Has the market peaked?

economic

chucknorris wrote: »

I've just sold my British Land shares and switched back to a tracker, for what its worth I think British Land will go even higher. But as the price went up the yield was reducing, and the higher yield was my reward for taking a risk with a single company (rather than a fund/tracker). So I was happy enough to take my profit (about £20k) and reinvest it, if British Land does fall I may reinvest again for the yield.

i think thats sensible. Personally i would never have a single company (even something like British Land) being more then 2% of my portfolio (risk management is very important to me). I will hold onto it for dividends and to diversify away from my mainly growth orientated portfolio.

GreatApe

One of the advantages of property investing is that volatility is so low and price discovery for a given property difficult to pinpoint exactly that it keeps investors sane. Also the transaction fees so high that you really dont bother thinking about selling it and buying back in.

I own some shares and I find the direction of movement influences my mood and feeling about the stock. So when my British Land shares were falling from 640p down to 600p it makes me feel bad about the stock, when they went from 600p to 670p you feel good about it. This type of emotional investment is a bad thing.

I think I may have to discipline myself to only look at stock prices once every 6 months or even once a year and then only on a graph of moving averages.
The ramp up to 670p did make me think about selling however I think I will have to override that and stick to my original idea which was to buy for the dividend and hold for 30 years.

Actually it would probably be good to set an upper price where I would sell if it exceeds what I feel is within the fair value bound. I should probably do that for my shares. That might be >750p for British Land at which point its yield would be just <4%

chucknorris

GreatApe wrote: »

One of the advantages of property investing is that volatility is so low and price discovery for a given property difficult to pinpoint exactly that it keeps investors sane. Also the transaction fees so high that you really dont bother thinking about selling it and buying back in.

I own some shares and I find the direction of movement influences my mood and feeling about the stock. So when my British Land shares were falling from 640p down to 600p it makes me feel bad about the stock, when they went from 600p to 670p you feel good about it. This type of emotional investment is a bad thing.

I think I may have to discipline myself to only look at stock prices once every 6 months or even once a year and then only on a graph of moving averages.
The ramp up to 670p did make me think about selling however I think I will have to override that and stick to my original idea which was to buy for the dividend and hold for 30 years.

Actually it would probably be good to set an upper price where I would sell if it exceeds what I feel is within the fair value bound. I should probably do that for my shares. That might be >750p for British Land at which point its yield would be just <4%

I too had 750p as a target, also based on only a 4% dividend, but then I started to think if a tracker can give me 4%, then I should expect more from a single company for taking on more risk, so when it reached 670p today I sold the lot (at marginally more than that). I mainly paid 640p, but I had also bought more (but not that much) when the price dipped below 600p, as the dividend was over 5% at that price.

It is obviously all the recent talk of a soft brexit driving the price up, so I suspect that the price will carry on going North. But the bottom line is that I'm happy with the price that I sold at, and if it got much higher I would have been increasingly wary of the dividend percentage getting lower.

chucknorris

ilovehouses wrote: »

I sold all my single shares and purchased trackers instead. Mainly to increase diversification but partly due to spending too much headspace thinking about whether to buy or sell them.

I know exactly what you mean, although I do find it interesting, but you can keep the moments when the price is down. I never (rarely) feel that way about my trackers though, I am happy being passive, but with single company shares, I feel all the responsibility for putting myself in that position.

economic

chucknorris wrote: »

I too had 750p as a target, also based on only a 4% dividend, but then I started to think if a tracker can give me 4%, then I should expect more from a single company for taking on more risk, so when it reached 670p today I sold the lot (at marginally more than that). I mainly paid 640p, but I had also bought more (but not that much) when the price dipped below 600p, as the dividend was over 5% at that price.

It is obviously all the recent talk of a soft brexit driving the price up, so I suspect that the price will carry on going North. But the bottom line is that I'm happy with the price that I sold at, and if it got much higher I would have been increasingly wary of the dividend percentage getting lower.

If the shares had fallen a lot so that they then yielded say 6-7% would you have bought more? Would you keep buying if the price kept tumbling so yield became 8% then 9%?

I probably wouldn't as there could be a fundamental reason why the stock is falling that much (eg rents falling, property prices falling).

The same logic can be applied to price increasing. You sold as the yield dropped. But what if the price kept rising? If there was a good reason for it wouldn't you rather keep it for the capital gains?

What i am trying to get at is yield should not be your only consideration when owning a stock and whether to decide to buy to sell. Its only part of the question, even for value stocks like british land.

chucknorris

economic wrote: »

If the shares had fallen a lot so that they then yielded say 6-7% would you have bought more? Would you keep buying if the price kept tumbling so yield became 8% then 9%?

I probably wouldn't as there could be a fundamental reason why the stock is falling that much (eg rents falling, property prices falling).

The same logic can be applied to price increasing. You sold as the yield dropped. But what if the price kept rising? If there was a good reason for it wouldn't you rather keep it for the capital gains?

What i am trying to get at is yield should not be your only consideration when owning a stock and whether to decide to buy to sell. Its only part of the question, even for value stocks like british land.

I wouldn't have bought that much more, because of the tax status of REIT dividends, I would not have invested outside of my SIPP or ISA. So my additional purchase was limited to my annual SIPP top up of only £10k (my relevant income is low and my ISA allowance was already used up this tax year) plus the accrued dividends from two quarterly payments. But I take your point, there has to be a point when you look at the graph and wonder if the price will ever recover. That is exactly why I don't like single company shares, on reflection, I did invest too much, so I am extremely unlikely to invest that much again in a single company (or collection of single companies).

I am much more focused on income than growth.

westernpromise

GreatApe wrote: »

But just like China appeared to go from nothing to world power over 20 years so will India.

The big difference is that India has socialism. This will keep it poor.

GreatApe

chucknorris wrote: »

It is obviously all the recent talk of a soft brexit driving the price up, so I suspect that the price will carry on going North. But the bottom line is that I'm happy with the price that I sold at, and if it got much higher I would have been increasingly wary of the dividend percentage getting lower.

I think its to do with the recent news of Hammerson offering to buy out intu properties and Unibail acquiring Westfield properties

economic

westernpromise wrote: »

The big difference is that India has socialism. This will keep it poor.

The population level IQ difference between China and India is significant. China IQ levels on average are over 105 whilst India is around 80.

This alone could make a very big difference in economic potential of both countries. China clearly has far superior intellect vs India and so is likely to outperform India economically for many decades.

chucknorris

GreatApe wrote: »

I think its to do with the recent news of Hammerson offering to buy out intu properties and Unibail acquiring Westfield properties

Although that is a benefit, I think that you are under estimating the difference of a soft versus hard brexit to commercial property in the UK, it is absolutely massive.