Important Notice

This episode of the Purposeful Wealth Podcast is for educational purposes only and is not financial advice or a recommendation to invest in Bitcoin or any cryptocurrency.

Bitcoin and cryptoassets are high-risk, volatile and not suitable for most retail investors.

Bitcoin and cryptoassets are not protected by the Financial Services Compensation Scheme (FSCS) or the Financial Ombudsman Service (FOS).

Wells Gibson has chosen not to include Bitcoin and crypto as an asset class within its range of portfolio.

Wells Gibson Limited is authorised and regulated by the Financial Conduct Authority.

In this episode of the Purposeful Wealth Podcast, host Jonathan Gibson is joined by Daniel Parkinson, often known as The Bitcoin IFA, for a thoughtful, non-promotional discussion on Bitcoin.

Rather than encouraging listeners to invest, the conversation focuses on why Bitcoin exists, what problem it was designed to solve, and what investors and financial planners should understand, even if they ultimately decide Bitcoin has no place in their financial plans.

Dan shares how his experience living through hyperinflation in Lebanon reshaped his understanding of money and led him down the “Bitcoin rabbit hole.” From there, the episode explores Bitcoin’s role as money, a payment system, and a store of value — and why it is fundamentally different from other crypto assets.

Key themes include:

• The difference between money and currency
• Bitcoin as digital gold versus other cryptocurrencies
• Inflation, currency debasement, and government borrowing
• Volatility, risk, and long-term time horizons
• Custody choices: ETFs vs self-sovereign cold storage
• Who Bitcoin may — and may not — be suitable for
• Why education matters more than hype or fear of missing out

The episode closes with a balanced reflection: ignoring Bitcoin because it feels unfamiliar isn’t good planning, but neither is embracing it without understanding the risks. The goal is clarity, not conviction.

This episode isn’t about predicting prices or promoting Bitcoin. It’s about understanding — understanding money, risk, scarcity, and how Bitcoin fits (or doesn’t fit) into a broader financial plan.

Whether you’re skeptical, curious, or somewhere in between, this conversation encourages listeners to slow down, get educated, and make deliberate decisions — not emotional ones.

As always, investment decisions should be made in the context of your wider financial plan and personal circumstances.

If you would like to discuss your own position, please seek regulated financial advice.

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Justin King, a Registered Life Planner® and coach, is one of the UK’s most qualified independent financial advisers. Motivated by helping people find fulfilment, he supports others to take control of their lives and thrive in retirement. Justin King is the author of 'The Retirement Café Handbook: 9 Accelerators for a Successful Retirement' and host of his retirement planning YouTube channel plus The Retirement Café Podcast.

Join Jonathan, in discussion with Justin about making your retirement a fulfilling and purposeful one.

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In this episode of the Purposeful Wealth podcast, Jonathan Gibson, Managing Director of Wells Gibson, delves into the relevance of emerging markets in today’s investment landscape. He discusses the concept of the emerging market pendulum, highlighting the importance of maintaining a diversified portfolio that includes these markets despite their recent underperformance compared to developed markets. Jonathan explains the potential long-term benefits of investing in emerging markets, including higher expected returns and exposure to rapidly growing economies. Tune in to understand why staying invested and diversified is crucial for achieving financial peace of mind.

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In this episode, Jonathan Gibson, managing director of Wells Gibson, delves into the intriguing world of cryptocurrency. With Bitcoin back in the spotlight, Jonathan discusses the excitement surrounding technological innovations in the crypto space while emphasising the importance of a purposeful investment strategy. He argues that for most investors, altering portfolios to gain exposure to this volatile market may not be necessary. Tune in as he provides insights on the role of Bitcoin, the risks involved, and why complexity shouldn't dictate your investment choices.

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In this episode, we delve into the intriguing world of investing, focusing on the allure and potential pitfalls of chasing the latest trends, particularly in artificial intelligence. Join Jonathan Gibson as he breaks down the difference between growth and value shares, exploring the hidden costs of overvaluing innovation. Discover how a disciplined, evidence-based approach to investing can help you secure everything you value while navigating the complexities of the market.

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In this episode of the Purposeful Wealth Podcast, Jonathan Gibson, managing director of Wells Gibson, addresses the recent fluctuations in the US dollar. He offers insights into why these changes shouldn't cause alarm for investors. With a historical perspective, he explains that currency movements are common and often unpredictable, influenced by a myriad of factors including interest rates and geopolitical events. Jonathan emphasises the importance of sticking to a well-diversified investment plan rather than reacting to market noise. Tune in to gain clarity and confidence in your investment strategy!

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As systematic investors, we seek to continually challenge the process in order to maintain a solution which we feel gives us the best ability to meet our lifestyle and financial goals. We understand that trying to predict the time and direction of market movements over shorter time periods is a fool’s pursuit. Any change in portfolio structure or investment approach, therefore, must be guided by a change in the evidence or our investment goals.

