the great british trade off

Humbug’s in danger of being renamed Sunny Jim as he adds £1912 in the week and can’t stop beaming; Fagin loses his discipline

 

HAPPY, HAPPY, HAPPY. The markets giveth and the markets taketh. This week it’s giveth. The volatility we’ve had for the last few months is a big worry to me. I’m looking to build some serious wealth across all my investments, although I only report on the £100k that’s in the Great British Trade Off, and too much volatility is hard to cope with.

Like all of us I guess, I invest because I’m seeking financial independence and the freedom that goes with it. What I like is nice calm steady increases, not wild swings.

But hey we are where we are. Either I sit the market out till everything calms down which I think is too risky in itself, or I continue to invest, looking for momentum but guarding my back with tight money management.

Unless things get totally out of control, it’s going to be the later.

This week my running total is up almost 2%, a gain of £1912.

What’s not to like in that? Apart from the fact that it could just as easily have been down 2% the way things are dancing around their handbag.

In last week’s report  I explained that I’d been whipsawed out of the Legg Mason IF Japan Equity Fund and would be playing musical chairs with myself as it had immediately made a buying signal, so I would be buying back in this week.

 

the great british trade off

 

The action is all in the green circle, volatility drags the price down through my stop (the red line) I sell to protect profits, locking in a gain of £650. Volatility then sweeps the price back up through my buying trigger (the green line), so in I go again.

I sold a £10k stake but being prudent I only bought £5k going back in. As I write my new investment is down £16 as the price has eased back from the 383.1998p I paid.

Looking ahead, the price needs to break through the resistance (a bit like a ceiling) that has formed at about 390p (the horizontal red line). If it does so convincingly then I think the next leg up to about 410/420p is on the cards.

 

the great british trade off

 

If on the other hand it fails to breakout, then another whipsaw is very likely. DUH.

I also said last week that I was going to do a sweep round the market to see if there was anything I should buy. Note the operative word, SHOULD. When I first started out trading twenty years ago I bought because I wanted to do something …………………….anything.

That doesn’t work too well I found. The days of buying cos I’m bored are long gone. Making money is better fun than just pressing buying buttons for the sake of it. Calmly thought out trades tend over time to make money. Buying for the sake of it tends to give you an RSI in the wallet.

There were however two funds I felt I should have more exposure to and I didn’t need to look that far as I held them already.

I’d already got £7k invested in the Neptune Global Alpha Fund which was nicely in profit. I added another £3k at 598.2p.

 

the great british trade off

 

The green arrow marks the spot, this topup trade is up £86 on the week. This is neither here nor there in the grand scheme of things, but it’s a nice emotional boost when you nail a rising price.

I also doubled my holding in the Baillie Gifford Japanese Smaller Companies Fund. Investing another £5k at 5075p. This trade is up £94 on the week.

 

the great british trade off

 

My buying trigger for a topup is when the price falls through the two week average (the green line) and then rebounds. I have a rule for myself that I never invest more than 10% of the portfolio in any one fund.

These last two investments take both funds up to their holding limit. It’s all about breaking eggs and baskets.

I’m now roughly 69% invested……………………………I wonder what surprises the coming week will produce.

 

Yours, aye.

Humbug

 

Time and tide will wait for no man, saith the adage. But all men have to wait for time and tide. Charles Dickens

The end of another week in the Great British Trade Off and my long positions in Cairn Energy (CNE), Evraz (EVR) and Highland Gold Mining (HGM) are all still open.

I am carrying a loss of -£1566 for the week and this is almost entirely due to me holding HGM through my stop at 139p. The excellent Sharescope chart shows my buying point at 142.165 on the 27th of June and the way the price has just slid away from me.

The green arrow is my buying point of 19000 shares, the red line is my stop loss!

 

HF 2207 5

 

This is so frustrating. It’s the same psychological problem I always have. I hate taking a loss and generally as you know I do my best to leave that job to Humbug!

I will be ripping off the plaster and selling these shares on Monday and then having another go at seeking financial freedom next week.

PLEASE NOTE, I’M SELLING MY HOLDING IN HGM BUT IF YOU HOLD THIS IS NOT ADVICE. PLEASE DO YOUR OWN RESEARCH AND MAKE YOUR OWN DECISIONS.

So, I need to learn from this experience and intend to. As one of my mentors David Paul says ‘I am only 8 trades away from where I want to be’.

I’m going back to square one and am publically committing to taking the next 8 trades exactly as my system says I should.

As always, looking forward to seeing how Humbug has fared this week in the Great British Trade Off.

 

Yours Fagin

 

www.seekingfinancialindependence.com

 

 





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