This week we suffered another "Black Monday" where the FTSE 100 dropped over 7% in one day. In the US trading was stopped for 15 minutes because the markets were dropping too fast:
Global shares plunge in worst day since financial crisis
And in the UK we've got people panic buying loo roll and dry pasta:
Coronavirus: Can you stop people panic buying?
I like to think of myself as a calm and reasonable person. Hopefully I proved that a little by keeping away from the markets completely on Monday, aside from my usual 5 minute check on my portfolio.
However I did need to do something because my weekend checks had flagged two positions I needed to close. On Tuesday morning I logged in and sold two shares - 3IN and MSLH.
Both had dropped below their 200 day simple moving averages and stayed under there for 3 days. That was all the prompting I needed to sell so they were sold. Waiting until Tuesday meant a slightly higher selling price, which is always nice.
3IN (LM001) was by far my oldest position and at closing it had been open for 638 days! The profit was just under £100 and there were dividends which would boost that a little. Perhaps it hit 10% return overall but without dividends it was around 5%.
MSLH (LM018) was a newish position only opened last November. Lost just over £100 on that one.
On Thursday I got the nod to get rid of another of my trades - LM014. This was an ETF with symbol PHPD: "WisdomTree Physical Palladium".
Palladium has had an extraordinary run up over the last year or so and I managed to collect some of it in my LISA. But the time came to say goodbye so I sold first thing on Thursday with no hesitation.
In an unintended piece of spectacular market timing, I sold the Palladium position just before it dropped 20% in one day. Pure luck that I got out before it crumbled.
Sadly the Palladium trade was the only position that was keeping my portfolio looking reasonably healthy. Now it's gone I have a minus figure at the bottom of the "Gain/Loss" column which isn't pleasant.
Thursday's stockmarket falls eclipsed Monday's after the US decided to stop flights from Europe for 30 days:
Coronavirus: Trump suspends travel from Europe to US
Again the "automatic temporary suspension in trading" was triggered just after the market open. The FTSE 100 lost almost 11% and had its worst day since the "Black Monday" in 1987.
For the few shares I have remaining, the falls have hit them very hard as you an see from this week's figures:
| Code | Sector | Date Bought | Cost | Value | Gain/Loss |
|---|---|---|---|---|---|
| LM009 LM009-2 |
Gas, Water & Multiutilities | 05/02/2019 04/02/2020 |
£2020 | £1900 | (5.91%) |
| LM012 LM012-2 |
Real Estate Investment Trusts | 20/05/2019 28/11/2019 |
£2030 | £2080 | 2.11% |
| LM015 | ETF | 27/08/2019 | £970 | £930 | (3.84%) |
| LM020 | Software & Computer Services | 28/11/2019 | £1010 | £980 | (3.03%) |
| LM022 | Household Goods | 29/01/2020 | £1020 | £670 | (33.64%) |
I've had emails from the Motley Fool and other publishers which offer similar advice about what to do as the market falls - "hold steady and don't rush to sell", "shares usually recover in time" and so on.
Much as that may be true, I can't see the benefit in holding falling shares even if they will likely come back in the future. I'll feel far better selling when my standard rules tell me to sell and then holding the cash. When my standard rules tell me it's a reasonable time to enter the market again I will have available funds to put back into the market.
This could be in a couple of weeks or it could be in 2025 but I won't know until it happens.
We could see the FTSE 100 half in the next few years. It has happened before. Check the high of 2000 compared with the low of 2003.
Whilst I sold 3IN, MSLH and PHPD this week there's always the possibility that I will re-add them to the portfolio over the next couple of years.
The important point being I'd rather buy them again when they are showing signs of growth.
For me that's far more preferable than holding them whilst they are showing red values in the "Gain/Loss" column.
I'm fully aware I may miss out on gains by doing this but I will feel better not seeing huge losses week after week.