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Peaks and troughs #investing

Peaks and troughs

Day traders in the City of London watch for the peaks and troughs in share prices, selling on the peaks and buying on the troughs. They keep the market stable, but they also sell on bad news and buy on good news.

Small private investors have to try to guess the news before it comes out and buy when good news is expected. The dealing fees favour the big traders and are unfairly loaded against the small private trader. Many private investors gamble on the riskier investments thinking their knowledge and skills will make them money.

Emotions influence all investors, the investor who shops at Tesco is more likely to favour Tesco than Sainsbury’s or Morrison’s when they are deciding which shares to buy. Tesco has been quite a good investment for me, but it did go through a phase when it dropped dramatically. That’s when emotion and rumour trashed it’s share price and that was when I bought. The average price was about 173p including dealing fees and the price today is 215.9, but the price has been dropping as investors get less emotional about it.  I still think that price will advance further. I don’t give advice, but if I did it would be a strong buy.

Premier Foods dropped this week and I was back making a loss. I think at 41.75 that is still under-priced, but it’s coming back as the company gets control over it’s finances and puts more money into advertising and marketing. I get the impression that Mr Kipling products used to be premium products and they have slipped down market. They really need some new high profit premium products.

RSA insurance is still struggling and that’s another one  that has slipped in price and I’m making a small loss on those shares. A rise in interest rates could make all the difference. They too need some clever marketing to boost profits.

Peaks and troughs

This is a chart of my portfolio over the month of May. The election result gave it a boost, but we are back to reality this week. I’m still 1% up this month, compared to over 3% last month. I didn’t do any dealing this month. I did plan too, but then thought the market would drop back. I think I was right, this is a trough and maybe I’ll be buying in June.

Verona Pharma was a good investment for me, going from 3p to 4.25 and I’m expecting more good news soon. Taylor Wimpey stands out as my best investment, which I bought at 100.38 and this morning are at 184.8. That looks like being a multi-bagger. I’m waiting for some good news on Graphene Nanochem too, I think that is a very promising company that will soar one day.

I added Monitise to my watch list this week. They are on 12p today having been diluted. I shall be watching for the peaks and troughs in that share price.

That’s it for today, please share you views and ideas in the comments box. You can also follow me on Twitter for updates or subscribe using the widget in the sidebar.

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