140 and out

Vodafone crawled up to 140p yesterday and I sold. I now have the pleasant task of allocating the capital made available. The current plan is to invest half the capital in eBay and split the other half between Barclays and Big Yellow Group. Having sold VOD I currently have no investment in UK companies apart from some Vodafone shares in my son’s college fund. This is not a healthy situation in light of the continuing dollar weakness so I will resist the temptation to put all the money in attractive US companies.

The Barclays share price has plummeted recently, creating a buying opportunity. The P/E is currently at 11 and the yield is over 4%. This seems like good value for a company with reasonably growth prospects and some takeover prospects. I don’t expect great things for the share price but they should provide a solid backbone to what is becoming an aggressive portfolio.

My Sharebuilder account will invest £500 in BYG in a few days. I will put another £500 in from the VOD sale and then use the account to buy into Barclays. The problem with the Sharebuilder concept is that if you are regularly investing small sums into a company and the share price rockets (or plummets) after only a few months and you need to sell, then the selling fee will be a huge percentage of the transaction. Halifax does mitigate this slightly by only charging £5 when you sell less than £250 worth of share. However to avoid having to sell small bundles of shares, if I am going to invest small amounts on a monthly basis I only buy into large, low risk companies where I know I can keep buying for at least a year and nothing catastrophic is likely to happen. If I want to buy a more risky stock like an airline I buy a big chunk all at once.