Most of the banking stocks up around 50% over the last year - are they worth continuing to hold? Presumably interest rate rises will have an effect....
I don't think interest rates have much to do with the value of banking stocks tbh.
Was always led to believe profit margins were better as rates rose - possibly a myth.
You're quite right, interest rates have a huge effect on banking stocks.
As they go up, they can make wider interest margins between what they borrow and lend, which boosts net interest margin (NIM), one of the most important valuation metrics for a bank. The reason they are struggling to make money is that NIMs have been narrow for so long, they struggle to cover operating costs and credit risk and still make a profit.
Yup. And, as far as I know, not one major bank or building society has yet raised its savings rates in response to the last interest rate rise even though their mortgage rates were put up straight away!
As always. More predictable than us losing to the Spanners
Most of the banking stocks up around 50% over the last year - are they worth continuing to hold? Presumably interest rate rises will have an effect....
I don't think interest rates have much to do with the value of banking stocks tbh.
Was always led to believe profit margins were better as rates rose - possibly a myth.
You're quite right, interest rates have a huge effect on banking stocks.
As they go up, they can make wider interest margins between what they borrow and lend, which boosts net interest margin (NIM), one of the most important valuation metrics for a bank. The reason they are struggling to make money is that NIMs have been narrow for so long, they struggle to cover operating costs and credit risk and still make a profit.
Think I'll hang onto my Lloyds shares for now.
Cashed in my Barclays shares this week. Kept my Lloyds in the vain hope they'll carry on upwards.
Most of the banking stocks up around 50% over the last year - are they worth continuing to hold? Presumably interest rate rises will have an effect....
I don't think interest rates have much to do with the value of banking stocks tbh.
Was always led to believe profit margins were better as rates rose - possibly a myth.
You're quite right, interest rates have a huge effect on banking stocks.
As they go up, they can make wider interest margins between what they borrow and lend, which boosts net interest margin (NIM), one of the most important valuation metrics for a bank. The reason they are struggling to make money is that NIMs have been narrow for so long, they struggle to cover operating costs and credit risk and still make a profit.
Can one of you guys who work in the City tell me what on earth is going on with the Experian share price? Huge falls for the last few days, down 10% this week and all for no reason that I can see.
It's a company share repurchase programme - commenced on 1 January and ends today.
Down another 76p today despite some really good results being announced. Down 15% now in about a week.
Tech stocks have had a disastrous start to the year and it's continuing. I am a bit too heavy in this area, mainly US but also via Baillie Gifford, so I've seen my profits reducing in the past few weeks. I've held in anticipation of an upturn at some point and there's no point selling low.
Annoyingly I was about to take some profit on my largest tech holding just as the market started to go down but the downward trend started literally on the day I put my sell order in and has just continued downwards ever since.
Tech stocks have had a disastrous start to the year and it's continuing. I am a bit too heavy in this area, mainly US but also via Baillie Gifford, so I've seen my profits reducing in the past few weeks. I've held in anticipation of an upturn at some point and there's no point selling low.
Annoyingly I was about to take some profit on my largest tech holding just as the market started to go down but the downward trend started literally on the day I put my sell order in and has just continued downwards ever since.
Hitting my pension funds - hopefully the selling stops at some point.
With further inflation and rate hikes expected, it really isn't going to be a pretty year for markets (esp growth). Most BG funds are down very heavily over the past 3/6 months performance.
I started selling off some tech several months ago, mainly because I realised that I had too much tech, hidden in general growth funds. The thing is that at the time the prices were at more or less the prices they are today, after the sell off. They will come back again. Just be aware that if you hold growth funds, you hold a lot of tech. And as always, if you sell, you need to have a plan for what you are going to do with the money. Cash is not the answer, now more than ever. I dumped most of the money ina very conservative Vanguard fund, but that’s because I am retired and need to protect what I have.
@PragueAddick. You do mention that cash is not the answer often. I think if investors are concerned about their exposure to markets, then there is nothing wrong with them increasing their weighting of cash, if it helps them sleep better. A number of people have invested more than they may have done so previously in life. It's hard to advise a cash holding without knowing somebody's age, salary, work situation etc.
@PragueAddick. You do mention that cash is not the answer often. I think if investors are concerned about their exposure to markets, then there is nothing wrong with them increasing their weighting of cash, if it helps them sleep better. A number of people have invested more than they may have done so previously in life. It's hard to advise a cash holding without knowing somebody's age, salary, work situation etc.
Well it's not just me that says that, @golfaddick will be along to say it more forcefully; and also James Shack, whose videos @IdleHans flagged up - very good call, that - will explain in very rational terms why as a matter of fact, cash is not the answer if you are investing. But he will also say that everyone has a different approach to risk, and its good to work out your appetite to risk before investing. Put brutally holding cash is not investing. But people need to hold cash for various reasons, as you quite rightly say. I hold quite a lot of cash, or near cash, like Premium Bonds, because I've retired, and due to the course my career and life took, I don't have guaranteed pensions that on their own would sustain my lifestyle. So I need a fair bit of cash, and I need to be more cautious than someone half my age. But another brutal truth for me is that I've always been quite cautious about risks of any kind, so I've probably always held more cash than I needed to.
Definitely James Shack is worth looking at, as he is aiming at younger/less experienced investors, and one of his themes is that investing is also a matter of mental health - so he'd be very sympathetic to what you wrote - while still imploring you not to hold much cash!
Much as I think James Shack talks a lot of sense and gives some interesting insight, I am in the fortunate position of being able to pay off my mortgage as soon as the fixed interest penalty period expires in April. The idea of no longer having that debt will be good for my mental health even though I could potentially generate better returns by investing it. One less thing to worry about.
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Kept my Lloyds in the vain hope they'll carry on upwards.
All very strange.
https://www.msn.com/en-gb/money/other/lloyds-banking-group-poised-to-buy-back-about-£1bn-of-its-shares-from-next-month-as-it-begins-a-sweeping-new-strategy-under-charlie-nunn/ar-AASOYnr?li=BBoPWjQ
Oh wait - that hasn't worked in the past!
Make that 7897
Definitely James Shack is worth looking at, as he is aiming at younger/less experienced investors, and one of his themes is that investing is also a matter of mental health - so he'd be very sympathetic to what you wrote - while still imploring you not to hold much cash!