To sum up the last week living and breathing stock investment in one word, I would use “wow”. I have been investing for the last 3/4 years, and I still consider myself a newbie. I am sure that even the professional investors didn’t expect the market’s recent reactions, let alone what happened in the last week.
Although everyone keeps saying that the stock market is forward-facing, I can’t make sense of the sharp recovery looking at the economy. One part of my brain is jumping for joy, and the other part is getting ready for the next crash.
The UK market was up by 5.5% over the past 7 days while the banks were up by 15.6%. My portfolios outperformed the market and were up an average of 8.7%. Yess! 🏆🏆🏆
|7-Day Return||1-Year Total Return||PE Ratio|
|United States Market||3.8%||12.1%||16.9x|
|UK Banks||15.6% 🤑||-32.8%||6.1x|
- On Thursday, the ECB unveiled another €600bn bond purchase to help the eurozone economy through its worst crisis in decades. It will take the total amount of €1.35tn of different financial measures to stabilise the economy. However, many financial institutes believe that this won’t be enough and the ECB would need to inject more money in the fourth quarter.
- On Friday, the stock market had an expected surprise. The US job market unexpectedly reversed its free fall in May as employers brought back millions of workers after pandemic-induced layoffs. According to the Labor Department, the employers added 2.5 million jobs in May. As a result, the NASDAQ reached an all-time record high. FTSE 100 rose 7% last week while CAC 40 and DAX 30 jumped 9% and 10% respectively.
- In the UK on Friday, the Chancellor of the Exchequer postponed a major stimulus package of tax cuts and spending pledges until the autumn to see how the economy fares before making further commitments. He has already spent £133bn since the pandemic started. I fear that the market will respond negatively to the news on Monday.
- The government also declared that they would end the furlough scheme at the end of October. Businesses are still struggling to open, and it would take months if not years to return to normal. I am worried that bosses will cut hundreds of jobs to keep business running and the job market might be a total disaster once the government money stops flowing. I read the government is easing the lockdown further to reopen the economy to save 3.5 million hospitality jobs.
- I didn’t research ZoomInfo yet (and I don’t think I will), but I have a feeling that we are going to see another dotcom bubble again. We saw many business directories going bust in the past, yet another directory saw IPO at $21 a share and ended at 62% on its first trading day. This rise gave the company a value of an astronomical $13 billion while it’s Trailing 12 Months (TTM) revenue was just $350 million!
- Facebook-owned WhatsApp and PayPal on Wednesday said they have invested in Indonesian payment, food delivery and ride-hailing app operator Gojek as part of its latest ongoing fundraising round. Facebook now owns a 2.4% stake in Gojek’s GoPay fintech arm, while PayPal owns 0.6% of GoPay. Facebook is busy investing in different business ventures every week.
Main Portfolios Summary
My main portfolio, hosted on IG.com was up by 8.8%, while the SIPP portfolio was 6% last week. They are still recovering from COVID-19 damages. 🙏🙏🙏
- Only a few of my holdings were negative last week. It was very disappointing to see Plus500 (LON:PLUS) dropping more than 12%. I have been a big fan of Plus500 so far and talked about it highly in my previous posts. It is a very highly profitable online business that hasn’t been affected by the pandemic. But after seeing the drop every day last week, I started wondering whether it has reached the top valuation already.
- GlaxoSmithKline (LON:GSK) was another one which dropped last week in a week almost everything was up in the world 🙁 But with a solid balance sheet and strong dividend, nobody should be worried about GSK 🙏. On the other hand, AstraZeneca (LON:AZN) became the most valuable company on the London Stock Exchange, and it has only a dividend yield of 2.61%.
- EasyJet (LON:EZJ) was the top performer and jumped more than 31% in the last week. It was an amazing week for all airlines, anyway. IAG, Ryanair, and Wizz Air all were up by 35.5%, 11% and 9% respectively. BA owner IAG didn’t attend a meeting between the Home Secretary and the travel industry to discuss the UK’s coronavirus quarantine plans and threaten to take the government to court over its 14-day lockdown rule. In a statement, company CEO Willie Walsh said that British Airways flew only 485 passenger flights last month. Shocking! I have a feeling that the government will change the quarantine plan soon, as it is facing immense pressure from its own party, travel and hospitality industry.
- As mentioned before, both of my banking stocks, Lloyds (LON:LLOY) and Metro Bank (LON:MTRO) performed well and were up by 18% and 13% respectively. Unfortunately, I am still miles away from total recovery. So, let’s not get too comfortable.
- It was a better week for EVRAZ (LON:EVR) than other mining companies at the LSE. It was up by more than 11% while others were between 4% to 9%. It was affected highly due to the pandemic and financial issues. In the last 6 months, It has dropped 13% while Rio Tinto (LON:RIO) is up by 7%! As mentioned in my previous articles, it would drop again when it cancels or reduces its monstrous dividend payouts.
- Aerospace and defence equipment manufacturer Meggitt (LON:MGGT) is set to be demoted from the FTSE 100 index. It was a moderate performer with an 8% increase in a week when others were up by 30% or more. Its full coronavirus recovery won’t be anytime soon as the governments are busy defending the economy, no time to look at the outsiders.
