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One of the benefits of preparing a portfolio for retirement is using all the knowledge accumulated while building it in the first place. Since I hope to be able to retire in the next 4 years am INCREASING my risk so that I use the 3% rule to draw against capital. There are a few lessons that I have learned and that have served me well.
The first is never to place any bargain in the first or last half hour of market hours. MM’s are setting out their stall and trying to find the price to buy and sell at the beginning of the day so that they have consistent pressure and in the last half hour as they close their books and prepare for a new day.
If anyone is interested in the ramblings of an old bloke, I will oblige, but, strictly speaking it is off topic.
No it's interesting, feel free to ramble... Not much else going on here, well not at least untill we get some huge Virolens orders!
Always interested in hearing the wisdom of others.
I don't think anyone would be interested in my stupidity. ??
Having said that, I have done pretty well in the last year turning a 25% loss into (currently) 13% profit but having made the loss in the first place I know things can go wrong very quickly.
I don't even own this share, but am an alas fan since he left the saga bb on some point of principal...soaking up his wisdom is the highlight of my investing adventure...
Alan,
Go rethink your strategy.
This is absolute bllx...
‘The first is never to place any bargain in the first or last half hour of market hours. MM’s are setting out their stall and trying to find the price to buy and sell at the beginning of the day so that they have consistent pressure and in the last half hour as they close their books and prepare for a new day.’
Go and read the guidelines on the London Stock Exchange site. Get to grips with the basics of Mifid 2 and understand how level 2 works.
The first half hour can be the most lucrative.
Here’s an example from today. PUR closed up 12.9% on TSX yesterday and yet opened up 0.5% on LSE today. That’s even after CAD/GBP exchange rate. PUR went on to close up 13.5% today! It’s main listing is TSX. Sleepy MM easy money!
Or look at how many RNS spikes you can sell into on good news or on bad news even send NT and beat the rush to dump!
Gosh the list is endless! IMVHO you believe what ‘they’ want you to believe. Go field trial!
Trek
TrekMadone, thank you for your generous contribution. You confuse investing with trading. A simple choice befalls those that can distinguish between traders and investors. I cannot pretend for a moment to have ever used level 2 at any point in the last 42 years for any purchase or sale of any equity. I have though used the basic tools, originally with graph paper and newspapers though more recently with the myriad information available since 1990 when I bought my first computer and later that year had primitive internet access.
The skillset needed to be a trader are highly focussed, perhaps considered as gamblers. I expect a trader to know everything in minutiae for perhaps 4 or 5 equities. For the returns that I expect from my portfolio where my goal is simply to beat the market, I do not need such depth of information.
And the distinction is drawn from the capital that is prepared to be exposed to the equity. Between my ISA and that for my wife, there are some 70 holdings. The last of our joint capital was sheltered in this years allowance. Including the disposal from jointly held asset to one or other ISA, a total of 22 bargains were executed last year. There have been 6 this year, all in the last 3 weeks.
With my average bargain a little over £xx,000, commission, spread, exchange rates and stamp duty (where levied) although noticed are very different from the type of instrument that the trader will use.
Since reliance is made through the design of an algorithim the trading process (buying and selling) to eventually achieve a goal, that same £xx,000 needs to be split into hundreds of tiny orders several times each day, perhaps even each hour for a trader to achieve their goal. Traders tend to claim that they always make profitable decision seemingly long and short at the best time and, I just don’t believe that to be true.
I have made no bones that I have owned shares in companies that failed.... Marconi, Cenes, Claims Direct, Graphene Nanochem, Torotrak, Albert Fisher etc. I have also bought shares at the wrong time such as Velocys, Image Scan, Tungsten.
What you do not know is that I have had to fully cash in my portfolio in 1985, restart it in 1987 only to cash it all in in 1992 and restart in 1998. The first time was when my business went bust, the second to prevent foreclosure with interest rates at 16% for mortgages.
