Would you Invest your money:Conclusion

One of the first articles I produced for Hub Pages was a piece titled "Would you Invest your money?", I wrote this article two years ago and never went back to check on my predictions. I suppose trading in shares is a more long term strategy than I envisaged back then, so now seems an idea time to see how I got on. The three companies that I hypothetically bought a hundred shares in were BP, Barclay's Bank and UK pub chain JD Wetherspoon.

At the time of the article BP was in the news for the Oil spill at its Gulf of Mexico facility, and the effect on the Environment, BP's reputation and the cost of repairing the damage was expected to be massive. Barclay's Bank was at the time surviving the Banking crisis that effected its British rivals and trying to avoid the PPI minefield of previous regimes. Wetherspoon's were the leading force in the UK drinks industry, but they were still facing an uncertain future due to rising costs, VAT, Sports events and Government research in how to battle numbers of drinkers involved in anti-social behaviour.

Let's see if I made a hypothetical profit or loss on the £1,182.85 that I put into these 300 shares back in 2010. I have not included any fee's for trading in these items and have also ignored any thoughts of dividend or bonus from these shares.


Investing your money?
Investing your money?

BP


The first shares I mentally purchased were 100 BP shares at £4.45 per share, after two years the shares have not exploded in price. The Company is still doing well and creating vast profits, but with the full cost of the Gulf of Mexico clean up expected to be in excess of £35 billion the shares were unlikely to jump to the price before the spill price of £6.30 a share. The company can cover the costs of the cleanup and the company is still profitable. It will even be able to pay dividends to its share holders. Over a longer term the shares are likely to return to their peak once all the negative publicity has faded. I would have made a loss if we go by today's share price for BP.


BP current price ( 18/12/2012- 428.80 ( High 430.82 and low of 426.80 ) so I lost out on £0.19 per share. But in my defence the shares have kept pretty consistent over the last two years.



JD WETHERSPOON


The next shares I invested in were JD Wetherspoon 100 shares at £4.37 per share. I was pleasantly surprised to see that the shares had increased in value my about 20% on their initial purchase price. The company owns a lot of it's pubs outright so is sitting on a lot of central locations, if they ever needed to refinance they have the assets to ignore the need to borrow heavily. Wetherspoon's have carved a niche in the market and can compete with the McDonald's and Starbucks, especially as they are often close to each other in location.


JD Wetherspoon price ( 18/12/2012- 523.00 ( High 536.00 and low of 522.50) so my shares have risen in value by £0.86 per share in the last two years.


BARCLAY'S BANK


The final stock I hypothetically invested in were 100 Barclay's Bank shares at roughly £3.00 each. These shares saw me make a loss on my original investment, which given the turmoil of the banking system is not a great surprise. With problems in the Euro-zone, allegations of fixing of rates and a slow economy Banking was not a sector that would show the returns of a few years ago. Many British banks needed the help of the Bank of England and direct Government intervention. Barclay's did not suffer like many of its competitors but still had to meet many different challenges since 2010.


Barclay's Bank price ( 18/12/2012- 259.70 ( High 262.13 and low of 257.85) so the shares lost nearly £0.42 per share in the last two years.



Overall I came out ahead thanks to the performance of the Wetherspoon's shares. I think I did a half decent, job considering I am not experienced in the workings of stocks and shares. For the modest profit I achieved I would have made more by placing a lump sum in an ISA or savings account. In all fairness if I had that money spare in my account, I would have taken the children to Disneyland for a once in a lifetime holiday.


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