Wednesday, 27 July 2016

SIPP Decision, Sell More Gold and a New Venture

Lots has happened over the last few days.

I spent much time contemplating the £1,100 in my SIPP over the weekend, and in the end decided that the key to pension investing is to have a core of solid, blue-chip big-dividend payers. No more risky growth shares - time to get sensible.

Once I had made that decision, it was a no brainer where to invest the cash. I had switched my monthly savings to LGEN:Legal & General because I felt Brexit had been unfairly cruel to the share, and with a dividend yield of 6.5% along with growth prospects, I bought 554 shares at 196.5p costing £1,103.00 with the commission and £5.44 stamp duty. That takes my holding to 642 shares at a weighted average price of 194p costing £1,262.37. Happy to say they've gone up and are £34 in profit.

The dividend ex-date should be around mid-August for the interim dividend which should get me about £25. The main dividend ex-date isn't until April when it should be more like £65. I'll keep my monthly savings topping this one up until the Brexit bargain price has been factored out.

That sorted out my pension - it didn't sort out my holiday money. I really needed to get some cash back into my current account ready for September when I pay the balance of my trip to Peru (in dollars - eeek!!). With that in mind I put my AVM:Avocet Mining shares on a limit sell order for 108p this morning. I should never have bought them, especially on a big upwards spike. They have too much debt and too short a working life on the mine, so it was a bloody stupid buy.

I've never successfully sold using a limit order before. The share price always drops and I end up cancelling it. Happy to say it went up today - in fact it went past 108p to 110p. Never mind. I sold them for 108.3125p making a profit of £34 (3.5%). Given these were losing £350 at one point, I'm mighty relieved to have got out with anything at all. This liberates £1,063 to return to my current account.

However - that would be too easy...

I've had a cunning plan.

I was miffed at my attempts to make a quick buck with AVM:Avocet Mining and EMH:European Metals. This isn't investing, it's trading. I didn't get into this business to gamble it all way on attempts at short term gain. I need to focus on investing - go back to the basics of value investing I learned from Graham and Buffett. However, I need to acknowledge there's an itch that needs scratching, and there will always be a temptation to try my luck. How can I satisfy that need without compromising my investment strategy?

I can set up a separate trading account!

So I did...

It's seeded with £500. The rules are that I will never, ever add any more money into the account. I will never spend more than £500 on any share. I will hold for small profits and then sell, keeping the profit and spending no more than £500 on something else. I'll only be able to buy a second share when my profits have got to another £500. Playing around with this account should stop me being tempted to dick around with my investment account which is for considered, long term saving.

I'm quite looking forward to the idea of seeing how much I can make £500 worth in one year, and reporting progress on here. If it goes tits up, I can't lose more than £500. If it goes well, I may have to consider shifting it into an ISA - but there's no point when I'm only likely to be making tens of pounds profit.

Now then - what should I buy with my £500? At the moment nothing as Hargreaves Lansdowne haven't sent the confirmation email yet. I'm tempted by an existing share SLP:Sylvania Platinum, as the platinum price has rocketed today and they're about to announce a trading update. It could be a perfect storm. The share price hasn't dipped to a low, but it's not spiked to a high either. Analysts are suggesting a fair price of 20p compared to the current 9p, so there could be an opportunity to double the £500. I would keep my existing shares long term, and ditch the new ones for the profit.

Of course, I may get something else instead...

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