Halloween Horror Story: Like Woodford, I Sold Vodafone Group Plc Too Early

Impatience cost me on Vodafone Group plc (LON:VOD).

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

We all know the scariest stories are true stories, so gather ’round kiddies as I tell a tale of investing horror that will haunt your dreams and send shivers through your portfolio.

This one comes from my own portfolio, and acts as a cautionary tale to over-eager novice investors.

I had bought my first share, Vodafone (LSE: VOD) (NASDAQ: VOD.US) at around 175p when the price had been relatively stable for a decent period of time, and was more than happy with its 5%+ yield. “All I need to do now is sit tight and watch the money roll in!” I thought to myself. Strike one.

But watching turned out to be my downfall, as I grew impatient. “Where’s the excitement? I have to wait how long to receive my dividend?” As my first stock, I logged on every day to see what gains or falls it had made in the last 24 hours – this was also my undoing. Strike two.

See, I had bought Vodafone on the advice of Motley Fool Share Advisor expert Charly Travers, after he had written it up for the newsletter service. He praised the stock for its valuable 45% ownership of Verizon Wireless, calling it “underappreciated by the market”.

Indeed, at the time the group’s total market cap was rated at £87bn – and no doubt you’ll have heard that Vodafone’s stake in Wireless alone was sold to its joint-venture partner Verizon Communications for around £84bn.

But I was foolish (with a little ‘f’), and didn’t consider that when I saw the share price begin to drop off slightly. Six months after my initial investment, the shares were hovering around 165p – and I had grown impatient. I decided to sell half of my original holding at a loss, in the hope of re-investing it into a more exciting stock. Strike three, I’m out.

Shortly after selling half of my holding, rumours started to circulate that Verizon were interested in buying Vodafone’s stake in Wireless – or even launch a takeover. This sent the shares up; this time, I couldn’t bear to watch, knowing that despite retaining some shares, my knee-jerk decision was costing me every time I saw that green arrow next to the ticker.

We all know what happened next. Six months after I sold half of my holding at 165p per share, Vodafone stock had broken the £2 barrier. And just over two months later, they are currently hovering around 225p.

It’s still painful, but I’ve since learnt my lesson. Before I purchase shares, I make sure I have done enough research into the company to ensure I’m a ‘happy holder’ for the long term. As a result, I’m not worried by any peaks and troughs in line with the market – in fact, I barely glance at the performance of my portfolio more than once a week now, as I’m content with the underlying decisions of my investments — especially that 4.5%+ yield from Vodafone.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

> Sam still owns some shares in Vodafone. The Motley Fool has recommended shares in Vodafone.

More on Investing Articles

Investing Articles

Here’s how I’m using a £20k ISA to target £11k+ in income 30 years from now

Is it realistic to put £20k in an ISA now and earn over half that amount every year in passive…

Read more »

Young black colleagues high-fiving each other at work
Investing Articles

If I could only keep 5 UK stocks from my portfolio I’d save these

Harvey Jones is running through his portfolio of top UK stocks to see which ones he couldn't bear to do…

Read more »

Midnight is celebrated along the River Thames in London with a spectacular and colourful firework display.
Investing Articles

I’m aiming for a million buying unexciting shares!

By investing regularly in long-established, proven and even rather dull businesses, this writer plans to aim for a million. Here's…

Read more »

Investing Articles

3 things to consider before you start investing

Our writer draws on his stock market experience to consider a few vital lessons he would use to start investing…

Read more »

Investing Articles

Will this lesser-known £28bn growth stock be joining the FTSE 100 soon?

As the powers that be plan a reorganisation of Footsie listing rules, this massive under-the-radar growth stock could find its…

Read more »

Investing Articles

Fools wouldn’t touch these 5 FTSE 350 flops with a bargepole – how come I own 3 of them?

Harvey Jones took a chance on three struggling FTSE 350 stocks in the hope that they'd stage a dramatic recovery.…

Read more »

Young black colleagues high-fiving each other at work
Investing Articles

How I’m trying to make a million from passive income

Invest as much as possible, regularly, and use the passive income to plough back into more shares. Here's how millionaires…

Read more »

Investing Articles

I’d buy 30,434 shares of this UK dividend stock to target £175 a month in passive income

A top insider has spent over £1m buying this 9%-yielding passive income share over the last year. Roland Head explains…

Read more »