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soon this company will have twice as much dept as its nav
theluckyguy, for anyone who's owns these shares at a higher price it's pretty obvious this is not good as they will have lost more of their capital than they have received in dividends, this is always the danger with investing in individual shares
as the saying goes it's not how much you can afford to invest it's how much you can afford to lose, unfortunately it's not a very nice experience when it happens, and most of us will end up in this situation at some time or other
everyone has their own opinion, but i don't think anyone knows if this is the bottom or not, the possibility of a dividend cut could be a game changer, but there will always be winners and losers, anyone who gets in here at the bottom will most likely make a good profit when things get better, and good luck to them that's what we all try to do
unfortunately though you do get a minority of posters who just want to mock others losses, a bit sad really
best of luck all
"for anyone who's owns these shares at a higher price it's pretty obvious this is not good as they will have lost more of their capital"
Robleo, a paper loss isn't a capital loss until you sell, just like a paper gain isn't a capital gain until you sell. Over my many years of investing I've sat on paper losses several times and sold when the the stocks went back into the black and made a capital gain.
I'm currently sitting on paper losses on all three stocks I own, but I'm confident that I'll make a gain when the prices recover and I eventually sell, however long it takes.
Now some will say, oh but Vodafone's, BT's, or whoever's price will never recover, blah, blah, blah, but the truth is an undervalued stock will always eventually recover to a value dictated by its fundamentals, in the meantime I'll keep topping up as I receive dividends.
Hi Fleccy, i always have to give you 10 out of 10 for your positive thinking, but of course everyone's circumstances are different and it depends on how long term you want to wait to get your return of capital
This has been a difficult few years for making profit from shares or funds and i expect it's been the same for most investors unless you were lucky enough to invest in something like the oilers at the right time, below is an article i have just been reading with hl
In September 2022, about three quarters of the FTSE 100 constituents failed to provide a positive return, with almost half generating negative returns of over 5%. It’s unlikely that even the most diverse UK share portfolio would avoid a drop in value in this scenario. We call this ‘market risk’, the risk that the entire stock market falls.
The second type of risk is stock specific. The individual company you own could run into problems. Perhaps because its competitive position has weakened or it’s particularly exposed to high inflation and interest rates
I have 4 shares i could name all paying good dividends and although they drop just like anything else, you can be pretty sure your capital with be returned at some time each year, then you have the more difficult shares like Vodafone and Lloyds , several years later and they are still in loss, it does make you wonder just how many years you have to wait to get your capital returned on some shares, even my best performing funds have lost around 40% of the profit they built up in previous years
thankful i I'm not in any rush to sell, but a bull market would be more than welcome
Robleo - this year has been rough for most buy and hold strategies, but the years before that were awesome - you just need to be invested in the right places. The FTSE 100 may have out performed in local currency terms this year, but on the whole it's a pretty crap place for a long term buy and hold strategy and there's no sign of that of changing. It's full of cyclical, old world companies that don't offer much potential for growth. The UK does produce great companies, but as soon as any of them show any signs of delivering outstanding growth over the long term they get bought out, usually by US companies. Arm Holdings is a classic example. World leader in semi conductor software design that's used by all of the main players and got snaffled up by NVDIA a couple of years ago.
I don't see that trend reversing any time soon so you're not going to see massive growth in large UK companies. UK smaller companies is a different story, and if you have the stomach for it and the necessary time horizons to ride out the dips, I can see that sector continuing to produce strong results over the long term, but you really do need a well diversified approach.
The one advantage larger UK companies do have is that they pay good dividends and trend fairly predictably. A swing trade approach of buying the dips, maybe collecting a few dividends and selling out when they get to the top of the trading range can produce very good results, although it is hard work, and you can't afford to fall in love with a share. Don't obsess with picking the absolute bottom or top as you can only do that in hindsight, and be very, very careful about going too heavy on one share as you won't always get it right. Sometimes you have to take a hit, especially if the fundamentals change. I've had to take a couple of painful ones over the last couple of years, but it was worth doing and I more than made the money up elsewhere. Losses are bad, but so is having dead capital.
I can see things continuing to be choppy for a while so I will be taking profits and looking for opportunities with the money I use to trade with, meanwhile I've got a few tech/crypto long term buy and holds, and every week I'm ploughing money into a portfolio of funds in my pension. The last few months all new money has been going into UK Smaller Companies as GBP has been battered this year making UK companies attractive, and buying USD companies with GBP far less attractive. You can avoid the currency issue by using a spreadbetting account, but tbh the costs are so high now it's not really worth it, plus you get slaughtered on dividends with the with holding tax and currency conversion.
That's my plan and it's working, but like you said we are all very different. I'm still working and accumulating, and the plan would be different if I wasn't.
Hi Compound, thanks for those useful tips, best thing i did this year was sell off a lot of underperforming funds and bought more dividend paying shares when the prices were low, so far they are all still paying full dividends and providing income when the share prices are down, with hindsight had i sold off some of my shares when they were at there top price last year i could have bought some of them back at a lot lower price, will have to keep looking for good opportunity's and potential growth
cheers