Rushing an Investment Decision

[OLTB]

Morning all.

A few weeks ago I sold an IT in order to top-up TUI as the share price had fallen after the trading update and the yield looked appealing. Since then TUI's price increased somewhat and has now decreased to a point lower than when I topped up.

My learning point from this has been not to rush into buying a share that has fallen as it wont always bounce back up again - my thought was at the time I bought, 'what is the market doing, surely everyone will realise that TUI is worth much more than this current share price and I'd better get in quick before everyone realises'.

I assume that wild swings in market price are the realm of smaller company/AIM stocks as opposed to FTSE100 firms.

Next time, I will top-up when sufficient dividends have accumulated rather than interrupt other portfolios and incur trading costs on the naïve assumption that everyone else is blind and can't they see what a bargain 'this' particular share is.

A humbled OLTB.

[moorfield]

A humbled OLTB.

But did you buy TUI for (speculative) capital gain, or for income ?

If the latter, then you may have noticed that TUI's yield has moved, what, +/- 0.2% since you bought? In a well diversified portfolio that's not too much to fret about at all I would suggest.

I've been watching the TUI share price yield too and am planning to buy some on Monday's cheap dealing day.

[OLTB]

Thanks Moorfield

Yes, it was topped-up for income in my HYP and the difference in income will be negligible. I was just a little cross with myself for incurring trading costs by selling an IT (which I will be re-purchasing again at some point in the future) instead of just waiting for dividends to accumulate and then buying.

I could have found myself in the same position and only paid trading costs once (topping up TUI using accumulated dividends), as opposed to what will be three trading costs (selling the IT, buying TUI, re-purchasing the IT).

[moorfield]

instead of just waiting for dividends to accumulate and then buying.

Yes I find being disciplined while waiting can be difficult. To help with that I have the "cash" cell on my spreadsheet coloured red or green to tell me when I have enough, and usually buy on the following cheap dealing days.

[moorfield]

I was just a little cross with myself for incurring trading costs by selling an IT (which I will be re-purchasing again at some point in the future)

... and of course, this time next year Rodders, when the SP is north of £13 , you won't be cross with yourself at all, eh ?

[Dod101]

I think really what you have learned is surely that it is almost impossible to time the market. On the occasions when we do manage it, we all regard ourselves as being clever but sadly it is usually just luck.

You could also say that it is nearly always dangerous to catch a falling knife, but never mind, I am sure we all do it.

Dod

[monabri]

It's a long wait until the next XD though...one per year and it was 13th Feb just gone.

monabri
"master of grabbing at the falling knife"