View the article online at http://citywire.co.uk/money/article/a649004
Diary of a Dumb Investor: how Lloyds screwed me over not once, but twice
I have bragged enough about my rare successes. So it's time to own up about my biggest mistake yet as an investor.
**Lloyds shares have nearly doubled in value since I sold my holding at a huge loss last Summer**
There, I’ve said it.
I made a mistake, probably my dumbest as an investor so far.
Why? Impatient, I couldn’t bear the red stain on my portfolio. When I sold, Lloyds (LLOY.L) was down about 50% (since my predecessor on the portfolio, the first Dumb Investor, bought the shares in March 2011).
And at the time, before the eurozone existential crisis became nothing more than a historical curio – back when a Greek exit really was being taken seriously – more short-term losses looked likely.
Everyone was bailing out of companies that were heavily exposed to the eurozone, like Lloyds.
But then, thanks largely to politicians and bureaucrats, the company’s fortunes changed.
European enforcers made Lloyds slim down, selling hundreds of branches. But this was good for the bank, cathartic even.
Then, Downing Street went easy on Lloyds when it announced banking reforms.
To top it all off, the Bank of England announced a new bank aid programme (the 'funding for lending' scheme), which if nothing else raised sentiment around banking shares.
Importantly there were big improvements in attitudes towards the eurozone and the global economy as a whole. That’s good for banks.
So there you have it. Lloyds has screwed me over twice: first for its role in the financial crisis and subsequent taxpayer bailout; and second for losing me money as a shareholder.
The Citywire guide to investment trusts
In association with Aberdeen Asset Management
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