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Take stock: A look at what’s going on in the markets

Bitcoin

■ BITCOIN is a new digital currency that was created in 2009 by an unknown person using the alias Satoshi Nakamoto.

■ About 80 per cent of bitcoin is owned by less than 1,000 accounts.

■ Last week bitcoin fell from $9,500 to $6,000, then started to rise.

■ Lloyds Bank led a widely adopted move by many financial groups to ban the purchase of crypto-currencies with a credit card.

Holly says: ‘This stuff is running hot and makes me nervous. I think it’s like gambling, and you may as well go to the casino. It’s far less risky and, yes, probably more boring, to open a stocks and share ISA which you can do these days online from just £1.

Global stock markets

Staying still

What happened? The Bank of England kept interest rates at 0.5 per cent. They use interest rates like caffeine — increase them to kick-start a sluggish economy and reduce them to give everything a kick.

Does it matter to me? It’s good news if you’re on a variable mortgage or if you are borrowing money. For savers, struggling to make decent returns out of cash, it’s not great news.

What happens now? The Bank of England meets monthly to discuss rates. It’s generally thought likely that we’ll see at least one or two rate hikes over the coming year, which is more likely if inflation starts to creep upwards.

Going down

What happened? Markets across the globe fell as jitters grew. In the US, the Dow Jones fell by about eight per cent over the course of a few days. Most stocks including major players, such as Microsoft and Facebook, fell.

Does it matter to me? There is an old saying, ‘When the US sneezes, the rest of the world catches a cold.’ Markets all around the globe had falls. This will impact anyone who holds any shares directly, in an ISA or through a workplace pension.

What happens now? It is nearly impossible to try and predict the markets. Stock markets have been on a bull run for about nine years so these ‘wobbles’ are par for the course. Make sure you have a well balanced portfolio of investments to ride out any storms.

Week of wobbles

THE FTSE 100 had a wobble last week and gave investors the jitters as it fell by about seven per cent. Things have picked up a bit since then. A market correction is normally a fall of up to 10 per cent. Once markets fall by 20 per cent we’re into crash territory. The FTSE 100 has still grown by over 20 per cent over the last two years and these corrections are par for the course, to be factored into any investment decision.

Holly Mackay is founder and CEO of Boring Money, boringmoney.co.uk