Portfolio Sale CPBB.L

I've just sold my pref shares in the Co-op bank, following (a) its failed attempt to buy a portfolio of Lloyds branches, (b) the downgrade of its debt to junk status, and (c) the exit of its CEO.

I managed to get out at around 98p, around a 25% loss from its purchase price last month.  This loss in theory should be softened by the receipt of a preferred dividend later in the month (assuming it is still paid!).

I didn't need to sell, but there is no obvious reason to hold on to this now, despite the yield that attracted me in the first place.  The market may have over-reacted today, the price may recover and this may have gone on to be a solid investment.  However I decided to cut my losses primarily due to the individual counterparty risk this investment gave me.  If this had been a broad ETF suffering from a market wide event i would have probably held on, but i have found the chance of failure against one struggling counterparty to be unacceptably high.

Lessons learnt:
Stick to the original strategy of broad diversification
Understand and accept the risks associated with high yield
Do more due diligence and research prior to investment

Fortunately this has not had any material impact on my finances, with the original investment being well under 1% of total assets.  I hope the experience and lessons learnt may well go on to save me a lot more in the future than i lost today.