Share and share alike half-breed

I haven’t written very much about shares and investments so far but it is looking like things are on the up at last. House prices are reported to have increased 8.5% over the last 6 months which is mammoth, 17% a year on average. Shares (ftse100) have increased more than ever before over the last three months. In fact I was able to offload my Rexam shares on Friday with a tiny profit, the first time I have been able to since they dropped like a stone. They peaked at the highest point since July but I couldn’t offload them then as my average share price was higher. A month or two ago, Rexam offered some cheap options to shareholders where they could buy 4 cheap shares for every 11 owned. As they were reduced by 50% it seemed like a bargain and would only fail if the marked dropped still further. The offer was scheduled to start the following day and close about a week later where they could be sold again. It seemed worthwhile to me because it should reduce my average share cost and enables me to get out sooner than otherwise without loss. It also showed an opportunity to buy some more, in Claire’s name before the offer started the following day. I quickly transferred some money into Claire’s account and bought as many Rexam shares as I could. The options were offered to her the following day so I bought those as well. The following week when I sold Claire’s shares (shares and options) she realized about £1500 profit, not bad for a week’s work and a slight risk. It’s a shame that mine weren’t so profitable but at least I have now got out much sooner than I would have done otherwise and now I can use that money to buy shares when they are low again and take advantage of their normal cycles. Unfortunately, I still have shares in a couple of banks that will take years rather than months to get rid of without consolidating a loss. I bought them after the first bank crash but before the second. If I had the forethought to wait until the bottom of the second I would have doubled my money by now but who knows, there may have been a third?

I didn’t think that the house price crash would last too long as the forecast for people requiring a house over the next 5 years by far outstrips availability. I was actually surprised at the extent that they did drop but my guess is that they are now on the road to a quick recovery. However, there are not enough houses on the market to supply the people looking at the moment which is why they are on the increase. I was talking to an estate agent yesterday (Adam from Taylors) and he was saying that it is the best housing climate that he has ever known and that each salesperson (pc) is averaging four house sales a week. When it was at its lowest a year or so ago they were averaging less than one a week, which is why more than half the local agents disappeared. Also different areas have been affected in different ways as we saw when Claire and I visited Kent (Margate, Broadstairs and Ramsgate) a couple of months ago. There are so many houses for sale there compared to here and we saw some massive bargains but, in the end, decided to stay with what we know best the MK area.

One financial area that is not on the mend is the average company and redundancies are still on the increase. Apparently this is quite normal and usually the last part of the equation to recover; there always seems to be a lag behind everything else. It’s a bit of a puzzle to me because if some companies are struggling and still making redundancies, how come the ftse100 share index is doing better than it ever has before? Maybe because it had dropped so low that the first part of recovery is very fast and it will slow down again. Anyway, although confidence is a lot higher than 1 year ago it still seems very fragile and there must be a strong possibility of a double dip. What if we have another horrendous terrorist attack, which would be devastating for a recovering economy and could easily tip the balance? I would say that our chances of another attack increase daily as we must be the weakest of all nations in controlling immigration. Right now we have a huge influx of people from Afghanistan coming into the country. Bizarre, the very place we are fighting against to slow down terrorism are sneaking in through the back door legally while we are still in conflict. Imagine what the consequences could have been if Churchill had done the same thing with the Germans during the Second World War. Well, I suppose my Father wouldn’t have been here, met my Mum and produced this fine half-breed.