To prune underperforming shares or not
Discussion
In my stocks and shares ISA I have loads of shares under performing, losing me thousands of pounds if sold.
For example Block Energy book cost £499, value now £96.17, Fox Xplore book cost £800, value now £95 plus many more shares like that.
I have been rather optimistic that something may stir them into action but at what point do you decide to take the financial hit and sell or just leave them to fester for longer.
Stop loss would have helped but been hit by a share price dropping in the morning triggered stop loss only to find it up on the day
For example Block Energy book cost £499, value now £96.17, Fox Xplore book cost £800, value now £95 plus many more shares like that.
I have been rather optimistic that something may stir them into action but at what point do you decide to take the financial hit and sell or just leave them to fester for longer.
Stop loss would have helped but been hit by a share price dropping in the morning triggered stop loss only to find it up on the day
Well for your bad trades, it's too late, I would just leave them unless there's something you haven't mentioned that means you could lose even more eg you're leveraged. Edit: in those two examples, you'll lose £90 each if it all goes wrong as it's already gone wrong so I would continue (but then I would have bailed way before this point). This is just my approach and not financial advice. I just do Cash ISAs.
To misquote Jack Reacher, the thing about S&S ISAs, too many losses.
The only difference between S&S ISAs and plain old buying shares is that if you make a profit, you don't have to pay tax but there's no guarantee you'd make a profit and no guarantee you won't lose the lot. If you had put half in a Cash ISA, which account would look better?
saknog said:
Stop loss would have helped but been hit by a share price dropping in the morning triggered stop loss only to find it up on the day
And if you'd used stop losses on all your bad bets?To misquote Jack Reacher, the thing about S&S ISAs, too many losses.
The only difference between S&S ISAs and plain old buying shares is that if you make a profit, you don't have to pay tax but there's no guarantee you'd make a profit and no guarantee you won't lose the lot. If you had put half in a Cash ISA, which account would look better?
Edited by Hoofy on Friday 12th September 10:05
saknog said:
In my stocks and shares ISA I have loads of shares under performing, losing me thousands of pounds if sold.
For example Block Energy book cost £499, value now £96.17, Fox Xplore book cost £800, value now £95 plus many more shares like that.
I have been rather optimistic that something may stir them into action but at what point do you decide to take the financial hit and sell or just leave them to fester for longer.
Stop loss would have helped but been hit by a share price dropping in the morning triggered stop loss only to find it up on the day
Maybe worth keeping until you need to crystalise some CGT losses?For example Block Energy book cost £499, value now £96.17, Fox Xplore book cost £800, value now £95 plus many more shares like that.
I have been rather optimistic that something may stir them into action but at what point do you decide to take the financial hit and sell or just leave them to fester for longer.
Stop loss would have helped but been hit by a share price dropping in the morning triggered stop loss only to find it up on the day
Peterpetrole said:
Experienced "successful" stock pickers will be along in a moment, but of course you can't sell something that has already lost you 80% of the money you could ever lose on it. There is only upside for that sort of stock.
Not sure if serious?What matters is why they lost 80% of their value, and is there 400% growth on the way, or more bad news?
Hoofy said:
And if you'd used stop losses on all your bad bets?
If I’d put a stop loss of it falling 15% my losses would be less but could have missed out on it rebounding back up 30%.Each share I researched had fundamentals that were good (or so I perceive) at the time but the experts decided otherwise.
saknog said:
Hoofy said:
And if you'd used stop losses on all your bad bets?
If I d put a stop loss of it falling 15% my losses would be less but could have missed out on it rebounding back up 30%.Each share I researched had fundamentals that were good (or so I perceive) at the time but the experts decided otherwise.
So you're seeing 30% on one trade and 80% loss on others? I'd rather miss out and still have money to fight another day. Money management can keep you in the game longer. Mind you, sometimes it's better to just take a massive bath and write it off as a learning experience. Saves a lot of time and grief.
I posted this just now in my original reply:
The only difference between S&S ISAs and plain old buying shares is that if you make a profit, you don't have to pay tax but there's no guarantee you'd make a profit and no guarantee you won't lose the lot. If you had put half in a Cash ISA, which account would look better?
saknog said:
In my stocks and shares ISA I have loads of shares under performing, losing me thousands of pounds if sold.
