Wednesday 19 December 2012

Portfolio (Partial) Sale: BT Group (LSE:BT.A)

The Christmas decorations are up, the presents are bought and there's undrunken mulled wine in the fridge.

But before we hit the seasonal over-eating and lethargy, there was an opportunity for a little trimming of the portfolio.

 I have a couple of BT Group holdings - bought at different time for different prices - from the days when they were a proper high-yield dividend share. But then they cut the dividend and the share price tanked. Now they are yielding under 4% - just not good enough.

Now, my reaction to this kind of a disaster in a dividend share holding is usually to do nothing, as long as the overall business model of the company does not look damaged. This usually means a few years of poor income returns while the company repositions itself and hopefully the share price eventually recovers.

Today I noticed that one of my holdings has bobbed above water and I have sold it at a slight profit (the other chunk of BT Group is still doing a good imitation of the Costa Corcordia). BT's share price has been doing well, and I am not aware of any game-changing news, so I'll hold the other chunk of shares until whenever. At least the dividend is forecast to increase a bit over the next few years.

Any of you who have studied financial behavioural psychology will point out the various errors in my thinking: reluctance to accept a loss, fixation on the purchase price, etc: all of it probably true. But at the moment I'm feeling quite smug looking at a portfolio that has grown by nearly one-third in 2012. (Ooops, theres another behavioural error!)

[Sold 19/12/12 at £2.39]

I am not a financial adviser and the information provided does not constitute financial advice. You should always do your own research on top of what you learn here to ensure that it's right for your specific circumstances.


  1. I've just recently sold my holdings in BT for the following reasons:

    - Overspending on Sports Rights
    - Still huge pension deficit
    - Competition from mobile broadband & VOIP


  2. I await your next purchase with great interest, but I guess you will wait until the current rally has finished in early 2013.
    Great site.

    Matt McK

    1. Matt - you might be right: perhaps time to build up a little cash?