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Weekend reading: FTSE 100 more attractive now

Blog posts of note this week

Just a few links this week due to “events dear boy, events”. Specifically, I’m doubled up in bed with back pain and have just managed to get up long enough to add FT links to this article I wrote yesterday night, and to hit publish!

What a week! I assumed that by today I’d be sharing where I’d decided to deploy the cash I liberated by selling some shares a month or so ago.

As it’s turned out, I’ve been putting it back into the market!

Okay, not all of it. But with the markets plunging on Greek fears and the UK in political deadlock, I couldn’t resist buying Lloyds, for instance. (I’ll post why next week).

I’ve also rejigged some ISA holdings, swapping illiquid small caps that had held their value for much-reduced blue chips with diversified global earnings. At some point, I expect to swap back – either because the small caps I sold eventually fall too, or because the blue chips rally.

Note: Most of my portfolio has and will remain untouched. This includes my long-term Legal and General trackers, which I only rebalance occasionally.

A reader asked me yesterday why I warn against trading and market timing, given that I cashed in nearly a quarter of my portfolio five or six weeks ago, pretty much hitting the recent high. She also cited my article on the day of last year’s March lows (not surprising she’d seen it, given how often I link to it! 😉 ).

There are a number of reasons.

Firstly, my recent sale before the fall was sheer luck. I believe most short-term moves are luck.

I’m no genius, let’s be clear. It’s one thing to add to or trim back a trading portfolio, according to how expensive particular holdings are looking, or to seek diversification. But going wholly in and out of cash is very different, and I am certain it would lose me money over the long-term as I failed to capture enough of the advances.

Secondly, as a blogger I’m now giving my views every week. Some are bound to be right!

If shares hadn’t rallied last March, I’d probably have thought they were even cheaper in April – and I would have said so. Eventually I’d be right.

Don’t get me wrong – I write my posts honestly, thoughtfully, and with the best of intentions.

But I’d suggest you beware of me or anyone else claiming to consistently call the top and bottom of markets. Do it six or seven times in a row starting with just £25,000 and you’d probably be a millionaire.

I’ve never heard of anyone who made a million that way. I doubt I ever will.

Guaranteed election-free blog posts

Other financial articles

  • Defensive large caps offer timely income – FT
  • Cash, coins and equities – FT

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{ 11 comments… add one }
  • 1 RetirementInvestingToday May 8, 2010, 7:49 pm

    Thanks for the mention TI and hoping the back recovers soon.
    .-= RetirementInvestingToday on: The numbers just roll so easily off the tongue =-.

  • 2 Financial Samurai May 8, 2010, 10:12 pm

    Mate, first of all, it’s OK to be a genius! Most people are geniuses online, so embrace your brilliance!

    Second, here is my gift to you. And please, please take my advice: BUY “Healing Back Pain” by Dr. Sarno. Please order it now on Amazon. I promise you, within two months after you read it, you will no longer have pain.

    In fact, I did a review of it on my site a looong time ago. It changed my life FOREVER!

    Best,

    Sam
    .-= Financial Samurai on: The White Cloud of Happiness =-.

  • 3 The Investor May 9, 2010, 9:50 am

    @Sam – I wish I could tell you I hadn’t read Sarno because I love giving him to people too! I’m a convert but I let it slide / allowed some other stuff to build up on me. Spent last night reading my 1991 and racking brains. No cure yet (updating via iPhone in bed) but I fully expect it. 🙂

  • 4 Faustus May 9, 2010, 4:09 pm

    Ouch – hope you are back on your feet soon. You’ve certainly made some great calls recently!

    Disturbingly sharp falls in the markets, and not just in the UK but worldwide. While the FTSE is touching its Feb lows, it seems Chinese and many European markets are approaching lows last seen last September. Unfortunately the weak pound takes the edge off the attractiveness of investing overseas. I was irritated not to have invested in Feb, but just goes to show that when investing patience is a virtue.

    I suspect the UK market will remain choppy for some time, but agree that some of the blue-chip yields do now look very tasty.

  • 5 Financial Samurai May 9, 2010, 4:55 pm

    Oh no! You HAVE read Sarno! Well, read it again and just be mindful of the things stressing you out!

    Perhaps the markets are affecting you more than you thought? Regardless, all will be OK. I’ve found a solution to all my fellow European problems… which I will post on Monday 🙂

    It’s not something new, but I have to agree with the happy-spending Greek… it SHOULD BE DONE!! You’ll see what I mean.

    Best,

    Sam
    .-= Financial Samurai on: The Dark Side Of Early Retirement =-.

  • 6 The Investor May 9, 2010, 6:11 pm

    Pretty sure it’s not the markets, but thanks Sam. I am pretty sure it’s to do with my ageing parents and possibly my ex.

    Also, I read Sarno in 98. Over the years I’ve allowed various ailments to seem ‘real’ and forgot the emotion angle.

    Beware your ‘numb bum’ you mention in your review. It could be the start of a pushback.

  • 7 The Investor May 9, 2010, 6:13 pm

    @Faustus – Thanks. Personally I think currency is the main issue when investing overseas in other developed markets. Remember a weaker euro will at least help euro exporters, though like you I prefer to buy overseas when my home currency is strong.

  • 8 Niklas Smith May 9, 2010, 8:59 pm

    I know exactly how you feel – I had awful back pains that immobilised me for days a couple of years ago. The only cure is rest – trying to get going again too quickly simply brings it back.

    Get well soon!

  • 9 Financial Samurai May 9, 2010, 9:04 pm

    I haven’t felt any numbness or back pain in the past 6 years. It’s been an incredible transformation and I have Dr. Sarno to thank.

    Get well, and hope you find another woman!
    .-= Financial Samurai on: The White Cloud of Happiness =-.

  • 10 Little Miss Random May 10, 2010, 12:35 pm

    Hi there,

    I’ve been reading your site for a few months now as I just started investing properly last summer. I’ve popped out of lurkerdom to wish you all the best with the back. I have back pain too (might take a look at the Sarno book that a couple of you have referenced), and the days it’s bad, it’s killer.

    Get well soon!

  • 11 The Investor May 10, 2010, 1:43 pm

    @LMR and @Niklas – Thanks for your thoughts, I’m still in bed but moving about a lot more. 🙂

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