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The long game #investments #finance

When we are investing or planning our financial future we have to look at the long game. We might make short-term losses on investments but if we did our research properly in the long-term we should get a good return. We are fallible and so we make mistakes and we can compensate for our mistakes by diversifying. One mistake I am regretting today is Monitise which went from being a fast growing company to a failing company almost overnight. A takeover bid usually means great returns for investors but in the case of Monitise it means I don’t lose all my investment and I have to accept losses.

The long game

Losses

The stock exchange has been described as a casino and so we have to accept losses as well as big returns on our investments. At the moment, I have to accept losses but I did buy Lloyd Banking Group at 30p and sold at close to 90p so while I now play the long game I can remember good short-term successes. Monitise was an AIM company and so it was high risk for a possible high return. My investment was smaller than usual and so the loss isn’t as great as it would have been had it been a FTSE 100 company.

Political risks

I think there will be unpredictable political risks for the foreseeable future. There is not only Brexit to subdue the market but posturing by the Trump led US government unnerves big investors. Talk of war can depress the market but can favour some companies. I tend not to invest in arms companies but we have to become aware of which companies have increased risk and which present lower risk.

The long game

The outlook for the future is uncertain but I think at some stage there will be an increase in interest rates both here and in the US. The oil price is recovering as the supply side is limited and the value of the pound shows signs of recovery too. Banks look like making a good recovery when interest rates rise but there is a negative aspect related to the Brexit talks. Overall, though, I think Lloyds Banking Group is currently a good bet if you look at the long game and forward a couple of years.

Companies that earn money in dollars seem like a good bet now but the rising value of the pound could change that and reduce their revenue. Some FTSE 250 companies are suffering now and so if we think about the long-term, shares in these companies could be a bargain. The AA, Premier Foods and Carillion seem very cheap compared to previous years and so could recover and offer a really good return in about 5 years time.

Finally, I am still waiting for news from Solo Oil again. Given its assets and prospects it appears to be a bargain price but investors fear another dilution via another share issue. The share price does seem to making gains and confidence is coming back this week.

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