quartz. There’s a good reason for collecting them. New Birkin bags start at about $9,000 (£6,700), but “can fetch astronomical prices on the secondary markets”. The most expensive yet sold went for over $383,000 (about £285,000) at auction last year. Indeed, majoring on Birkins could be “a savvy investment decision”. According to Baghunter, a marketplace for luxury purses, Hermes’ luxury bags have outperformed both gold and the S&P stock index since their introduction in 1981. Over 37 years, the Birkin has notched up annualised returns of 14.3% – knocking gold (2.1%) and US stocks (8.7%) into a cocked hat.