THOUGHT FOR FRIDAY 18TH JANUARY 2008
From top share author MALCOLM STACEY
Hello Crazy Gang,
Investing in stocks and shares is not for people who cannot afford to lose. Nor is it for people who always desperately need money fast - to pay off credit card debt, for example.
Shares should be viewed as a long term investment by the average person. It is probably, though, viewed as a shorter gambit by Crazies like ourselves.
But even if you buy shares for the long haul - and won't need to sell them fast to make a bit of money to invest in more exciting stocks - then you should always keep your eye on the sell button. Just in case.
There is no point in holding shares over a long, long time, with no intention of even looking at their values, until the day you retire.
Shares can fall in value, as we all know to our cost in the opening days of 2008. And surely it makes sense to sell falling shares, until they hit a lower value, at which time we can eagerly buy them back.
And yet we all find it hard to sell shares in a falling market. That's a bit like selling your football when the market is flooded with cheaper balls from the third world.
And that's the dilemma we all face. Do we sell shares that are losing value daily or do we not sell em because the price is too cheap?
My own policy, for what it's worth in this vexed situation, is to sell the shares I've lost confidence in but keep the shares which once did me proud and which show no real reason to slow down now. Sorting the sheeps from the goats, though, is never going to be easy. Rocking on!
UKSA is the leading independent organisation for private shareholders in the United Kingdom. It campaigns to protect your rights as a shareholder and runs educational activities for members.
