Was NAB a bad buy?

Hi, I’ve bought NAB at $27.62 last Thursday. I’ve been following the stock and has been declining. Would you be able explain why NAB trend is down for the past five days. I have 1000 ynits and I don’t know whether to hold on all of it or to reduce. Would you be as able to help on this please. Thank you.

Kind Regards,

A: Thanks for the question.

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:

  1. Banks remain out of favour with the market due to the Royal Commission and subdued earnings prospects; and
  2. 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.

Regards


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