As this will be inexorably dull for those others suffering my drivel, I suggest you and I filter each other as it compares apples with bananas, one being a fruit, the other a herb. Oh, and my handle is Alas_Jones. For 19 years until bullied off ADVFN, I used the handle Erogenous Jones. Prior to that, I haunted Interactive Investor site as The Troglodyte.
Thank you Waterloo1, though I fear placing any credence on an anonymous contributor has dangers. I do stress that I am not qualified to provide any financial advice but I have made more good decisions than bad ones in building my portfolio.
Those that have had the misfortune/pleasure of suffering my interminable drivel will, I hope, appreciate that I tend to comment in matters where I have (and I hate this expression), skin in the game. Actually, I am pretty binary in that I pay greater attention to those holdings that either have the greatest potential or the greatest worry.
To eliminate any confusion, I have built my portfolio entirely from INCOME. Although I began in 1979 following graduation, the real point was after I needed to cash everything in to prevent foreclosure in the 1990's when interest rates were at 16%. The next myth is that although I am extremely well educated, I am not a high earner. My preferred choice is to build my business to allow me to employ others. A note in the preface of an obscure play by the brothers, Kapek, is the mandate on which I like to live my life - "....it is the duty of the rich man to give employment to the poor man....".
Anyway, the advantage of making mistakes is twofold, first not to repeat and second to take advantage. Advantage is difficult when assets are sheltered in a tax efficient wrapper, so it is therefore important when beginning investing for the long term to use ALL the choices available. You will note that I align my drivel with investment rather than trading - totally different - so there needs to be an eye on taxation.
Right now, the bulk of my investments are managed for me when I realised that I had spread my investments far too thinly and had become little more than a managed tracker fund albeit consistently growing at an average 12.5% annually. These were transferred in 2012 to be managed on a discretionary basis and rationalised. I do though keep my "hand in" in managing the SIPP accounts for self, wife and both children along with a couple of tiny dealing accounts and an ISA for elder child. The dealing accounts are cashed in every 18 months or so with the proceeds transferred to a Discretionary Trust to mitigate the effect of IHT that my children will face on 2nd death despite yet to inherit.
So, although some numpty trader attempted to pooh-pooh comments about the wild fluctuations in prices first and last thing, I am correct. The strategy that needs to be adopted concerns shelters and taxation. I will continue in a moment.
The importance of NOT sheltering some assets cannot be emphasised enough for UK tax payers. Allowance of Capital Gains Tax (CGT) is generous, though may change in the future, but taxation on dividends less so. AIM is a different kettle of fish.
Tax rules are supposed to be simple. Good decisions that result in an uplift are gains* and poor ones are losses+. Yes this seems simple, but a gain is not a gain and a loss is not a loss until both the buy and the sale have been executed. Gains of £12,xxx (I don't have the exact figure to hand) can be made each year before tax is applied. Losses can be applied against gains and if these exceed those where a gain has been made can be carried forward for future years INDEFINITELY. Assets that could trigger a capital gain are really any asset that is not exempt. Exempt assets include assets that do not constitute a business such as primary residence, wine, art etc
The disadvantage of holdings that are without a shelter such as ISA or SIPP is dividends. This is now pretty thin pickings and limited to that that falls within your personal allowance and just £2,000 after that. In 2019 the FTSE dividend yield had risen to over 5% in 2019 but is currently around 3%. If you only invest in shares in the FTSE that pay a dividend, exceeding roughly £66,000 and there will be potential to pay dividend tax. Holdings in an ISA are not subject to CGT or dividend income tax, BUT losses in an ISA cannot be used outside that wrapper. SIPPs are useful in that the Government will add a minimum of 20% to any contribution (whether a tax payer or not) and at a higher level for higher earners. In other words an immediate uplift of 20% each year for every £1 invested in a SIPP wrapper.
The disadvantage is that the SIPP cannot be cashed in until retirement age and once retired and drawn against are then taxed under the prevailing tax rates at the time. The advantage (for me) is that a SIPP can be transferred outside IHT to beneficiaries.
