Stock markets end another turbulent week with more losses

The FTSE100 has closed down just over 1% to end the week at 5040.76 after spending some of the day below the 5000 level.

Autonomy was the outstanding winner today, up over 70% as the market digests the news that it has agreed to be bought by US giant Hewlett Packard. The biggest purchase of a FTSE100 company since Kraft took over Cadbury.

The FTSE250 ended down over 100 points at 9759.06 while on the continent The Dax ended over 2% lower at 5480 and France’s Cac 40 ended at 3016.99, down nearly 2%.

At the time of writing, the Dow Jones is down 10.71 points at 10979.87

Another week, another few Billions wiped off the value of stock markets around the world.

So what is an Amateur Investor supposed to do in these turbulent times? Well here are a few blog posts that I’ve been reading this week:

A plunge protection fund: Naughty, but nice – Monevator

10 questions investors should ask to beat the market storm and profit from a rebound – This is Money

Great Bargain, Shame About the Price – MoneyGrowers

6 Rules To Stop You Losing With Shares – Yahoo Finance

5 Boring Shares With GoGo Brands – The Motley Fool

Is This Another Great Depression? – Do-It-Yourself (DIY) Investor

And one from last week:

Questor share tip: Five top stocks to calm rising tide of fear in markets

 

4 Replies to “Stock markets end another turbulent week with more losses”

  1. Interesting times. A bit of spare cash has had me looking around for new investment avenues and maybe now is the time to get stuck into some shares. Questions I’m asking are:

    * Will the FTSE fall even further in the coming days?
    * Are there some bargains to be had as some investors leave the marketplace?
    * Should I leave the shares alone and buy some gold or fine wine?

    All questions I would like help with please!! So, can the Amateur Investor or any other readers give me some guidance?

    1. Will the FTSE fall even further in the coming days?

      If I knew the answer to that then I could be a rich man! Buy I suspect we haven’t seen the bottom yet.

      Are there some bargains to be had as some investors leave the marketplace?

      Undoubtably. But I thought some of the shares I’ve bought over the last few weeks were bargains, only to see them cheaper days, or ever hours, after I’d bought in. In most cases I have continued buying to reduce the average cost I have paid for the shares. But if share prices carry on dropping then my available cash will dry up before the shares stop shedding value!

      Should I leave the shares alone and buy some gold or fine wine?

      I’d steer clear of fine wine. While there is money to be made in this market (helped in no small part by wealthy Asian buyers with an insatiable appetite for luxury goods), I would say that most amateur investors (me included) would be out of our depth investing in wine.
      And as for gold, who knows. The price of the yellow metal continues to break records, helped by investors seeking a “safe haven” in these troubled times. But as with wine I think us amateur investors should be sure we are comfortable with the risk before going into gold. Having said that, Bullion Vault makes it very easy to purchase gold and I have personally done very well with my Bullion Vault investing. I would have done even better had I not had to sell my holdings a couple of years ago to help fund a house purchase.
      Selling gold only to watch the price continue to rise… ring any bells Mr. G. Brown?

      If you are serious about investing a “bit of spare cash”, then could I suggest you look into a tracker or high yielding shares. If you can drip feed money into a tracker to even out the rises and falls then I think, over the long term, you will do well.
      And if you can pick up some high yielding shares at “summer sale” prices then as long as the dividends keep rolling in does it really matter if there’s volatility in share prices…

      So that’s my advice, for what it’s worth. What about other readers, what do you think?

  2. @ AI – many thanks for the inclusion. B-)

    @Steve P – its difficult to give opinions without knowing your time horizons and objectives. So I will talk about myself.

    I agree with AI about drip feeding into a passive fund, though I would NOT put a lumpsum in at the moment – especially if it is a unit trust or OEIC. There is usually between 2 and 4 days between ordering your OEIC/ unit trust and because the market is so volatile at the moment, the price you look at when your order is unlikely to be the same as what your order goes through at. Again this factor will be somewhat offset by longer time horizons (hopefully)

    This week I have bought Linsell Train Global Equity (unit trust) – paying no heed to the advice I just gave above and am already hanging a paper loss. Nevermind because I will start to top up with monthly subs and don’t envisage selling for a long while. In addition, I believe the manager, Nick Train, has one of the closest investor styles to Warren Buffet in the UK. The fund is value orientated so I think it is a bargain at current prices. Had I invested in a growth style fund, I would not be of the same opinion.

    I have also invested in Hansa (investment) trust – HANA. It seems to show consistently good NAV and price performance over a variety of time periods. It is also at a significant discount to the other ITs in its sector – though not at a great discount to its historic ‘average’ discount. I can only surmise that this is because the shares are mostly in the hands of the Saloman family and therefore not as liquid as other ITs. In addition, it has a huge holding in a company called Oceans Wilson which probably scares some people off.

    Cheers
    TMG

    1. @TheMoneyGrower – thanks for your comments. Food for thought. I’ll look into the funds you mentioned as they are new to me.

      I’ve been drip feeding money into the FTSE100, FTSE250 and FTSE All Share ETFs from db-x. What are your thoughts on this strategy?

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