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Investments: Easter

It’s Good Friday and so the stock market is closed for 4 days. It’s sunny where I am so it could be a nice weekend. Will traders and investors forget the market through the long weekend? I doubt it.

Troubles in Ukraine seem to be more settled after an agreement was reached. I have noticed that traders returning after a break tend to buy and are more positive; so Easter could mean the stock market will see some buying next week.

I see everything as a learning opportunity. I doubt if I’ll be buying or selling next week, but will watch the market with interest. My next opportunity to buy could be a IPO by the Saga group. I have my car and home insurance with them, so it would be nice to take a little of the profit back. I doubt if investors will make an immediate profit as they did with Royal Mail, but the company is quite diverse in the products and services it offers. The over 50 customer base is one that has increasing wealth too. People are living longer too so the market is getting bigger and Saga can expand into other markets.

I’ve seen shares in Premier Foods drop again this week and so it seems quite a lot of shares have been dumped on the market following the rights issue. I think that’s probably over now. Last year the price was around 58p and it dropped to an all time low this week of around 58p. The company has far more shares issued now, but much less debt. The price went to 186p through the summer last year then crashed in October when the results were announced. It’s very different now, but I expect the price to double through the summer. There will be a statement soon. Will that send the price up? I can’t see it going any lower. The directors have substantial holdings now, so they want the price to go up too. The average price I bought at is about 46p so I’ll make a return whatever happens I think. If they go to 200p by the end of the year, I wouldn’t be surprised.

Dealing fees still eat into returns for small investors. The spread and stamp duty means a loss in the short term and when dealing fees are added it’s not worth buying smaller amounts of shares. You get nailed with another fee when you sell too. There needs to be more competition and a service for small investors. It basically means that small investors have to be more skilled at selecting investments and have to take more of a risk. It’s difficult to maintain a diverse portfolio too, although diversity does tend to lead to lower returns.

Investors invest for the future, not just our future but everyone’s future. Investors provide the money to build new offices, factories, schools, hospitals and roads. They expect a return on their investment in line with the risks that they take. We need investment to be encouraged and made available to everyone; not just the rich. It provides economic growth and financial  security for the investor.

Please comment and share your views in the comments box. You can also follow me on Twitter.

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  1. Pingback: The Review: Easter | Mike10613's Blog

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