In this "Ask A Foolish Question" article, I'm going to outline what I plan to do with my shares in Diageo (LSE:DGE) (NYSE:DEO), having seen an instant gain in their value to reach today's price of 1,887 pence.
I bought shares in the beverages company in mid-January 2013, before the company released its interim trading statement later that month, as the shares had remained fairly static around the 1,806 pence mark for the previous week. I thought it looked like a decent time to buy into one of the FTSE's biggest constituents.
The shares then went on a broadly upward trajectory, closing at 1,853 pence the day before Diageo was due to release its latest set of results. A positive statement then set the shares off again, shooting north of 1,900 pence as we entered February.
At an average cost of 1,827 pence per share with trading fees included, my Diageo holding was up 4.2% at the shares' price of 1,904 pence on 1 February. A week later, they have lost a little bit of their value, but only marginally, settling around 1,886 pence today.
However, that's still equal to the shares' five-year high (achieved at the end of 2012), and set a new top of 1,906 pence at the beginning of this month, which is testament to the faith that investors have in the company.
So, my first notable gain from buying shares! But am I tempted to cash in? No. I bought Diageo shares as a long-term investment, believing that the company is a staple of the U.K.'s premier index, and when a bull market occurs and the markets move up -- much like we're seeing now -- then the FTSE's largest companies will move in the same positive trajectory.
It's important, not to mention Foolish (with a capital "F"), not to let emotion rule your investing decisions. Here at the Fool, we believe that it is best practice to buy shares if you are happy to hold them for a minimum of three to five years. After all, history dictates that, if I think I'm happy with the gains made on my Diageo shares after a month, then I'm likely to be very happy with them in half a decade's time!
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Sam Robson owns shares in Diageo. Motley Fool newsletter services have recommended buying shares of Diageo. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.