LM portfolio as at 28/01/2022:
| Code | Sector | Date Bought | Cost | Value | Gain/Loss |
|---|---|---|---|---|---|
| LM028 LM028-2 |
'No specific industry' | 16/11/2020 10/08/2021 |
£2280 | £2660 | 16.73% |
| LM038 LM038-2 |
Banks | 10/03/2021 04/01/2022 |
£2290 | £2590 | 12.87% |
| LM039 | Pharmaceuticals & Biotechnology | 30/03/2021 | £1030 | £1150 | 12.19% |
| LM040 LM040-2 |
General Financial | 27/04/2021 22/11/2021 |
£2290 | £2980 | 29.73% |
| LM041 | Real Estate Investment Trusts | 27/07/2021 | £1270 | £1340 | 5.65% |
| LM042 | Construction & Materials | 27/07/2021 | £1270 | £1270 | 0.24% |
| LM045 | Gas, Water & Multiutilities | 06/12/2021 | £1280 | £1250 | (2.33%) |
| LM047 | ETC | 17/01/2022 | £1270 | £1300 | 2.35% |
Fair to say it has been a bit of a struggle for UK markets over the last couple of weeks, reflected in the very short list of new 52 week highs.
Following the market close on Friday 21st January there were only 11 and then on the 28th there were 20 (although half of those were shares with 0 volume).
On the flip-side there were dozens of new 52 week lows both weeks.
Is this a sure-sign that the markets are turning bearish?
Well, no. But it's not an indication of strength either.
The FTSE 250 has certainly been weaker, with its price being below the 200 day simple moving average for several days. The status of that indicator means I will be holding off from buying any new share investments for now. Once I see it has established itself above the 200 day SMA again I will feel far more comfortable taking on new positions.
Since the last update I have sold one share and opened a new commodity position. The sale was of LM037 - two units of STJ (St James's Place PLC) - and I closed if off last Thursday as the price had slipped under that special 200 day SMA and stayed there for 3 days. A small profit was made on that purchase although I did hold it for nearly a year.
There was also a new ETC position - LM047 - bought using the standard rules (40 day highest high).
Several of the latest updates on this site have concentrated on THG and its price action. On the 16th January I mentioned that The Hut Group was going to issue a trading update on Tuesday 18th January 2022 and that I was definitely happier to be out of that particular trade when there was news on the horizon.
As it turns out I called it very well (shame that couldn't be said for the ill-fated THG purchase - LM046 - that I made).
Once again "the market" did not like THG's announcement and the share price fell 10% on the day. Then, during general stockmarket weakness, THG fell another 18.7% on Monday 24th January 2022 to an all-time low of 121.3p. Considering this IPOd at 500p and then rose to nearly 840p, it is currently at a level that few would ever have predicted.
My THG loss certainly doesn't look too bad in the grand scheme of things. It's a long road to profit now for pretty much everyone who owns this share and it certainly isn't guaranteed, no matter how long they hold it.
With markets looking a little weak it's frustrating to sit with money available but nothing to buy. Whilst commodity ETCs provide several markets to trade when equities are not rising, it pays to remember that there will be plenty of opportunity to buy shares in the future. The stock market will still be there.
I will sit on the remaining shares in the portfolio and continue to give them a glance once a day. On the weekends there is a bigger study of the price movements and it is at this point that decisions are typically made on when to cut a position.
Here's what I'm thinking:
In a worse-case scenario I don't buy anything until the FTSE 250 goes back over the 200 day SMA and before I can do anything the market suddenly turns and powers upwards. I miss out on massive returns and I am very annoyed with myself. This could happen but it's not very likely.
Best-case scenario is that the market turns around and begins to slowly amble upwards again, giving me time to start to add new shares to the LM fund.
It won't be the end of the world if we see a downturn.
Should that happen then I will repeat what I did during the COVID panic of 2020 - gradually sell my holdings off as they give sell signals and keep all of the freed funds in cash until things improve.
There is no forcing the market and, as I have said before, stock markets are designed to go up. In the future they will go up again. Losing lots of money trying to guess where the bottom is would not be beneficial so I will sit this out for the moment.