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Keeping your nerve #finance #investments

Sometimes investing is about keeping your nerve as markets go down or become more volatile. We saw the first signs of protectionism by the US after President Trump announced import tariffs on steel and aluminium. I think he set the tariffs too high but considering that the Chinese manipulate their currency to boost exports I can see why he did it. He isn’t smart, though. The smart thing to do would have been to raise the standards on steel and aluminium to restrict the importation of cheap substandard steel. He could apply that principle across a range of imported goods and so limit imports and give people better quality products. Politicians are never very smart.

keeping your nerve

Falling markets

I’m not happy with falling markets but I’m keeping my nerve and trying not to make mistakes. Diversification and doing research has saved me from losing money. This week, we saw Maplin and Toys-R-Us go into liquidation. Carpetright announced a loss too. This is just the tip of the iceberg, lots of companies have huge debts and pension deficits. I’ve invested in well-known names such as ITV and Debenhams only to see poor management and high rewards for management.  I was relieved to see the AA has cut its dividend and is taking a sensible approach to solving its problems. I wish ITV and Debenhams would do the same.

Keeping your nerve

Keeping your nerve when markets are falling is easier if you have a little good news. My research into Immupharma paid off when the share price soared and I was very hopeful that Verona Pharma would do the same. Despite Verona making gains on Wall Street last week, I didn’t see substantial gains in the London market but it is starting to make some gains today. This morning’s gains by Verona Pharma are more than offsetting losses elsewhere.

The end of the financial year

We are coming to the end of the financial year and the economy looks shaky and markets look depressed. My stock market portfolio isn’t as healthy as I had hoped for but overall my finances are looking fairly good and I was able to change my car this year and still stay debt-free. I might have to wait for a while before I can buy a new camera but I won’t need it until next year and if the pound appreciates the price will probably come down. There have been disappointments. Solo Oil did another placing. This time private investors could take advantage of the placing but few did and most are angry at the way the placing was done. The money raised will be used to increase Solo’s stake in Horse Hill. If the so-called Gatwick Gusher produces oil that could be a good move but private investors take the view that AIM companies often raise money just to pay the inflated salaries of the board. Solo could still come good so I will wait and see. Tesco made some gains this week which gives me one company with a decent return. I expect the Booker merger to go through next week which could boost the price a little more. I think the strategy at Tesco might be to open some cheap to operate stores in the same way as Aldi and Lidl to compete in certain locations where they don’t need luxury goods on the shelves and can offer a limited choice. I think they might close down some of their loss-making superstores too.

That’s it for this week. I’m reasonably confident about the future. The political right is very active but I think the present government in the UK is relatively liberal despite what the papers say. Trump isn’t the smartest president they have had over the other side of the Atlantic but some of his ideas might just work. The global economy could recover or it could be in for a shock when Bitcoin investments make some funds huge losses. I just hope Bitcoin doesn’t cause another credit crunch like Lehman’s did.

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