Finance Friday: related investments
If you’re considering investing in a particular sector or company, it might be worth looking at related sectors or companies. For example, if you think an oil company is a good investment, look at who is supplying them and what they use to drill for oil. I thought graphene might be a good investment for that reason.
Graphene Nanochem went up this week on news that it had won a good order for it’s Platdrill product. Panmore Gordon reiterated its buy rating with a target of 150, so it could be a good investment. However, some investors seem to be selling and taking profits today so the price has dropped 3.94% at the time of writing. That could be an opportunity to buy.
The FTSE 100 and the all share index are down this morning too and so market sentiment is to sell this morning. This month started so well for me, but I’m over 2% down this morning, mainly on riskier holdings.
I’ve been a fan of Premier Foods as one Britain’s biggest food companies and I think the shares are a bargain now. Their financial statement is due in a couple of weeks and we will see then if the advertising and social media campaign has boosted sales. Many of their products like Mr Kipling are still heavily discounted in supermarkets. Supermarkets aren’t doing so well either, incomes are stagnant and personal debt is high. People are going to the discounters and so supermarkets have to reconsider their champagne and strawberries culture and become more competitive.
The new ISA (Individual Savings Account) has been dubbed the NISA and allows us to invest up to £15,000 in a cash ISA or a stocks and shares ISA or a bit of both. I had an email from National Savings and Investments with the usual bull shit about it being guaranteed by the government. I checked it out, the interest rate was 1.5%; but it is tax free! If you decide on a NISA from another provider like a bank paying a little more, your investment is guaranteed by the government up to £85,000. I checked out the ISA’s from Halifax, their online ISA also pays 1.5%, but that’s including a bonus of 1.25%! That’s positively insulting. To get the same rate at Barclay’s you have to deposit over £30,000!
I can buy and sell shares next Tuesday with the Halifax for 3.95 a trade; instead of the usual £12.50 which I think is daylight robbery. The offer is only for 2 hours, but I might make a trade. I’ve owned RBS for two and half years and the return is just over 5% a year. I am getting a return of over 10% on other shares, so I might sell RBS on Tuesday. I think TSB is a better bet now and they seem to be looking at online banking and more personal service. Some banks only think about rich clients, maybe it’s time they looked at the millions of poorer people!
I’ll be bold and make a forecast. I think the stock market will do well for the rest of this month and maybe for the whole quarter. Many people will be investing and using the whole of their £15,000 NISA allowance. People are also withdrawing money from their pension pots and putting it into NISA’s to get a better return. From next April, the rules will change again; just in time for the election in June. Who knew? If you want details of the pension rule changes there is a government explanation.
I think a lot of people will be investing in new stock and shares ISA’s. You also have a generous capital gains allowance for investments outside the ISA. The government also increased personal allowances, so many people will now be able to avoid a lot more tax.
What do you think? Fancy a cash ISA at 1.5%? Me neither… Please share your thought in the comments box or you can follow me on Twitter.