Following yesterday’s events, I approached my computer keyboard and mouse this morning with a certain amount of reflection. As I “clicked” to access “Google Finance” to show the (more or less) live stock prices of my selected stocks, I was wondering would I see red or green! It was with a certain amount of quiet relief that the red arrows were pointing downwards thus indicating the price I got yesterday was a lot higher than the price today. Of course, the investment trust shares were down the same – but by slightly less!
Of course, nothing had fundamentally changed in either company. What had changed was “market sentiment”. This is the nature of stock-markets. It is a nature that has to be contended with when people are dealing with life changing or life significant amounts of money.
What I did yesterday is something many people do every day the stock-market is trading: Purchase and/or sell stock that represents to them an income source – which in the case of those over the age of 65, often as not comprised the bulk or a significant amount of the source of their total income.
There is of course an old and wise saying: “Do NOT gamble with money you cannot comfortably afford to loose!”
The gamble I decided not to take yesterday was to let the situation continue and wait for the dividend announcement from Shell on Thursday 3rd February 2022 – one week after I made the trades.
It is expected (by “the market”) that Shell will announce an uplift in the dividend to shareholders – of which I am still one (albeit with just 1% of what I held when I got up yesterday). It may well be the case that my friends will advise me that I sold out too soon; that I should have taken the advice of the saying, “the stock-market” rewards patience”. As I is I effectively have locked into a dividend income that will only be marginally greater than I would have received had Shell continued paying dividends at the level it had done so in the last 12 months.
It will therefore be interesting to see what Shell announces. Shell have already announced that in deciding to increase the returns to it’s shareholders will do so in two ways:
#1: Increase the cash dividend.
#2: Continue with the policy of “buy-backs”. This is where a company buys it’s own shares which if those shares are cancelled acts as a ton-tine insofar as the companies assets are concerned: the same assets are shared by a smaller number of shareholders.
Of course it is no good crying over spilt milk. What is done is done. The FACT is that I have placed a significant part of my personal wealth in a safer and less volatile place. One factor I took into consideration yesterday was the whole nonsense of “Anthropogenic Global Warming”. You see, Shell’s CEO Ben van Beurden is a very clever, very experienced and very sensible fellow. He is not the sort of chape to get up one morning, go to the office and do something completely reckless. And yet this is the man who is in charge of a policy of progressively asset striping the company of which I am still (at the time of writing) a shareholder in order to change it’s complete focus from getting what are now derisively called “fossil fuels” out of the ground to what is called “renewable and low carbon energy provision”. The world has apparently gone mad! And yet I am very very confident that Mr van Beurden is NOT mad, but completely sane.
Something VERY STRANGE is clearly going on!
And we the General Public do not know what that something is and our rulers have NO intention of telling us!
So that is why I bailed out yesterday!
NB: The whole idea of an investment trust is to spread risk and thereby reduce risk. Unless you are of the net worth of some of Boris’s friends and benefactors, vehicles such as unit trusts and investment trusts are the sensible places for ordinary people to invest in the stock market.