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Welcome to The Monthly Compound — my personal recap of what happened in the world of money and investing from the last month, and most importantly, what I am doing about it.
The 60-second summary
📈 Equities: A turbulent October. Global markets weakened as inflation concerns, higher borrowing costs and doubts about AI valuations unsettled investors.
🇺🇸 US shares: The S&P 500 fell 0.9%, while the technology-heavy Nasdaq dropped 5.3%. The Dow bucked the trend, gaining 1.7%.
🇬🇧 UK shares: The FTSE 100 gained over 1%, outperforming US markets as pharmaceuticals, energy and more traditional sectors provided support.
🌏 Asia: A very difficult month. Japan's Nikkei fell 5.2%, while Hong Kong's Hang Seng declined 5.4%, with technology shares particularly weak.
₿ Bitcoin: October was a difficult month, with Bitcoin falling approximately 7.3% to around $77,400. Wider market volatility, weaker investor confidence and a major Binance security breach weighed on prices.
🏦 Interest rates: The Bank of England held at 3.75%, while the US Federal Reserve maintained its 3.75–4.00% range. Persistent inflation raised expectations of further tightening.
📉 Inflation: UK inflation climbed to 3.5%, while US inflation reached 3.7%. Rising energy costs are making the return to 2% targets increasingly difficult.
🤖 Theme of the month: The AI reality check. Investors began questioning whether enormous AI spending will translate into equally enormous profits. October was a reminder that even the biggest technology companies aren't immune to a market correction.
The UK market: A welcome comeback for British shares
After two consecutive months of losses, the FTSE 100 finally returned to positive territory, gaining around 1.2% in October.
Pharmaceuticals were among the standout performers, with AstraZeneca jumping 7% on the final trading day. The broader pharmaceutical sector gained 5.1% over the month, helping offset weakness in mining and some financial stocks.
The Autumn Budget also proved less disruptive than many investors had feared. Despite additional taxes on banks, markets responded relatively calmly, with the government maintaining its commitment to fiscal rules.
British shares demonstrated that they can perform well even when Wall Street's technology giants are struggling.
This is precisely why I allocate 15% of my ISA to a UK Equity Income fund. While much of my portfolio is exposed to global growth and technology, this allocation provides a different source of returns, with greater exposure to established, dividend-paying businesses.
It's not about expecting British shares to outperform every year. It's about building a portfolio where different parts can perform well at different times. October was a good example of why this strategy matters.
My portfolio
📈 Equities: The foundation of my portfolio. This month, I invested around 12.8% of my available investment capital into low-cost index funds, giving me ownership of thousands of companies across the world. This will always be the case, consistent, repeatable investing in global stocks.
🍷 Fine Wine: My alternative investment allocation. This month, around 85.9% of my investment capital went towards continuing to build my fine wine portfolio. A 5% target allocation.
October was an unusually wine-heavy month for me, with several purchases for my long-term cellar. I continued adding to my GA and Bitcoin holdings, maintaining my wider strategy of building wealth across different asset classes.
₿ Bitcoin: A small, higher-risk allocation. This month I invested around 1.3% of my available investment capital into Bitcoin, while ensuring it remains a controlled percentage of my overall portfolio.
💹 Growth: During October, my total personal portfolio wealth decreased by 2.7% compared with the previous month, falling by £7755. That decrease was despite new money contributions of £3905.64.
Summary of Asset Performance End Oct 26 - The Compounder
Asset | Value | Total Gain |
|---|---|---|
Stocks, Bonds, & Equities. (ISA, SIPP, GA, 212) | £264,569.75 | £100,974.66 |
Fine Wine | £13,855.00 | -£258.00 |
Bitcoin | £2569.59 | £219.40 |
TOTAL | £280,994.34 | £100,936.06 |
Portfolio commenced, Jul 2019.
Chart of the month:
My pick for October's Chart of the Month is Britain's soaring borrowing costs.
On 8 October, the yield on UK 10-year government bonds briefly reached 5.53% — its highest since July 2007. That matters because higher government borrowing costs can feed through into mortgage rates, public spending pressures and the wider economy.
What happened?
Back in 2020, the UK government could borrow over ten years at an average yield of just 0.34%. Fast-forward to October 2026, and yields briefly reached 5.53%, their highest since 2007.
Why should ordinary investors care? Because higher government borrowing costs don't just affect the Treasury. They can push up mortgage rates, increase pressure on public finances and make existing bonds less attractive.
For investors buying new bonds, higher yields can offer opportunities. For homeowners refinancing their mortgages, however, it's a much less welcome development.
It's a reminder that the bond market has consequences far beyond investment portfolios.
Lesson of the month: Don’t panic, keep investing
October was a difficult month for investors, with sharp falls across several major stock markets. It's easy to feel uneasy watching your portfolio lose value, particularly when the financial headlines are full of doom and gloom.
But here's the thing: market corrections are a normal part of long-term investing.
I've experienced plenty of downturns since I started investing, and one lesson has remained consistent: panicking and selling rarely helps. In fact, doing so can turn a temporary paper loss into a permanent one.
When markets fall, my approach doesn't change. I continue investing, stick to my target allocations and take advantage of lower prices where I can. After all, the same £1,000 buys more fund units when prices are down.
Nobody knows whether markets will recover next week, next month or next year. But trying to predict the bottom is a game I'm not interested in playing.
My lesson from October is simple: volatility isn't a reason to abandon a good investment plan. It's one of the reasons you need one in the first place.
Looking ahead to November
After a turbulent October, November could be another interesting month for investors.
The US midterm elections on 3 November could introduce further market volatility, while the Bank of England's interest rate decision on 5 November will be closely watched. With UK inflation rising to 3.5%, the possibility of another rate increase is firmly back on the table.
Inflation remains a key concern. New US figures on 10 November and UK figures on 18 November will help determine whether price pressures are continuing to build.
I'll also be watching whether the recent technology sell-off spreads into the wider market, or whether investors continue rotating into more traditional sectors.
For me, November is about staying disciplined. I'll continue investing, maintaining my allocations and looking for opportunities where prices have fallen. October may have been uncomfortable, but long-term wealth isn't built by reacting to every market wobble.
Stay invested, stay diversified, and let compounding do the heavy lifting.
Happy compounding, and have a great November everyone!
The Compounder
Long-term investing made simple.
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The Compounder is for financial education and commentary only. I am not authorised or regulated by the Financial Conduct Authority and I do not provide financial advice, investment advice, or personal recommendations. Nothing published here should be taken as a recommendation to buy, sell, hold or switch any investment, fund, pension, ISA, crypto asset or financial product. Always do your own research and consider speaking to an FCA-authorised financial adviser if you are unsure.
