Selling losing shares?

Zippeh

I have some shares in both Glencore and Balfour Beatty which are currently down by 13% and 16% respectively. My question is am I better keeping them in the hope that they go up, or better to sell off an put them into a fund which seems to be performing better?

I suppose my question is more general than that, and it's should you keep hold of shares which have gone down (and not moving much now) and invest in something else, or keep hold? Glencore are ex-Dividend now so I believe I have to keep them until I receive my dividend payment?

Glen_Clark

As everyone knows, shares go up and down and the idea is to buy low and sell high.
But when they are low you feel like selling to cut your losses......
And when they are high you feel like buying to gain more .....
I don't know where Glencore and Balfour Beatty shares are going though, sorry

westy22

Glencore are ex-Dividend now so I believe I have to keep them until I receive my dividend payment?

No, once shares have gone ex-div you will be shown as the owner on the record day and you can sell anytime thereafter. The cash due from the div will appear in your account in due course.

AlanP_2

Based on current price for them and what your research into the companies would you buy them today?

If YES, why sell?

Nicholas-bloody-Parsons

my question is more general than that, and it's should you keep hold of shares which have gone down

Done both.

Im holding sainsburys at a 15% loss, knowing that it has £bns in property assets and I get a regular dividends and that it may be a take over target. Im completely unconcerned by the daily movements and will pick up more on a dip.

Ive sold other companies at 8+% loss if I think i got it wrong and the trend is firmly down.:mad:

If in doubt, i sometimes sell half just to reduce risk.

redbuzzard

For what it's worth, there are more broker buy recommendations on those stocks than there are sell.

Nobody can tell you for certain where the share price will go. If the market was perfect, all stocks would be priced correctly!

However - commodities have taken a clobbering. The time for taking profits, or cutting losses, may have gone.

As somebody has already touched on, there is a well documented tendency for amateur investors over time, even in markets which are on average rising, to lose money. That is because of the tendency to sell "duds" and buy more of "stars" that might actually have peaked, thus selling cheap and buying dear.

If I have a fund or share that has already shot the lights out, I am more likely to sell it than add to it. Sometimes I miss out, but I have made a profit.

Actually I am very reluctant to hold individual equities; I find it very difficult to know when to sell, emotion interferes too easily.

This fund manager is holding Glencore - in a fund whose primary objective is to protect capital.

http://www.ruffer.co.uk/cmsfiles/reports/REG_Monthly_report.pdf

Glen_Clark

I find Glencore impossible to value because they are so secretive I don't really understand what they do. All I know is they claim to be commodity trading experts, yet they bought Xstrata at the top of the market.

mike88

All investors should have a stop/loss system. Pity I don't have one myself as I've tended to hang on to poorly performing shares for too long. The best advice would be to ask yourself why you bought the shares in the first place, do these reasons still exist and would you buy the shares today?

Zippeh

I guess the reason I'm reluctant to sell is, once I've done so, then there's no chance of clawing back the money lost is there. Whilst I hold them, at least there are dividends and the potential of regaining the loss. The problem with BB is that a month or so after I bought them, they had all the news about accounting irregularities so that battered the share price and a take over for them failed as well! Couldn't have bought at a worse time really!

dunroving

AlanP wrote: »

Based on current price for them and what your research into the companies would you buy them today?

If YES, why sell?

I think the point above informs your response below.

Zippeh wrote: »

I guess the reason I'm reluctant to sell is, once I've done so, then there's no chance of clawing back the money lost is there. Whilst I hold them, at least there are dividends and the potential of regaining the loss. The problem with BB is that a month or so after I bought them, they had all the news about accounting irregularities so that battered the share price and a take over for them failed as well! Couldn't have bought at a worse time really!

I lost a chunk in 2000 (my very first experience of investing) and at first I looked at things with the same mentality as you - if I cashed in, I'd lose money but if I stayed invested in the same funds, eventually they'd get back to where they were.


But when someone pointed out to me the same advice that AlanP has given you, my perspective changed completely. Hanging on to shares just because you don't want to take a loss is bad logic. Just ask yourself f you had that amount in cash right now, what would you invest in? That should answer your question.


[FYI, I stayed invested in the 4 things I was in back in 2000, because I didn't want to admit I screwed up and it would gall me to actually take cash that was 20% of the value I had put in only a few months earlier. Marconi went bust. Amerindo went bust and Vilar was jailed (Google it). Morrisons went up and down and I got a fair bit in dividends over the years. The tech fund changed hands three times and is currently still only at 55% of what I paid back in 2000. But it has doubled in the past 5 years so I am happy to stay with it.]

Glen_Clark

mike88 wrote: »

All investors should have a stop/loss system.

All except me should have a stop /loss system. I am looking to buy shares cheap and nothing crashes the price of good shares like a wave of stop losses kicking in.;)