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Keeping your nerve #finance #investments

There are times when you have trouble keeping your nerve when investing in the stock market. It can be volatile and the dealers and market makers all play their games. The companies are self-serving and often have little regard for small private investors. After last weeks disaster when Carillion went into liquidation I was hoping for some good news and this week didn’t go so well either.

keeping your nerve

Immupharma

The bad news this week was a placing by Immupharma at 144p, which crashed the share price. I think it is unfair on private investors for the company to offer institutional investors shares at a discount to the market price. The institutional investors always tend to drip them back into the market as soon as the price recovers and that tends to hold the price down. Immupharma gained the confidence of the market and then in one fell swoop trashed that confidence.

Keeping your nerve

It is difficult keeping your nerve when you don’t really know what is going on too. This morning all the data from the stock market seems missing or wrong. It all comes from Digital Look so if they have technical problems all the boards can be wrong. I think all my investment in AIM companies look promising but with unfair placings and market makers playing games trying to trigger stop losses, the odds are stacked against small private investors. I would like to stay invested in small AIM company and see it through to the next level when it is no longer a risky AIM company. Immupharma has the potential to become a multi-billion pound company but many investors just sell when the price goes high and then buy when it gets trashed. I think that might be a better strategy instead of supporting the company through thick and thin. Solo Oil has done a placing and trashed it’s share price as well. Verona Pharma was doing well before its placing on the NASDAQ market. Emotions do affect investment decisions and we do need to be more clinical about investing. We don’t actually make money until we sell.

Pharma

Pharma seems to be a good sector for small investors and Immupharma have proved that. I still have high hopes of Verona Pharma improving too. I have added Optibiotix Health to my watch list and it is a company with reasonable prospects. They did an issue in December so I wouldn’t expect another placing for some time.

Solo Oil

Solo Oil has annoyed investors with placings in the past and has said they will offer to private investors with a rights issue at some time in the future. They could hit the jackpot but will they trash the share price with a placing to institutional investors again? If the price goes up to over 20p as predicted I’ll be very tempted to sell.

Worse case scenario

It is easier to cope with volatility if you are diversified and not just in the stock market but other investments too. I quite like how Zopa has worked for me, giving me a decent return without too many worries. Keeping your nerve is also about knowing that the worse case scenario is survivable. If the stock market crashed again, I could lose 50% of the value of my portfolio. I would survive without too many problems. If I do well, I shall expand my interest into art, if I don’t do so well it is an extravagance that I can do without.

Overall I have a good return from investing but I have a 5% loss now on my current holdings. That can change very quickly. There are a lot of encouraging signs and I’m waiting for news from most of the companies. I need to balance my portfolio more and be a little more analytical in making investment decisions.

Remember, these are only investment ideas. I don’t offer advice so always do your own research and make your own decisions. If you would like to follow my blog and read more ideas just enter your email address at the top of the sidebar or follow me on Twitter for links.  There are also links on my Facebook page.

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