TTG has the potential to generate whopping revenues as nations re-open using science based solutions with swift results. Of course, although results provided in short time, 100% accuracy is not claimed and additional tests will be required from those that are filtered.
Of the main airports in terms of passenger numbers, London ranks #22 behind 10 cities in China and 6 in America. If the technology is adopted at Heathrow (22m passengers) and Madrid (17m passengers), that is an awful lot of tests sold! Add Frankfurt (18m) or Amsterdam (20m) and ..... well you can see where this is going.
Shares are held for TTG in the ISA for my wife, my SIPP and in ISA wrapper for elder son.
Strategy therefore is not to be a slave to tax, but use tax laws efficiently. It is also important to understand WHY an investment has been made along with understanding of RISK.
Again I stress, I am not a financial advisor and that no-one should infer anything from my comments
Hi Alas, haha, great posts, what a treat on a slow day... I studied for a finserv qualification recently, (not even equivalent to an o'level), on my way to a career in equity release. As far as mifid, ucits and basel accords go, i imagine that conceptually, they are as irrelevant to as many people here as they were to Neil Woodford...It took me a long time to gain a superficial understanding of the cgt, divi tax, pensions and shelters which you outlined in a few sentences..that's genuine experience, not just learned to pass a multiple choice test, and instantly forgotten like mine..You didn't get that rosette for nothing...troglodyte!.
It can be disheartening when share prices appear to be falling, yet the broader sentiment is optimistic. This week has been quite a good example (well, for me and my investments, anyway) where we learn that the UK is most certainly re-starting business and removing many of the obstacles and restrictions to liberty.
The upbeat message to expect one of the highest growth rates in 70 years has not yet translated to share prices in those quoted companies that should be the great companies in the future - hydrogen fuel cell, battery energy, renewables etc. Actually these (in my portfolio) have been the worst performers for the last month.
Time in the market will usually benefit investors. After all, the research to pick the wheat from the chaff for growth companies (and TTG is one IMO) means that news to propel a share price is outside control and will happen when it happens. Trying to time for this is unrealistic and adds a layer of insecurity that need not be present. While it may be disheartening in the short term canny investors tend to have long horizons and desire substantial rewards for patience.
Bullettin boards have a nasty habit of attracting highly focussed remarks which have a sense of urgency. Of patticular concern to me are those that claim to have very substantial holdings and are following every nunce, twist and turnin the share price and claim that they are investors not traders and are not concerned about being underwater as their focus is on the long term.
More often than not, I will use the filter facility specifically on those that take this line. It is clear to me that they are worried about their exposure to the instrument involved and rely on the psychology that applause to their comtribution will mean that all will be well. Often these same person will claim market manipulation, short attack or some other unsubstantiated element to justify frustration.
I think that there has been just one occasion when I moved the market in an equity. It was a very lightly traded stock and i had “fat finger syndrome”. I placed a buy order for £10,000 shares and totally unknown to me at the time the NMS (normal market size) was £2,500. This was based on the average bargain executed over a rolling 3 month period. Now, £10,000 is not exactly big beans, but it was over 3x NMS so triggered an automatic 1 hour delay in reporting. (I did not know that at the time), but the market makers got a little excited. The share price began hopping around and in turn it triggered a flurry of bargains including trades between brokers. These are uncommon these days. The price moved up 0.75% and never fell back. Co-incidence, IMO as private investors tend to fizzle out when executing single bargains greater than £250k. The real movers are news and fund managers. Sadly with the proliferation of algorithmic bargains, fund managers can disguise their tracks.
I doubt that I could move any equity with a bargain of that size these days.
The strategy therefore is to ignore the loudest voices on BB’s and certainly ignore those that appear desperate and bang on about the benefit of a long term view.or that the market makers will not prise a share from their hands until it reaches £xyz.
The wise can learn more from a fool than a fool from the wise. I have much to learn.