Don’t get sucked in by the New Year tips

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Don’t get sucked in by the New Year tips

Whatever you do, please do not get sucked into any of the media ‘end-of-the-year’ share tips – unless you have taken a good look at the company concerned and it fits in with your portfolio criteria.

The New Year Tips Season has historically been notorious for fast rises and rapid falls in share prices.

Yo-yo pricing

Up and down, down and up. The market’s description of such movers is so often proved correct.

Within days the buying euphoria peters out and profit-taking sets in to pull valuations back down again.

Re-check your current positions

However, if the companies mentioned do fit in with your normal investment limits, then I would suggest that you put them on your personal ‘watch lists’ – that you assess what price you feel that you should be paying and use that as your ‘signal reaction’ when it comes into range.

Then assess how much of your available funds might be right to put into this new situation.

Would you buy them again today?

Also take time to renew your enthusiasm for various of your current portfolio stocks – question yourself whether you would buy that stock today if it was a newly presented situation.

Check out recent results announcements, check out any investment press mentions, find out what brokers are looking for going forward.

Are the price earnings ratios, the dividend yields, the corporate borrowings and the net assets of the selected company over-rated – does it offer both value and capital upside?

As for those you wouldn’t buy again

For those ‘doubtful’ stocks – put them on your early disposal list for when fresh selections need funding.
Having done your homework on new selections and also having prepared your disposal list – you can now enjoy watching the market gyrations until your ‘signals’ are identified, and then you pounce!

But whatever you do

So, to recap – don’t get ‘suckered in’ – maintain your portfolio dignity by keeping to your own set of investment standards.


Comments (1)

  • John Chinery says:

    I find rather than maintaining a disposal list that placing a “Limit to Sell” on all the shares where I want an out is a good approach. I am gratified quite a number of my holdings are 2022 tips. But rather than being self congratulatory, those are where I plan to “pounce” and sell into the temporary bullishness.

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