When do you sell shares?

Nam3Unavailable

If the theory is that you are more likely to make a profit if you hold stocks and shares for the long term, when should you look to sell them? This genuinely has me confused, I’ve been buying shares for the last 9 months and I’m in profit around 25% overall but what is a good way to decide when to sell? 

eskbanker

Depends on what your objective is when investing - taking short-term profits can be tempting but if you did that, what would you do with the proceeds, and why haven't you been doing whatever that is already?

ColdIron

My funds and shares provide me with an income. I doubt I'll ever sell them, well not until I start drooling and require care. A esk says, it's down to objective

Nam3Unavailable

I’ve been reading about BP shares, they have dropped during the pandemic but people are saying that they will return to circa £5 , how do people make this assessment? What’s to stop them going to £10 or even £1?

ColdIron

Most people don't buy company shares. Collective schemes are a better option for the majority. Then you can let the fund manager make an assessment, or just follow the market

HHarry

Nam3Unavailable said:

I’ve been reading about BP shares, they have dropped during the pandemic but people are saying that they will return to circa £5 , how do people make this assessment? What’s to stop them going to £10 or even £1?

It’s all guess work - although it can be educated guess work with some homework.  That said with the same facts 2 people will still come up with 2 scenarios.

I bought BP at 300p, have seen it close to 600p, currently at 276p. Something amazing could happen in the oil industry and they’ll hit £10, or Tesla take over the world and they end up at a £1.  Your guess is as good as mine.

Better still don’t buy BP, buy VLS or HSBC Global Strategy or something similar.

Linton

Investing in shares is rather differernt to investing in funds.  When you buy a share there is always the risk that you could lose your whole investment.  This is virtually impossible with a mainstream fund, almost all of which should increase in value over time. This difference leads to different investment strategies.

With funds buy and hold makes most sense to me.  Buy the right mix of funds and leave them to get on with their job.   Tinkering is likely to lower returns. This hands off approach seems too risky for individual shares and a better rule could be to hold onto them until you see somewhere better for your money.

However in both cases diversification is important.  So were I to invest in shares I would always sell when a shareholding got so large that a failure would have a serious effect on the whole portfolio.

sevenhills

HHarry said:

It’s all guess work - although it can be educated guess work with some homework.  That said with the same facts 2 people will still come up with 2 scenarios.

I bought BP at 300p, have seen it close to 600p, currently at 276p. Something amazing could happen in the oil industry and they’ll hit £10, or Tesla take over the world and they end up at a £1.  Your guess is as good as mine.

Yes just guess, I usually sell when I am happy with a 20%/30% increase, that can be after a short period or longer.

I check my shares most days, so on a few occasions I have been spooked and sold sooner, but always try to sell when in profit. I have had shares and I still do, that crashed, so waiting for their long return to the original price. With those, any profit is acceptable.

I have shares in Shell, which are 44% down.

Thrugelmir

Individual shares might be sold for a whole variety of reasons. Bottom line is that they are active trading entities. Facing the day to day challenges and risks that all businesses do.  Opinions are what ultimately drive prices up or down. 

Generally I tend to sell when there's a better use of the money elsewhere. No one ever went broke by pocketing a profit. 

benbay001

I was typing out a few paragraphs, and then realised everything i was writing could be summed up with a video from my favorite YouTube channel.
https://www.youtube.com/watch?v=XN_0ipn_c1I&t=464s

"When to Sell a Stock | Phil Town"

Of course, just as there are many ways to skin a cat, there are also many ways to invest, and many ways to find companies to invest in. But the above is the line of thinking that makes the most sense to me.

Ultimately, its just as important to know the details of a companies fundamentals when you enter a position, as it is to know them whilst you hold it, so that you know when to exit (If they change)

clive0510

Well I've allways gone with the old theory of buy low sell high. whether that be business, class ads, jumble sales, what ever. so given my well thought out strategy and the current climate. surely one would think the time for buying is now.