LM portfolio as at 11/11/2022:
| Code | Sector | Date Bought | Cost | Value | Gain/Loss |
|---|---|---|---|---|---|
| LM051 | ETC | 07/11/2022 | £1270 | £1290 | 1.52% |
| LM052 | ETC | 07/11/2022 | £1260 | £1220 | (3.36%) |
The LM fund opened two new positions for the first time in several weeks. Both are commodity plays seeing as the UK stock market is still not moving upwards.
Putting on a new trade reminded me of the initial disappointment when you've finished buying your share and return to the summary screen. Unless you are extraordinarily lucky, with remarkable timing, the first thing that always happens whenever you put a new trade on is that it appears in your broker account at a loss.
Everytime.
Of course it makes sense, you are always going to be at a disadvantage because of the spread.
Your purchase price is always going to be a little higher than the "quoted" price because the latter is always the "mid" price i.e. halfway between the buy and sell price.
Then you have to lump on your transaction costs - currently £12 or so for me as I am anything but a high volume client.
It does make me chuckle when I see the variable fees that brokers quote. If you make more than 100 trades a month then you pay only £8 per trade.
Hmmm, if I get a discount for trading more then let me think... who exactly benefits from my high-frequency trading? In other words, what's in it for the broker?
Trading lots of different positions each month will earn Mr Broker plenty of commission but being constantly in and out of the market is unlikely to help my account.
So after the cost of the spread and then the dealing commission plus sometimes they lump on stamp duty (not sure why) and we're starting off every new position at a loss.
The aim is to give it some time, hope that the red number eventually goes black and then at some point we want to be able to sell it to a greater fool and bank some lovely tax-free profit.
Or, as is more likely at the moment, it slowly drifts down to the 20% stop loss and has to be closed.
Can't win 'em all...
Money
I was bemoaning the fact that I got paid today and there's not much left from my wages.
All the bills are paid, the mortgage is done and dusted for this month and I have no outstanding bills before I next get paid.
Yet all this expenditure on life's essentials means that I've only a little bit of money left in my account.
Then I needed to buy some nursery photos of the youngest - minus £40.
And it's the eldest's birthday soon so I need to get her presents - only there isn't enough in my main current account to cover it.
So what to do?
Credit cards are a no-no.
I've previously explained why I hate credit cards, even "cashback" ones. It's a pain in the frosty to oversee them each month and ensure the balance is cleared so no interest is charged. Certainly not worth the effort for a "reward" of half a percent cashback.
Credit cards purchases aren't real money anyway are they? Just stack it up and worry about it later. Except later soon comes along and I always found myself struggling to pay the balance before I got charged any interest.
Let's face it, whether using credit cards or not you still need cash in the end.
Whatever happens there isn't enough left in the account for the presents she has asked for. And, bless her, she doesn't want too much. She's not greedy, my lovely daughter.
So I ended up using some money I'd squirreled away onto a pre-paid card. I got into the habit of chucking £10 on it every time I get paid so there's a little bit of spending money to use for predicaments like this.
Strange that I find myself irrationally annoyed at having to use these funds. It is my money that I put away over the last few weeks and it's great to have it to hand because it solves little liquidity issues like a loved-one's birthday. Still, it's bothersome to see the 'available amount' value go down.
Yet I really should be happy as this situation is a far-cry from a couple of years ago when I was a little more squeezed for money and often had to use credit cards to bridge the gap. I should be thankful that I can call on my squirrel money - or even the savings account I've built up over the past 18 months or so - to save me from going into debt.
It's a good time to be in the black too. With interest rates rising there are savings accounts out there which pay decent interest rates for the first time in what seems like decades. I pay £50 per month into a Natwest savings account and they pay around 5% interest on balances up to £1,000. Perfect for the emergency fund (the real emergency fund, not the one I can use to buy trainers for my 10 year old!).
From the grand I have in that account I usually get around £4 in interest each month which isn't to be sniffed at.
One issue sorted, next it's Christmas...