The interest rates set by central banks have been rising around much of the world in recent times. One will have done well to avoid such headlines in the news.
In the UK, the base rate set by the Bank of England was just 0.1% three years ago and now sits at 5.25%, at time of writing.
This considerable increase, much of which happened in 2022, led to historically low returns on bonds, as bonds fell in price in order to align with rising market yields.
Despite rates not having been at such levels for some time, it is not uncharted territory.
In fact, since 1975 rates have been above current levels more than half of the time.
For investors with medium to longer term liabilities, i.e. 5 to 10 years and beyond), these rate rises, and corresponding price falls, have significant benefits.

Given the structure of portfolios, the - now higher yielding – bonds should get through the price falls experienced and thereafter be enjoying a higher return. It also opens up other options for savers – annuity rates and fixed term instruments now become more viable, in some circumstances. However, when it comes to the expected returns on portfolios, the evidence remains the same. We can look at historical figures to give an insight into whether there is a relationship between current rates on cash and subsequent portfolio returns.

Historical data reveals at a given level of starting interest rate, the proportion of times in the subsequent year, that the investment portfolio outperformed this starting cash rate. In essence, this is seeking to answer the question: ‘if I lock up my cash today for the next twelve months I am guaranteed x%, so why take on the additional risk of investing in a portfolio?’.

Well, our research reveals that between January 1970 and June 2023, the proportion of periods that a 60% equity portfolio outperformed cash in the subsequent year were higher than 50%. There is no clear relationship between the level of cash rates and subsequent outcome of portfolio returns relative to cash. Over all 1-year periods in our sample, the 60% equity portfolio outperformed locked up cash in 2/3rds of observations. The average excess return of the portfolio over cash in the 1-year periods was 4%. As we extend the holding period of our portfolio to 5- and 10-years the proportion of outperforming periods rises to over 80%. Other practical implications are worth considering.

Locking up cash reduces liquidity, and may only be withdrawable outside of the agreed period with a significant penalty.

Also, savers with larger sums of cash need to be wise and spread cash across banking groups to remain under FSCS protection limits. Bank failures in the US this year offer a cautious reminder to savers not to naively ignore protection limits.
In closing, risk and return remain inextricably linked. The baseline has increased for all asset classes so please stick with the program.

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Readers of the Sunday papers’ financial pages will be familiar with the dividend chasing stories that pundits and some fund managers love to peddle.
These generally focus on high dividend paying shares or ‘income’ funds that focus on these shares.
The thought that one can take an income from a portfolio without the need to sell shares can feel appealing to some. But dig a little deeper and it quickly becomes evident that a portfolio constructed from a bottom up dividend-driven approach is unlikely to be the most optimal approach and contain risks that may not be fully appreciated.

The first point to note is that you cannot have your cake and eat it!
If a company pays out a high dividend, that money cannot be reinvested by the firm to deliver higher future earnings which in turn drives share prices - in other words, the present value of future cashflows of a company.
So, with higher dividends today, you forgo tomorrow’s price growth.
In theory, the dividend policy of a firm should make little difference to its total return (by total return we mean, dividends plus share price appreciation) .

The second point to note is that different sectors of the economy tend to have different average dividend payout strategies.
For example, tech companies tend to reinvest most of their cash flows into product development and attaining greater market share, whilst energy companies – operating in a more mature industry - may not be able to find projects in excess of their cost of capital and may return money to shareholders via dividends.
Chasing dividends tends to end up in large sector ‘bets’ away from the market.

The third point to note is that because each equity market reflects the companies listed on it, large sector differences do exist between markets.
For example, the UK has materially less exposure to technology companies compared to the US but higher weightings to energy companies.
As a consequence, the UK market has a higher dividend yield than the US market.
A dividend-driven approach will likely overweight the UK (and other higher yielding markets) relative to other lower-yielding markets.
If we look at the average dividend yield of the 10 largest global markets by size between 2015 and 2023, we can see that Switzerland leads the way, followed by Australia and then the UK.

The final points worth noting are: within each market, dividend payments are often concentrated in just a few shares resulting in share concentration risks; and higher dividends tend to describe value companies which are less healthy companies with higher expected returns, potentially inadvertently skewing a portfolio towards higher expected risks.
If you have bonds in your portfolio, chasing higher yields from lower quality bonds or lower quality borrowers), this simply adds equity-like risk to your portfolio.
The higher the yield, the riskier the borrower. But that story is for another day!
An eminently sensible alternative approach to taking income from a portfolio is to think on a ‘total return’ basis where an investor is agnostic to taking dividends or selling shares to deliver the capital required.
This is the way that pension plans and endowments tend to draw income.
It allows you as an investor to maintain the structural integrity of their portfolio and to avoid company, sector and market bets in the pursuit of higher dividend yields on portfolios.
My advice is, don’t cha

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