Markets were quite jittery yesterday, especially in the small cap higher growth end that I tend to invest in. There have been a number of sizeable falls of shares in portfolio and watchlist. This is likely because of ‘Super Thursday’, where this Thursday we have the UK general election, Comey in front of the Senate and an ECB meeting. I’m not particularly fazed by this from the perspective of my portfolio, but I have sold out of a couple of sizeable positions where prices fell significantly this week. These are Somero Enterprises (for an 86% profit) and System 1 (for an 82% profit).
It was tempting to just hold everything despite the volatility, which may well prove to be temporary – choppy markets can be the bane of my momentum-based strategy if I keep selling on the lows and buying the highs. However, I think it is more important to maintain discipline for now and protect the profits on these positions. I have reinvested most of the proceeds across my existing holdings but also kept a bit of cash. If the markets become more volatile I will continue to take profits and increase the proportion of cash in the portfolio.