Tuesday, 9 February 2016

Heave-To! (Portfolio Sale)

It's been a financial storm out there for DIY Income Investors - but it seems to me that the last thing to do now is run for cover and sell.

When I did my sailing - crewing across, and up-and-down, the Atlantic - I experienced bad weather. When  it gets too bad the final solution is to 'heave-to' and wait out the storm.

'Heaving-to' is an unusual procedure for sailing ships - it involves inverting the jib (the triangular sail at the front) so that it pushes against your mainsail. This manoeuvre gives a surprising degree of stability even in an awful sea. You can go below and let your face recover from the needle-sharp rain and spray.

I've only experienced this once and it was a revelation - a transition from struggling against the sea monster to the relative calm of the main cabin to gather our collective nerve. You just have to trust your boat.

So, for that reason I have been figuratively 'hove-to' for the last couple of months. I'm not checking the prices very often and I've done hardly any new trading - I'm letting the cash build up.

Although it has been a pretty depressing time, there is one crack of light in the gloom: Pan African Resources has shown a pleasing spurt in its share price - which has gone past my indicative 'sell' threshold of 'capital gain = 5 times income'. I bought it in July 2015 and there has been a fast turnaround in the price, primarily due to the increased production and the firming gold price. So, I've sold, netting a 38% profit on the purchase price.

But apart from that, there's not much going on. I'm going back into my cabin now... Good luck!

[Sale price: 13.1p]



  1. Good to hear from you, I thought you had shorted the FSTE100 and was on a Caribbean Island!! I agree with you and have kept my head down just taking up share offers with Tritax Big Box and RPC. If the investment case is still sound why jump ship when probably they will come back when sentiment change though some like Barclays are trying my patient.

    Though the price of some of my investments like iShares plc (IUKD) and Royal Dutch Shell Plc B Shares (RDSB) have fallen quite a bit the dividends keep rolling in, so I hope to be on that Caribbean Island one day but it could be Great Yarmouth seafront with a bag of chips!!

  2. Bbox IPO is a good deal at 124p. 6p targeted income paid for 2015 and share price holding around 130p

  3. Such self-discipline with Pan African! I was feeling less cautious than usual on the day when I bought some, and like you I feel more cheerful as a result. It is showing me just about 61% of profit just now. But I don't seem able to sell it yet. It's that little monkey brain about which you sometimes philosophize. I wonder if I'll manage to bank any of it or if it will all slide down the tube into the Atlantic.. (sorry, that's a bit fanciful).

  4. As mentioned above, at least the dividends keep ticking in - my Shell & BP are hurting if I look at the value, but if i look at the money coming in, nothing has changed, so why worry! Its taken me a while to get this mentality and its still not easy seeing the red, but thinking longer term, I can cope (for now!).
    And for once my own little boast - I also had PAF - I bought in November, and I actually sold half my investment on Friday, for a return of all my original investment, so nicely doubled the money. Shame it wasnt a lot, but these things are more of a gamble, and that will be going into a tracker!

  5. Very intersting analogy. The market is not good for investors and keeping the cool head is hard. A lot of psychology in play. However, I believe, that 2016 will be good and give us a chance for decent returns. The dividend companies are usualy strong and outstanding performers and it's better to keep them, than other, more voltile stocks.