View the article online at http://citywire.co.uk/money/article/a597091
Diary of a Dumb Investor: I won't be following America off a cliff
I've sold my Lloyds (LLOY.L) shares; next up I plan a shrewder move, drawing on my deepening investment know-how.
I’m still trying to free up some more cash as well as shore up my position against the evil, squabbling forces of the eurozone, eating away at my profits and – to be frank – boring me senseless.
That way I’m ready for the Big Rally but also safe against the Big Crash, come what may.
Maybe, having just ditched my loss-making Lloyds (LLOY.L) shares, this time I should sell something that has made me money. That would mean, yes, I would make a profit.
Where I stood on Monday: Click to enlarge
So how about the cannily-named iShares III plc S&P 500 (ACC) USD (GBX) (which in non-robot speak is an investment that tracks the US stock market)?
Here are my reasons to sell, reaped from some shrewd Googling (I’m still to learn an alternative investment strategy – thoughts genuinely welcomed):
- The US economy, which was looking good, is starting to turn a little peaky
- If the eurozone continues to crash and burn – give me one reason why it won’t – then US shares will suffer in line with other shares (surely?)
- Commodity prices are falling and 30% of S&P earnings are tied to global commodities (though how you confirm this sort of stat pulled by a random US website, dealt to me my Google, I don’t know)
- City spinners say US shares are cheap – but so it seems is everything else available. Other City spinners say US shares are overbought – presumably that means when sentiment turns there’ll be a frantic orgy of selling.
- As the euro falls, the dollar rises. This makes it more difficult for exporting US companies.
- This ‘fiscal cliff’ business worries me. A City type quoted on this very website says that if the US does not fix its finances then ‘we go over the cliff Thelma and Louise style and we have a recession in the US’.
- Besides, the presidential election is coming and who knows what that will bring?
- In short, the politicians in the US seems as troublesome to my portfolio as those in Europe.
When do I sell though? Last week I gleefully recounted in this column about how I was going to ditch Lloyds, planning my move just when the bank’s shares were really soaring ('buy low, sell high' I chanted to myself).
'This guy's not so dumb after all', you thought – picturing me, I imagine, sat behind half a dozen flashing screens, shouting into two phones at once. In the event though I got nervous, distracted or something, and sold them the next day by which time they were back deeper into the stink.
It takes nerves of steel to see this stuff through.
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by Gavin Lumsden on Jul 22, 2016 at 16:24