What's happened to my portfolio in the last 2 weeks?!

JohnRo

Glen_Clark wrote: »

Interesting commentary on the October financial storms here. You just have to allow for the political bias in the Torygraph which tends to 'put lipstick on the pig' when it comes to Cameron & Osborne's economic performance - see also best comments below the article : http://www.telegraph.co.uk/finance/financialcrisis/11167155/Falling-stock-markets-Here-we-go-again-....html

Look on the bright side Glen, the worlds bankers and CEOs have managed to transfer 50% of global wealth to themselves. Just wait while all that starts to "trickle down", can't be much longer now can it?

http://www.theatlantic.com/business/archive/2014/03/how-you-i-and-everyone-got-the-top-1-percent-all-wrong/359862/

Rob_192

A_Flock_Of_Sheep wrote: »

With further steep losses to come people would be daft buying into equities for a while

That's a fact is it?

My biggest regret with regards to investing is that I stopped my regular investnments during the last crash. It was probably one of the most costly mistakes I have ever made.

Earlier in the year I tranfered a number of cash Isas and with other additional funds, I had until recently a substantial sum held in cash (several tens of £k). I have been busily buying as the market has dropped and finally made my last purchase yesterday with a tranche of BP at 406p. I have not even been close to timing the bottom (if indeed we have seen anywhere near it), but on the other hand I bought cheaper than prices have been at recently.

These are shares I never intend selling (ever), so I'm not in the least bit worried, I'm buying an income stream and am more than happy with the yields on offer.

But to say I'm daft, well we'll see.

R

A_Flock_Of_Sheep

Rob_192 wrote: »

These are shares I never intend selling (ever)

R

I kind of thought the idea with shares is you buy with the thought of selling sometime (indeterminate time) in the future with a profit.

TCA

A_Flock_Of_Sheep wrote: »

I kind of thought the idea with shares is you buy with the thought of selling sometime (indeterminate time) in the future with a profit.

Not necessarily. Many investors create revenue streams from high yield or income portfolios, with no intention of ever selling.

bowlhead99

A_Flock_Of_Sheep wrote: »

I kind of thought the idea with shares is you buy with the thought of selling sometime (indeterminate time) in the future with a profit.

We are not all trying to trade shares to take profits by being a speculator. The bit you snipped out of Rob's post about buying the profit/income entitlement seems a perfectly reasonable investment thesis.

Owning an x% slice of a company and its future profits and the associated income stream that comes to you as an investor, is something that someone might want to do for a lifetime and pass that asset onto their heirs without ever planning to exit and pay a tax on the gain made. Hopefully the asset will appreciate in value at a rate that equals or exceeds inflation, but that doesn't mean you necessarily want to exchange the asset for cash instead of keeping it.

I didn't buy my house with a view to selling it for a profit after an indeterminate time. I bought it because I need a roof over my head and ideally one that doesn't lose value in real terms. Similarly perhaps Rob is buying for an income stream that he hopes will grow over time without eating into the capital in real terms. Private investors and pension funds have been doing that with companies for half a century or more.

I guess your idea of why people buy shares explains why you've bought and sold so many shares and funds and sold again within a matter of weeks or months or a year, since you started posting your investment journey on here a while back. But many of us aren't just looking to "flip" shares at a profit, that's simply something that happens from time to time as our portfolios evolve and we try to keep our exposure allocated as we want.

Ryan_Futuristics

PenguinJim wrote: »

Unless I'm misunderstanding, that "Average Investor" is surely an average of people who buy funds/shares as long-term investments (i.e. buy and hold) as well as people who "trade" (buy/sell/buy/sell/buy/sell/buy/sell/suicide).

Oh yeah, the whole lot

But when you read a study saying 'the average investor can't predict the market any better than flipping a coin' you may think it says something about the futility of predicting market movements

But this 'average investor' is clearly the clueless dabbler ... Anyone who's read a few good books on stock picking (or just uses a formula from a stock screener) should be able to at least stay within sniffing distance of the index ... The fact they're returning 2% means they're making blunders at every given opportunity

Ryan_Futuristics

A_Flock_Of_Sheep wrote: »

I kind of thought the idea with shares is you buy with the thought of selling sometime (indeterminate time) in the future with a profit.

Warren Buffett famously said "Our favourite holding period is forever"

If you can pick those companies that'll be at the top for decades, you want to hold onto them ... Companies like this are rare, however, and it takes a lot of research to spot them early on

Buffett's mentor, Ben Graham, would more likely sell a company when it reaches its fair valuation

Rob_192

A_Flock_Of_Sheep wrote: »

I kind of thought the idea with shares is you buy with the thought of selling sometime (indeterminate time) in the future with a profit.

No that's gambling! I invest in a portfolio of high yield shares primarily to get the income stream from the dividends. My portfolio typically yields somewhere between 4.5 -5% (obviously subject to variations in current share price). All my investments are in SIPPS or ISA's so not subject to tax. I hold a diverse range of shares (approx 40 in total) spread over about 25 sectors. I don't really give a monkeys about the capital value, because I don't really intend to sell. Having said, capital can matter because I usually try to hold a bit of cash in reserve to do some buying when the market drops - but timing is damned near impossible as we all know, which is why it also makes it damned near impossible for you to make money using your strategy unless you happen to be very lucky - as I say gambling.

What I find strange from your comment "With further steep losses to come people would be daft buying into equities for a while", is firstly you have no idea whether there will be further steep losses and secondly, if you are investing purely to make money on a capital gain as your comments seem to suggest, then surely the time to buy is when share are depressed. I like to buy when they’re depressed, purely because I can buy more shares for my money and hence achieve a higher yield.

Just to explain my strategy a little further, I am 50 and intend retiring at or a bit before I am 60. To achieve this, I am ploughing everything I can into buying an income for my retirement - In retirement you need regular income and you can either achieve that from buying an annuity or drawdown. I intend to use the latter, hence the reason I don't intend selling my shares. They will hopefully form a nice inheritance for my kids, but that's a bonus. I buy shares not funds, because it's the most cost effective investment method. Funds are just a basket of shares, but with an ongoing annual fee to pay - In my case I have a one-off broker fee/stamp duty to pay when I buy and thereafter it costs me nothing (other than a very modest platform fee). Add up the management fees on funds held for 30-40 years and see what I mean.

R

DesG

A_Flock_Of_Sheep wrote: »

I kind of thought the idea with shares is you buy with the thought of selling sometime (indeterminate time) in the future with a profit.

I think you have seen too many films, do you shout BUY BUY BUY and SELL SELL SELL at the screen too?

A_Flock_Of_Sheep

DesG wrote: »

I think you have seen too many films, do you shout BUY BUY BUY and SELL SELL SELL at the screen too?

No I don't do that. But it is an active market so why not make the most of it?