Question: I bought NAB at $27.62 last Thursday. I’ve been following the stock and it has been declining. Would you be able to explain why the NAB trend is down? I have 1000 units and I don’t know whether to hold on to call of it or to reduce. Would you be able to help on this please?
Answer (By Paul Rickard): I don’t know why you would be concerned about your purchase of NAB after a few days, unless you purchased the shares for a short-term trade. When I invest, I don’t expect to pick the bottom – so it is quite normal for me to see a stock trade below what I paid for it.
In the case of NAB, nothing has changed since last Thursday:
- Banks remain out of favour with the market due to the Royal Commission and subdued earnings prospects; and
- Of the profit results, NAB was the most disappointing. Its recent decline comes after a period (6 to 12 months) of peer outperformance.
There is an old rule in investing – if you are not comfortable, don’t hang on. Sounds like you aren’t comfortable.
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