Posted by Tim Stobbs on January 28, 2008
Well despite all my good intents otherwise I broke down and changed my investing plan last week. The reason was fairly simple. I got a raise and between that and the recent tax breaks I really don’t need as much of our saving for my wife’s maternity leave than I originally thought.
So I’m sitting on a small pile of cash I suddenly don’t need. The market is tanking and one of our holdings is as cheap as it has ever been in the last five years. So I think to myself “Well if we pick up some here we will almost be done with our position with this stock. Ah what the hell, let’s put in a ridiculously low limit order and see what happens.”
Much to my amazement it works. I go from ‘Pending’ to ‘Filled’ in no time flat and I now own 300 shares of EIT.UN at $4.80/share for a 17.5% yield.
Was it foolish? Yes.
Was it impulsive? Yes.
Was it advisable for anyone else to do something similar? No, I just got greedy and got lucky so far (the last time I looked the price was now at $5.10/share). It may drop further than that some day, so I might regret this decision.
So what’s next? Well as I hinted at above, I don’t want to have too much stock with any one company. So after we break a total of 2000 shares between my wife and I we are going to stop the synthetic DRIP and move the monthly cash flow generated by the stock to our cash reserves while my wife is not working. If it looks like I won’t need the cash we will likely just put into our RRSP’s by the end of the year.
So it just goes to show emotions can get a hold of anyone and change your mind. I may regret this, but I hope I don’t in the future. Damn those moments of weakness. Anyone got any tips to avoid this in the future?