When to sell shares

[NoGoodPunsLeft]

DH has been dabbling in buying shares a bit instead of putting money into his ISA (pretty much zero interest).

He spent £30 on shares which are now worth £500+. Pre-Christmas they were worth £300-ish at which point I suggested cashing out but he said he wanted to wait a bit longer, good job really!

The question is when to pull the plug, is there anything to look out for/signs?!

The company is going public (is that a thing?!) soon, would that be a good time to sell?

How did he buy shares if they aren’t already public?

I mean I know you can buy shares pre-IPO but in my experience not £30 worth

Can he put the shares into a stocks and shares ISA.

Shares are really a long term investment. Why is he selling them?

My DH says sell them when you need the money! Or else he often sells enough to pay back the original investment and then leaves the rest invested - that way you haven't lost anything..

Honestly? My view is that trying to time the market is just gambling and can be a slippery slope. I know that some people do really well buying/selling when they know exactly what they're doing but there are plenty that make bad investment decisions. I think as pp said a long term strategy of investing via a SS ISA is a better strategy for most people.

You really need a balanced portfolio and some kind of pooled investment.

Individual shareholdings are basically gambling.

Not a problem with small stakes and more interesting than a one off football match provided you can afford it.

Unlikely to consistently repeat this current run I would think

@CarolinaWeeper
@topcat2014

I agree that it's like gambling. DH initially got the app to buy some shares in rolls Royce because they were so cheap & has now moved into more dabbling.

I'd definitely prefer him to have a stocks & shares ISA as it feels less risky

If the shares are unlisted, how did your DH buy them and who valued them when he bought them and now?
What magic app is he using?
Try to cash out and let me know what happens!

Is it Hargreaves lansdowne?

Anyway be careful he doesn't move into more obscure contacts where you can actually lose more than you invested.

Sounds like you have shares listed on the secondary market (AIM it used to be called) that are going for a full listing

My advice: never, ever sit on massive gains in the hope of getting more UNLESS you really know the sector and the specific company (ie there is some strong, fundamental reason to expect further gains). Always get out while the going is good, even if it means giving up some potential future gains. In the long run you'll lose more from being greedy than you lose from being cautious.

I've made 100% on a share I bought earlier this year and I'm looking for my exit point now, even though there are good fundamental reasons to believe that the share can make further gains. (In this case I will probably take my gains and keep my original stake invested, because the reason for buying the share in the first place hasn't gone away).

i agree with @Mistigri. I was up £15,000 in profit during the summer on 1 share. I stupidly left it in. Now i'm only up 1k, greed can taketh what luck hath given. Set your target and exit.

In the OPs case, I suppose it depends whether you need the money right now. £500 isn't life changing for most people and your initial investment was small.

Think about how you would feel if you didn't sell and the value went back down to little or nothing.

Likewise, what if you sold now and the value was £2k or more by the end of this year? Is it in a sector where the price is likely to rise when they go public, eg one that has done really well in covid times?

You could sell half the shares, so you crystallise a good proportion of the gain, and leave the rest in so you still have a chance of making more if the price rises further.

That sounds like a good plan Barbara best of both worlds. Agree that you need lots of knowledge, nerve, willingness to accept losses to make significant gains from individual stocks. It is also a pain keeping records for tax purposes.