Watching the market #investments
As a small investor, I’m always watching the market and this week my attention was turned towards the US markets. The Federal Reserve increased their base rate and this has global implications. The Bank of England decided to leave our rates unchanged, but for how long? There are already signs that the US dollar will appreciate against other currencies and my shares in GSK are finding favour again and seem a bargain compared to their October price. They have lost £2.00 a share in 2 months.
In retrospect I should have sold GSK at £17 and taken advantage of the rise after the Brexit vote but it is a good one to have in your portfolio for the long-term. It is low risk with quarterly dividends and the prospect of higher profits from exports that will benefit from the lower GBP.
Watching the market
I only usually watch the London stock market but this week I did wonder if there were any bargains to be had on the New York Stock Exchange. I think there will be major shifts in policy with a Trump administration and a basically right-wing Republican policy. The new administration will be corporation friendly and some companies such as General Motors could be worth watching. Big construction could do well if there is a programme of infrastructure improvements too.
To sell or not to sell
There are two theories related to selling shares that are doing well. One theory is that if the price has gone up then you should sell and take the profit. The other theory says you shouldn’t sell shares that are doing well. Both theories seem to make sense, so you have to look at why a share is doing well. Is this a temporary spike that you can profit from or is the share price likely to continue to climb? I decided to sell RSA this week based on an evaluation that it is probably not going to continue to climb much more. I bought in 2014 and my return is over 20% so that is reasonable. I also needed a little more cash in the bank because I’m thinking of changing my car! I shall keep watching the market in the short-term and might use that cash to take advantage of a bargain.
The recent movers include Lloyd’s Banking Group which I bought after the Brexit vote. I’m now 1% up and expect something like a 50% upside, there if interest rates rise, over the long-term at least. Solo Oil has made some movement and we are waiting for news on the NT2 well in Tanzania. Many investors are hoping for a huge increase in the share price. We are hoping for a 300% increase by next summer! That will be for starters. I am looking forward to a long-term exponential increase as results come from the NT3 well and maybe there will be other wells in the future. There is also the Horse Hill investment to consider. Premier Foods has made some progress too in the past two weeks. I can’t remember how many Mr Kipling mince pies they have made this month but it is a huge amount. Hopefully that will add to this quarter’s profits. I had given up on Graphene Nanochem and their miracle lubricants but there have been some RNS that could mean they will rise from the dead. They have been suspended since June because they didn’t submit audited accounts, but in November they proposed a share capital reorganisation. They said the new shares were expected to be submitted to trading on AIM on the 7th of December. That didn’t happen and so they are still suspended. It would help my portfolio if they came out of suspension even with a diluted share capital.
Monitise is another company that I hope will make a comeback. At least their shares are still trading albeit at a fraction of the price that I bought at. I can accept the loss because my portfolio is diverse, but we always hope that the losers will turn around in the long-term.
Overall, because my investments are diverse, I’m quite pleased with how things are going. I think Solo Oil and Premier Foods are the most promising shares but I’ll keep watching the market and looking for new opportunities.
I don’t give advice, but if I did I would always say diversify; don’t put all those investment eggs into one basket. If you would like to subscribe to this blog just enter your email address at the top of the sidebar or follow me on Twitter for updates. I also post links and other stuff on my Facebook page.