Thought I would do an update on this, previous ramblings
HERE. At the end of 2021 and beginning of 2022 we set ourselves an investment plan
HERE in order to finance a private nature reserve/homestead in the UK and develop other areas of our natural capital interests.
Within a month of that plan Russia invaded Ukraine and there has been an energy crisis, a cost of living crisis, rapid inflation and large interest rate rises. In addition to the global crisis we have also had personal crisis with bereavement and large death tax bills to settle plus other increased tax liabilities and looming high interest rate payments. As in all chaotic situations that has provided both lost opportunities and new opportunities.
Following the plan
HERE here is an update on some of those investment objectives:
1) Investment in Beddington Farmlands hinterland buy to let market
The two rental properties there are going well and yielding about 4% which is now lower than we can get in a bank savings account since the interest rate rises. Once the fixed term expires on the buy to let mortgage in 4 years time, if the interest rate has not gone down, this will be a disaster. Therefore the objective is to pay off that mortgage as soon as possible. What with property prices on the slide and interest rates on the rise, this is not a good time at all to make further investments in this space and in fact its a good time to exit any exposure to the new interest rates.
2) Investment in Green Finance (Funds and Stocks and shares in the green transition)
I have done a bit of research in this field and made some good returns on investments in TESLA but overall this is a very unsafe space and I have seen losses in Carbon capture ventures (such as Aker), green transition funds (Jupiter Green) and even the UK's first natural capital PLC company (Foresight) is also showing a loss in share price since the heady heights of the hysteria surrounding COP26 and the company's IPO. Also one of the largest decarbonisation ETFs that I tried (HANetICAV) has also failed to get momentum. I'm about 15% down overall and friends of mine that have pensions in this space have made significant losses. We have inadvertently been subsidising the green transition which is probably a better way of spending money than giving to an Environmental Charity but that wasn't the goal :-) I suppose it can all go down as carbon footprint offsets.
Since then I've been watch-listing as many eco-start ups, green transition ETFs and green transition companies as possible and from what I can work out the whole area of Green Finance has really been hit hard by the Global Economic Crisis with a real cooling off as attention has turned to food security, energy prices, global security, global financial security and risk aversion to new green start up financing. So for instance various investment tips from CarbonCredits.Com have proved to be bad advice with Carbon Steaming Corporation, Devvstream Holdings (carbon credit block chains), Brookfield Renewables (a well established decarbonisation engineering company) , Ishares Global Clean Energy ETF (100 clean energy companies fund), Nasdaq Clean Edge Green Energy ETF, VanEck Low Carbon Energy ETF and their Green Bond ETF all not performing very well and many making losses (large losses in some cases).
The main Green Finance initiatives that are making money seem to be the ones that follow large index funds like the IShares MSCI ACWI Low Carbon ETF, the SPDR MSCI ACWI Climate Paris Agreement Aligned ETF and the SPDR S&P 500 Fossil Fuel ETF but that is basically because they more or less track the corresponding index funds that have been rallying for most of this year (but started to dip in the last few days). Also large blend funds like the Blackrock Carbon Transition ETF are doing okay and also the Kraneshares Californian Carbon Allowance ETF has been on the up as it tracks the carbon price in the Californian mandatory carbon market (whereas the Kraneshares ETF that gives exposure to the mandatory European Carbon market price hasn't performed as well and global carbon price market exposures by Kraneshare have been very poor).
So I really don't know where to go with this and the main area for profit seems to be in the ETFs that simply follow the main indices which have probably peaked for now anyway. I've set up a Charles Schwab trading account to access (mainly dollar) investments not available on Hargreaves Lansdown but I think will wait to see if this recession, that everyone is waiting for, appears before going back in. It all seems either at peak or unpredictable so I'll adopt a patient, sit and wait approach and look out for a strong pattern to move on.
3) Purchasing of Land/ Natural Capital
No further gains made in this area but have made progress with the development of one acre of Natura 2000 habitat that we have purchased in Bulgaria and intend to expand in the future.
4) Growth in Core business activity of Green Space Management
This has certainly been maintained with good figures for 2022/2023 in recent accounting results.
5) Monetisation of Projects
No progress made here, in fact been withdrawal from the Azores Project to loss in volunteers.
6) Investment in cryptocurrencies and block chain
Despite all the hype and predictions of a new crypto bull run nothing much happening with any of this from what I can see. My small stake in Bitcoin, Solana, Ethereum and Litecoin has been bouncing on the bottom after the slight bounce back in late 2022/23 after the November 2022 crash (and FTX collapse).
7) Continue investment in current land and property assets
We started a big project at the beginning of this year to build another apartment on top of an existing one in Malta- things are moving slowly but forward with that.
Of course the big development here is the selling of the Old Vicarage which following death tax, inheritance distribution and costs will place money into the homestead/private nature reserve fund. However with sliding property prices and the tight time scales involved we will probably invest that money and take advantage of the high interest rate opportunities and sit things out a bit while waiting to find the best site and hope to capitalise on the rising interest rates and falling property prices. Fingers crossed!
So all in all, lots of reshuffling and refocusing of objectives in order to track the moving target but all going pretty good, we were aiming for about £2 million by 2026 to support the private nature reserve/homestead and that is not looking over ambitious. However the scale of the project might be scaled down as the last couple of years have shown that its not a good idea to have too many eggs in one basket so might look for a smaller site (one to three acres) and finance that from income across a small constellation of investments and focus on the Bulgaria project to meet the larger scale objectives (where land is cheaper). As always anything can happen so will see what happens next. As usual seems like the best investments are investing in your own businesses, property and projects with passive income from outsourced investment (ETFs, stocks and shares and savings etc) always seem to be more effort than their worth (in my limited layman experience). I think maybe some of the appeal of mainstream passive income investments is the hyped promises of fast easy money, the delusion of safety in numbers (billionaires eat small investors by their millions in each mouth full), coupled with the psychological effect of sunken loss both in intellectual and capital investment plus the emotional bonding to some of these investment narratives. According to some sources only ten percent of investors make money from the stock market which also sets a psychological challenge to win which all adds up to quite an addictive and dangerous cocktail. Safer to invest in your own private assets and businesses I would definitely say but not as fun as playing the big (the biggest) game.
