BP and Severn Trent/Imperial Tobacco update

Hi all,

Although I don`t generally do this, I have resorted to some short term trading in BP, to bring my average buy price down. I sold some of my £4.22 holdings for break even a few weeks ago and have now just re - bought at £3.79. So I have 2 lots under £4 but offset against the ones I bought at £5.68 and £5, my average is £4.30. Although this was not the original plan, I am happy to hold BP for the long term at that price, looking for £5 again next year.

Severn Trent is now £12.85, from £13.41 when I sold. I am very happy I took some profits in the Portfolio. Never be scared to take profits, even on a good asset such as Severn Trent. Imperial Tobacco look good value and holding above the £18 support line currently, even as the market falls. A very good defensive asset to hold in times like these.


The world markets are very weak at the moment, as fears of a double dip continue to persist. My view is that equities, especially high yield ones look too cheap relative to other assets such as govt bonds, cash or property. Even with a double dip scenario, I think defensive companies such as GlaxoSmithline, AstraZeneca and National Grid with yields of 5-6.5% will outperform cash(with rates unlikely to go up anytime soon)

Just make sure you have a diversified Portfolio and "hold at least your age in cash". That is the absolute minimum weighting I would have in cash because you never know what black swan event is round the corner. Then if the market tanks further from here, I you will have cash remaining to buy into further weakness and average down your holdings for the long term.