Above a You Tube video about the yo-yo.
Stock markets are like yo-yos – they are always going up and down!
Earlier this week on Tuesday, I sold all but 5,137 shares I had in Lloyds Banking Group, thus leaving me with the number of shares I had at just before midnight on Friday 11th July 2003 when Dad died and I became the owner of same. The shares were valued at probate at £3.08 each this being the price of the stock at the close of trading earlier that day. When the probate valuation of these shares was taken into account it resulted in and average cost-per-share of 76 pence. Given that Lloyds would not likely reach 76 pence any time soon, I made the decision to account for the shares differently; I valued the shares at what they had cost me. As a result, I decided that since 5,137 of the 60,600 shares I owned had cost me precisely nothing, I would not sell them! Instead I decided to sell 55,463 of them. These worked out at 54 pence each. I sold at 51 pence each which meant a real world capital loss of £1,663.89. This was £1,663.89 that I had actually spent and now had vanished.
However: The money allowed me to buy 619 shares in Rio Tinto PLC. I put some additional money into the pot and ended up with 666 shares which was all I could afford to spend that day. Between now and the end of February 2022, I will purchase an additional 34 shares bringing the total up to 700 shares. I confidently expect these 700 shares to pay out considerably more by way of dividend that I could possibly have expected from Lloyds Bank! At the moment, the average cost per share taking all buying and selling costs of all the associated transactions works out at £45 per share. Today, the shares closed at £44.245.
Given the expected dividend, I am very happy with paying £45!
At the moment the shares are held in the CREST system via my stockbroker’s nominee company. Following my acquisition of the additional 34 shares I will have the stockbroker transfer the 700 shares out of the CREST system and into certificated form with my name and not the nominee’s name appearing on the share register. You see, I worked for Rio Tinto in the 1970s and as a result the shares are a memory of old times as well as an income source.