This morning I decided to sell my shares in PAF:Pan African Resources. It was a reluctant sale, as they have been great and I would like to have stuck along for the ride. However, my experience (albeit quite short) of AIM stocks that surge suddenly is that they crash just as suddenly soon after.
This had surged yesterday so it was making a 23.5% profit of £360.07. Rather than watch it vanish like I did with AFPO:African Potash, I banked it
Needless to say I was wrong yet again. The price went up another 11% today so I would have got over £500 if I'd waited until tomorrow.
However, I've been warned about this sort of thing in books. Don't look at a share once you've sold it. If you're happy with the profit, then that's all that matters. I'm happy with 23.5% return, especially as I also have £90.29 dividend from these shares, so the return on my investment was actually 29%. The share could just as easily fallen today, and may do tomorrow.
The sale also means I have £2,000 sitting in my account just as the market is at a low, so I can get some new bargains. I think I will sit on the cash for the rest of the week though. If Pan African drop back down again, then I will almost certainly buy back in. There are 2 other shares I'm watching closely too, so we shall see what transpires...
One of the reasons I sold the shares is that my average monthly rate of cash return had dropped below my target of 6%. I wanted to give myself a buffer so I don't need to sell again for a while. The effect of the sale was to put the rate of return up to 8.58%, although this will come down when the money is re-invested and the portfolio cost price goes back up, and when I add another week to the calculation on Friday. I may yet transfer the cash to my pension as I attempt to get it up to £10,000, and £2,000 would mean £500 extra from the tax man.
Of course, the corresponding effect on the portfolio was devastating, as I removed my most profitable share and the performance plunged a few hundred quid. The portfolio also lost a bit of ground today, so Friday may make mixed reading.
Feeling happy but a little regretful.
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