- A piece of good news came last night that Russian and the OPEC allies have agreed to extend the oil production cuts until the end of July. We might see the Brent Crude price go above $45 a barrel soon. I am expecting a jump from BP (LON:BP) and Royal Dutch Shell (LON:RDSB) tomorrow.
Freetrade Portfolio Summary
My Freetrade portfolio performed even better than the previous two portfolios. It was up by 8.8% week-on-week and is currently sitting at an incredible 12% profit. While travel and hospitality stocks were flying, the tech stocks like Microsoft, Apple and Amazon were sluggish. Otherwise, my tech-focus Freetrade portfolio would have performed better.
- On Monday, I sold Gilead at a breakeven price because I had a feeling that its share price will drop as the latest reports were not as positive as the market expected. It dropped the first three days of the week and recovered on Friday. Anyway, I bought Cloudflare (NYSE:NET) using the capital. It is a Content Delivery Network (CDN) provider which helps other companies to serve their customers faster and protects from DDoS attacks. Amazon and Microsoft also provide CDN services, but Cloudflare uses a different methodology. As we are working more and more remotely, we will need more server powers. I use Cloudflare for my clients’ websites, and I am happy to invest in the company. Trust in a company and its products is important for a successful investment.
- Then I sold my WPP (LON:WPP) holdings at a 21% profit and bought Playtech (LON:PTEC) on 3rd June. Looking at the numbers, I feel that it was a good decision. WPP share price was up by 4% while Playtech soared to 10% since the transactions took place. Sweet!
- The gold price was low last week, and my Highland Gold Mining (LON:HGM) was in the negative – I was down by 7%. Looking at the oil price rising, I sold my Highland Gold Mining and bought ConocoPhilips (NYSE:COP) stocks on Friday evening. It was up 1% for me before the market closed. But again, Monday will be a better day. More good timing!
- Brickmaker Ibstock (LON:IBST) is planning to cut 15% of its workforce. Around 375 jobs are at risk according to its last trading update on Wednesday. It was up more than 13% and pushed me into positive territory. I might consider selling the holding to invest in a quicker return, then I might reinvest in the company again.
- I am in the red for both Pfizer (NYSE:PFE) and IBM (NYSE:IBM). I was very close to selling Pfizer last week, but let’s see what happens this week. However, I probably will keep IBM as it has a high dividend yield of 4.94% annually this is higher than the market and its peers.
Trading212 Portfolio Summary
I have been against making any erratic decisions, and I still believe it’s wrong to play with large sums of money. That’s why I kept my large portfolios and positions untouched for months, if not years.
So I decided to play with my tiny holdings. Last week I sold two positions of Aston Martin (LSE:AML) and Carnival (LON:CCL) for huge profits, and made a few quick buys and sells. In the end, I bought United Airlines (NYSE:UAL) on Friday. It is already 9% up for me after the midday purchase.
My less-than-two-weeks-old Trading212 portfolio is currently at 9% profit. 🙏🙏🙏
By the way, I am happier using Trading212, and already planning to invest more in Trading212 than the Freetrade app. I will keep shuffling my positions in the Freetrade app while adding new positions in the Trading212.
Having a website is one of T212’s biggest advantages I can see at the moment. The Freetrade app is good and simple, but it is also annoying to use mobile as we are using computers a lot lately. I am planning to write an article comparing both platforms in the coming days.
Trying Different Trading Platforms
I am using both Trading212 and Freetrade platforms for zero-free transactions. Both of them have their own pros and cons, it depends on personal requirements, to be honest. Why don’t you try both platforms and get two free shares from two platforms? You can use my referral Freetrade and Trading212 links, and get shares worth up to hundreds of pounds. 🤞
I have already received eleven free shares; ten from Freetrade and one from Trading212.
Next Week’s Dividend Payments
I have been investing in dividend-focused portfolios for my financial freedom and ultimately my retirement. Here is a list of companies that will be paying dividends next week. Although my IBM position is struggling, and currently has about 9% loss, it offers a high dividend payout. So I am keeping it, and would look to increase my position in future.
|Company||Payment Date||Div Type||Div Yield||Div Amount|
|IBM (NYSE:IBM)||Wed 10 Jun||Quarterly||5.06%||163c|
|Microsoft (NYSE:MSFT)||Thu 11 Jun||Quarterly||1.12%||51c|
The Week Ahead
I will be following this list of reports taking place next week. For more information, check out the London Stock Exchange, NASDAQ, and other stock exchange websites.
|Full-Year Earnings||Half/Quarterly Earnings||Trading Update|
|Tue 9 Jun||Aveva||British American Tobacco, Bellway|
|Thu 11 Jun||Fuller, Johnson Matthey||Adobe|
The stock market is enjoying an amazing ride. If you are here for a quick joyride, please think carefully about your exit strategy. If you are here for long term investment, I hope you are investing sensibly. It’s not all it seems, and a profit is not a profit until it is in your bank.