Taking stock

Thursday, 15th October 2009 09:41 - by Boredmum

I have spoken recently about my indecisiveness and coming out of a share only to go back in and buy them again. There have been many shares that I have done this with and I have done it for many different reasons. Sometimes I expect a retrace, so I sell looking to come back in cheaper. In many cases it has worked, but in many cases it has failed. The most predominant failure of that scenario had to be Gulf Keystone Petroleum (TIDM code: GKP), where I expected a retrace at 28p and it proceeded to the heady heights of over £1. To be honest, once I start to get close to what I would consider a decent profit, I do get a bit ‘jittery’. I have found with some stocks that I need to take some time out, take stock and really think about what I want to do. Many times I have found that by selling these stocks it removes the ‘pressure’ and I can think more clearly. The good thing is that if I do decide to go back in, I can then treat it as a new transaction. For me, this means that profits are banked and I am in a totally new transaction. It may not make sense to many, but it means that when and if the sp continues to climb I don’t get so ‘jittery’ on the little dips. I guess it’s just that psychologically the profits are much smaller. I have banked excellent profits on Ascent Resources (TIDM code: AST), only to buy back after a period of consolidation. Again, I took some nice profits on Churchill Mining (TIDM code: CHL), only to then decide it had much further to go and buy in again. I know this is probably not the best investment strategy and I do admire people that have a clear vision of what they expect from a share price and patiently wait. I held the very first share I owned for 4 years, but didn’t follow the markets daily then. I would only check every once in a while and only sold as I wanted to buy a new car. I sometimes wish I could have that patience back again and, although improving over time, I still have a desire to bank profits too quickly. Perhaps it’s not that bad. After all, I am happy just to be making profits.