Private Investor: Here's one banking giant I'll hang on to

Only a few days in and already the Footsie's started its ups and downs. Moves either way in the index of about 50 points may seem alarming, but what might once have been regarded as frightening levels of turbulence are much more calmly taken nowadays.

Mind you, I've learnt not to panic before, so what's happening doesn't necessarily presage much more stormy times ahead. Only fools predict where the Footsie will be in a year's time, and predictions, so one wiseacre writes in the Investors Chronicle, are immoral as well as unwise. Still, I'm reasonably optimistic, and take some comfort in the fact that almost all of the FTSE 100 index's movements can be accounted for by the fortunes of the mining companies.

It seems to me that if you had the nerve and the funds you could make quite a bit out of nipping in and out of some of these stocks - the likes of Kazakhmys say, or, more sensibly Rio Tinto or Billiton. They seem to have a pretty regular rhythm, but you wouldn't want to be holding great slugs of them when this particular game of financial musical chairs grinds to a halt.

As it happens, I'm more interested in selling shares, to fund a property purchase. Nothing speculative, you understand. You may take this as a "sell" signal on the UK residential property market, as my timing is usually fairly bad. The tricksy bit - and don't get me wrong, I'm not bragging - is that I don't want to sell too many shares where I'm sitting on a nice paper profit because if I flog too many of those I'll have to pay capital gains tax, like the big boys. So we have an interesting little fiscal twist here, an example of how the tax system can distort rational financial behaviour. Well, mostly rational in my case.

Thus, I'll be clearing out my own kennel of dog shares: Vivendi, On Line, Reuters, Telecom Plus and, most disappointingly, Smallbone, the posh kitchen fitters. More will follow. One share I'm happy to hang on to, complete with its little paper profit, is Royal Bank of Scotland.

I bought this a year ago and it hasn't really done much until now. It's been tipped by The Independent, no less, as a share to buy for 2007, and is the subject of a strong buy note from UBS, which describes RBS as the cheapest big banking group on the block.

Merrill Lynch also rate it as a buy, with a price target of 2,261p. The shares have crested the 2,000p mark, itself about 10 per cent up on where I managed to buy them and not far off its all-time high. The group seems to have improved its bad losses, in contrast to most UK banks, though I don't suppose it would be immune from a serious slowdown in the economy.

There again about half its earnings nowadays come from abroad, and things are improving across all of its business activities. It yields 3.7 per cent and it trades on the most modest ratio of its peers - mainly because it is not seen as a bid target in the way that Barclays, Alliance and Leicester and others periodically are. I'd like to hang on to RBS and maybe even add to it, no matter what happens.

It should prove as solid as its magnificent head office building in Edinburgh. I say that because work took me there over the festive season. A thought occurred to me as it must have done to you if you've ever traversed the vast wilderness that is so much of the UK. Why don't we just build all over it? Not the bits of special scientific interest or the areas of outstanding natural beauty. No one wants to see a Bovis estate on National Trust land. But it just seems to me that the likes of Migration Watch go on and on about "our overcrowded island." Only if you're sitting in the middle of London or Sheffield, I should think.

I know we're almost as densely populated, according to the stats as Holland or Hong Kong or something, but it's just that I would have thought you could double the size of say Ely or Peterborough or Carlisle and no one would much notice. No endangered species would die out and no one would miss the view.

Why have I taken this strange detour? Because I'm worried. I think it's great to get Polish plumbers and Bulgarian builders and Romanian spud pickers to come and do the jobs we can't or won't do. Trouble is it's yet another push on the housing market. So why don't we just get building to meet the demand? As a house buyer I'd like to see a much more sustainable, stable market. So would we all.

s.ogrady@independent.co.uk

PROMOTED VIDEO
News
video
Life and Style
tech
Arts and Entertainment
Southern charm: Nicolas Cage and Tye Sheridan in ‘Joe’
filmReview: Actor delivers astonishing performance in low budget drama
Arts and Entertainment
While many films were released, few managed to match the success of James Bond blockbuster 'Skyfall'
film
Arts and Entertainment
Up my street: The residents of the elegant Moray Place in Edinburgh's Georgian New Town
tvBBC's The Secret History of Our Streets reveals a fascinating window into Britain's past
Extras
indybest
News
Albus Dumbledore, the headmaster of Hogwarts School of Witchcraft and Wizardry has been the teaching profession's favourite teacher
education
Sport
Luis Suarez looks towards the crowd during the 2-1 victory over England
sport
Life and Style
Cheesecake frozen yoghurt by Constance and Mathilde Lorenzi
food + drinkThink outside the cool box for this summer’s frozen treats
News
John Barrowman kisses his male “bride” at a mock Gretna Green during the Commonwealth Games opening ceremony
peopleBarrowman's opening ceremony message to Commonwealth countries where he would be sent to prison for being gay
Sport
Sir Bradley Wiggins removes his silver medal after the podium ceremony for the men’s 4,000m team pursuit in Glasgow yesterday
Commonwealth games Disappointment for Sir Bradley in team pursuit final as England are forced to settle for silver
Sport
Alistair Brownlee (right) celebrates with his gold medal after winning the men’s triathlon alongside brother Jonny (left), who got silver
England's Jodie Stimpson won the women’s triathlon in the morning
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Junior Research Analyst - Recruitment Resourcer

    £18000 - £20000 per annum + OTE £25K: SThree: SThree Group has been well estab...

    Senior Analyst - Financial Modelling

    competitive: Progressive Recruitment: This really is a fantastic chance to joi...

    Associate CXL Consultant

    £40000 - £60000 per annum + BONUS + BENEFITS: Harrington Starr: CXL, Triple Po...

    Business Anaylst

    £60000 - £75000 per annum + BONUS + BENEFITS: Harrington Starr: Business Anal...

    Day In a Page

    Backhanders, bribery and abuses of power have soared in China as economy surges

    Bribery and abuses of power soar in China

    The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
    Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

    Highland terriers steal the show at opening ceremony

    Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
    German art world rocked as artists use renowned fat sculpture to distil schnapps

    Brewing the fat from artwork angers widow of sculptor

    Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
    BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

    BBC takes viewers back down memory lane

    The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
    Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

    Nicolas Cage shines in low-budget drama Joe

    Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
    How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

    Make your own ice lollies and frozen yoghurt

    Think outside the cool box for this summer's tempting frozen treats
    Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

    Fiesta is UK's most popular car of all-time

    Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride
    10 best reed diffusers

    Heaven scent: 10 best reed diffusers

    Keep your rooms smelling summery and fresh with one of these subtle but distinctive home fragrances that’ll last you months
    Commonwealth Games 2014: Female boxers set to compete for first time

    Female boxers set to compete at Commonwealth Games for first time

    There’s no favourites and with no headguards anything could happen
    Five things we’ve learned so far about Manchester United under Louis van Gaal

    Five things we’ve learned so far about United under Van Gaal

    It’s impossible to avoid the impression that the Dutch manager is playing to the gallery a little
    Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

    Screwing your way to the top?

    Good for Lana Del Rey for helping kill that myth, says Grace Dent
    Will the young Britons fighting in Syria be allowed to return home and resume their lives?

    Will Britons fighting in Syria be able to resume their lives?

    Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
    Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

    Beyoncé poses as Rosie the Riveter

    The wartime poster girl became the ultimate American symbol of female empowerment
    The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

    The quest to find the perfect pair of earphones

    Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
    US Army's shooting star: Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform

    Meet the US Army's shooting star

    Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform