As markets continue to be nervous and downgrades of both banks and countries sweep across Europe you might be thinking I'd be changing my mind regarding my positive medium / long term outlook. This goes to show why timing is so difficult and why a short term strategy can fail.
The reality is that it's very difficult to pick the bottom and top of markets. Many industry experts were calling the top of the UK property market as early as 2005 / 2006 but it rallied well beyond then. However if you take a longer term view, short term fluctuations are only loses on paper, and might even be opportunities to invest further.
My strategy of buying what I believe to be good value stocks as I wrote about a few weeks ago is continuing and my outlook remains the same. Anything short of total Eurozone meltdown is not a problem and non of Europe's leaders can afford to let that happen. Short term traders trading of margin may have gotten their fingers burnt with this volatility, especially if they've been trying to call tops and bottoms. Taking a longer term view actually gives you a much wider window of timing which even the most respected traders and hedge fund managers rely on.
Showing posts with label Stock Market. Show all posts
Showing posts with label Stock Market. Show all posts
Saturday, 8 October 2011
Monday, 19 September 2011
Stocks
Further to my post yesterday about buying opportunities in stocks there has been further fall out in the markets due to continued fear over the economic situation. I'll reanalysed some of my positions and still feel that the long term market outlook is positive. The instability and stock volatility will be around for the short term but as mentioned before I'm not day trading. Any meaningful response to the debt crisis, which as I mentioned in other posts I believe will come through, should give the markets a shot in the arm. Thereafter the growth is likely to be much more steady with less volatility.
This shouldn't be construed as investment advice but banking stocks in particular have taken a hit and I think this is a buying opportunity. For example you can pick up RBS and Barclays stocks today for 22p and 151p respectively. Will be interesting to see where they are in 2 - 3 years time! Whilst liquidity is still tight the larger UK banks are generally maintaining their market share and the margins on lending activity are still very high.
This shouldn't be construed as investment advice but banking stocks in particular have taken a hit and I think this is a buying opportunity. For example you can pick up RBS and Barclays stocks today for 22p and 151p respectively. Will be interesting to see where they are in 2 - 3 years time! Whilst liquidity is still tight the larger UK banks are generally maintaining their market share and the margins on lending activity are still very high.
Sunday, 18 September 2011
Where I'm Investing Now
This is my first post about where I am actually discussing investments. I won't be giving specific stock picks as I don't want this to appear to be investment advise, however I will be stating where my money is going for the record and to track progress of my expectations. I should also note that I'm not a day trader and take a view over the medium / long term.
Over the last few months I have been increasing my exposure to the stock market and will be continuing to do this over the next few months at least. My aim being to select stocks that I believe are significantly undervalued with particular focus on stocks with good dividend yields. I'm attracted for two related reasons, firstly the low interest rate environment makes them an attractive income source and secondly for this very reason I expect that these stocks will be the first to recover and show the best growth over the next 2 to 3 years. Even the most bearish stock investors will struggle to resist the dividends of blue chip / high yielding stocks as interest rates continue to remain low. I do reassess my portfolio regularly but generally don't by a stock unless I think I'll be happy holding for at least 2 years. Also I am referring mainly to UK stocks simply because this is my native market and one I am more comfortable with; I do also have some exposure to European and US equities.
The looming shadows over the stock market that have caused the deep decline are well reported and at present the Eurozone crisis is the main factor. As touched on in a previous post I feel that the problem will soon be properly address simply because it has to be. Eurozone leaders have been guilty of just doing enough but have reacted when emergency looms and that is the situation now. The solution I expect to be a central European Treasury and formation of this institution will give the markets a confidence boost that the Eurozone crisis will be managed through. There will almost certainly follow a period of austerity in most of Europe but these factors have already been factored in to stock prices. Due to these continued austerity measures the market recovery will be slow but with a formal 'lender of last resort' in place in Europe there will be a feeling of stability and slow change in sentiment.
It is currently Sunday afternoon in London so all the stock markets are closed. The FTSE, DJIA, S&P and the DAX closed at 5368, 11509, 1216 and 5573 respectively on Friday.
Over the last few months I have been increasing my exposure to the stock market and will be continuing to do this over the next few months at least. My aim being to select stocks that I believe are significantly undervalued with particular focus on stocks with good dividend yields. I'm attracted for two related reasons, firstly the low interest rate environment makes them an attractive income source and secondly for this very reason I expect that these stocks will be the first to recover and show the best growth over the next 2 to 3 years. Even the most bearish stock investors will struggle to resist the dividends of blue chip / high yielding stocks as interest rates continue to remain low. I do reassess my portfolio regularly but generally don't by a stock unless I think I'll be happy holding for at least 2 years. Also I am referring mainly to UK stocks simply because this is my native market and one I am more comfortable with; I do also have some exposure to European and US equities.
The looming shadows over the stock market that have caused the deep decline are well reported and at present the Eurozone crisis is the main factor. As touched on in a previous post I feel that the problem will soon be properly address simply because it has to be. Eurozone leaders have been guilty of just doing enough but have reacted when emergency looms and that is the situation now. The solution I expect to be a central European Treasury and formation of this institution will give the markets a confidence boost that the Eurozone crisis will be managed through. There will almost certainly follow a period of austerity in most of Europe but these factors have already been factored in to stock prices. Due to these continued austerity measures the market recovery will be slow but with a formal 'lender of last resort' in place in Europe there will be a feeling of stability and slow change in sentiment.
It is currently Sunday afternoon in London so all the stock markets are closed. The FTSE, DJIA, S&P and the DAX closed at 5368, 11509, 1216 and 5573 respectively on Friday.
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