Welcome to Episode 18 of The Art of Investing - brought to you by IG, the global investment platform.

Rich McDonald, Mark “Spice” Holden, and Chris Fellingham take a trip through financial history to explore one of the most important questions facing the UK government right now: what happens when a budget goes wrong?

With just weeks until Rachel Reeves delivers her first budget, the team looks back at past fiscal failures - from the 1976 IMF bailout to the Liz Truss “mini-budget” meltdown - and discusses what lessons markets (and investors) can learn from both.

This Week’s Highlights

💥 Crypto Correction: Bitcoin slides into a bear market, down 20% from its highs. The team unpack what a dip, correction, and bear market really mean - and why investors still “buy the dip.”
📉 AI Fatigue: Meta’s 17% post-earnings drop sparks debate over whether tech valuations are finally stretched.
🏦 Rate Cut Watch: The Bank of England holds at 4% in a tight 5-4 vote - but hints of a cut in December.
📊 Bonds & Bubbles: Deutsche Bank hedges AI exposure as echoes of 2008 resurface.
💷 Budget Breakdown: Why the upcoming UK budget could define the next decade - and the two moments in history that show what happens when fiscal policy goes off the rails.

Portfolio Snapshot

Weekly performance: -1.2%
Total return since inception: +9.4%

Top performers:

🥇 Gold - +1%
🇬🇧 FTSE 100 - +0.1% (helped by weaker sterling)
💰 Cash position - held steady

Underperformers:

🪙 VanEck Crypto & Blockchain ETF - -4% (crypto slide)
⚙️ Copper ETF - -4%
⛏️ World Mining Trust - -3.5%

Action taken:

DAX position (5%) sold, moving funds into cash to reduce overall equity exposure.
Total cash & equivalents: 17.5%, providing flexibility for future corrections.

What You’ll Learn:

Market Jargon Explained: What defines a dip, correction, or crash - and why investors need to know the difference.
Is AI the New Bubble? The team debate whether recent gains signal irrational exuberance or just strong fundamentals.
Lessons from History:
1976 IMF bailout - when UK debt and inflation forced an emergency rescue.
2022 Truss mini-budget - how ignoring the bond market triggered chaos.
Why the Gilt Market Matters: How confidence (or lack of it) in government borrowing drives rates, markets, and mortgage costs.

📈 Download the full Portfolio Performance Slides

View the portfolio breakdown: here

📧 Get in touch: theartofinvesting@ig.com

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Disclaimer

This podcast is provided for educational and informational purposes only. The content presented is not intended as personal investment advice or a recommendation to buy, sell, or hold any particular securities or investments. All discussions regarding the model portfolio are illustrative and for educational purposes.

Your capital is at risk. The value of shares, ETFs and ETCs can fall as well as rise, which could mean getting back less than you originally put in.

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Britain's Budget Blunders & Bitcoin Enters A Bear Market

The Art of Investing