Citywire printed articles sponsored by:
View the article online at http://citywire.co.uk/money/article/a699584
Diary of a Dumb Investor: failing investment trust overboard!
I'm selling one of my holdings. But it isn't my plummeting AIM stock.
If Aurum – the AIM-listed mining share that has plummeted – is a gaping hole in the side of Good Ship DI, then Personal Assets Trust is my rusting anchor, stuck fast.
Down 2% compared to Aurum (AURU.L)’s 45%, this investment trust seems to be wasting space in my portfolio. It sits their haughtily with its defensive sensibilities, looking down on the rest of my less conservative, more flighty holdings.
PAT is designed for very cautious investors. I probably wouldn’t count myself among them. It does (should) however serve a purpose in my portfolio, as a supposed defensive stalwart when markets go down.
Looking over the past three years it has clearly been less volatile than the FTSE World index (against which Citywire benchmarks PAT) but nor has it done as well: I'd rather have a wiggly line striving higher than a straight one just sort of hanging there. I’m just not sure PAT is as good as everyone says.
With such a minor loss, I’m tempted to sell now – to call it quits while my losses would be meagre.
I’d even be inclined to buy another ‘defensive’ investment if one came along that worked. After all, if I sell PAT I lose my anchor just as markets look fragile ahead of a potential military strike against Syria or more volatility caused by the so-called ‘taper tantrum’.
And I’m left with even more cash – which, yes, I am looking to spend imminently – just as Bank of England governor Mark Carney pledges to keep bank rates low forever (albeit with ‘tremendous sympathy’ for savers).
I have however decided to hold onto my other loser, Aurum. As several readers commented on my last article, the shares have fallen so far that I may as well cling on. It’s even perked up a bit in the past week or so (click on my portfolio below). I could yet be onto a winner here…
My portfolio: Click to enlarge
More about this:
Look up the shares
Look up the investment trusts
More from us
- Carney eases rules on banks, defends jobs link to rates
- Diary of a Dumb Investor: Help! My shares are down 60%
Tools from Citywire Money
From the Forums
Weekly email from The Lolly
Get simple, easy ways to make more from your money. Just enter your email address below
An error occured while subscribing your email. Please try again later.
Thank you for registering for your weekly newsletter from The Lolly.
Keep an eye out for us in your inbox, and please add firstname.lastname@example.org to your safe senders list so we don't get junked.