For example Block Energy book cost £499, value now £96.17, Fox Xplore book cost £800, value now £95 plus many more shares like that.
I have been rather optimistic that something may stir them into action but at what point do you decide to take the financial hit and sell or just leave them to fester for longer.
Stop loss would have helped but been hit by a share price dropping in the morning triggered stop loss only to find it up on the day
You need to decouple the emotion of what you've lost from the factual position of where you actually are. (Easier said than done as we are all emotional creatures)For example Block Energy book cost £499, value now £96.17, Fox Xplore book cost £800, value now £95 plus many more shares like that.
I have been rather optimistic that something may stir them into action but at what point do you decide to take the financial hit and sell or just leave them to fester for longer.
Stop loss would have helped but been hit by a share price dropping in the morning triggered stop loss only to find it up on the day
i.e. It doesn't matter that the share is 80% down...... That's done & you can't go back in time and your "optimism" ain't worth squat.
The only question you need to ask yourself (every day if you like) is "If you had the money in your hand now, would you buy this actual share at today's price or not?"
- If you would, because you genuiniely have reason to believe that it is underpriced and it's going to recover, then fine, hold it
- If the answer is "no, I wouldn't buy it at £95 if I had the money in my hand", then sell it and buy the thing that you would buy instead.
If you would, because you are "willing it to recover" with no actual reasoning, then that's the emotion kicking in - recognise it and go and ask yourself the question again.
Sometimes the best investment is to take the loss and move what's left to a better plan
1. How the price got to where it is (i.e. your loss) is completely irrelevant. As of today you have value of "£x" and the only thing that matters is where that "£x" should be invested right now for the best possible future returns.
2. Making a capital loss on sales in any year is fine (i.e. if the investments aren't in ISA or SIPP) because all you have to do is fill in a CGT return to "claim" those losses and then you can carry them forward to use against future realised gains.
2. Making a capital loss on sales in any year is fine (i.e. if the investments aren't in ISA or SIPP) because all you have to do is fill in a CGT return to "claim" those losses and then you can carry them forward to use against future realised gains.
Until actually sold you’ve not crystallised any loss but equally if you think they are only now going to go down maybe time to sell.
In reality /hindsight obviously having a price point in mind to sell should your picks not go the way you thought / wanted would have been better.
This obviously also applies to profit points too.
And as Pana and others have said if you are trading in individual stocks maybe better to have in a general account and not ISA.
Loss carry forwards for CGT purposes can be carried forward indefinitely so only there to be washed away if needed.
In reality /hindsight obviously having a price point in mind to sell should your picks not go the way you thought / wanted would have been better.
This obviously also applies to profit points too.
And as Pana and others have said if you are trading in individual stocks maybe better to have in a general account and not ISA.
Loss carry forwards for CGT purposes can be carried forward indefinitely so only there to be washed away if needed.
98elise said:
Peterpetrole said:
Experienced "successful" stock pickers will be along in a moment, but of course you can't sell something that has already lost you 80% of the money you could ever lose on it. There is only upside for that sort of stock.
Not sure if serious?What matters is why they lost 80% of their value, and is there 400% growth on the way, or more bad news?
saknog said:
In my stocks and shares ISA I have loads of shares under performing, losing me thousands of pounds if sold.
For example Block Energy book cost £499, value now £96.17, Fox Xplore book cost £800, value now £95 plus many more shares like that.
I have been rather optimistic that something may stir them into action but at what point do you decide to take the financial hit and sell or just leave them to fester for longer.
Stop loss would have helped but been hit by a share price dropping in the morning triggered stop loss only to find it up on the day
I bought £400 of shares in an oIl company back in around 1995. Shares were roughly 70p each. They pottered along ±10% or so for a couple of months, then dropped like a stone to about 10p per share. They weren't worth selling so i just kept them. About 20 years later I had a letter from a company that was organising a takeover and wanted to buy all my (and presumably a load of other small investors) shares at £4.50 per share.For example Block Energy book cost £499, value now £96.17, Fox Xplore book cost £800, value now £95 plus many more shares like that.
I have been rather optimistic that something may stir them into action but at what point do you decide to take the financial hit and sell or just leave them to fester for longer.
Stop loss would have helped but been hit by a share price dropping in the morning triggered stop loss only to find it up on the day
TLDR: Your shares are worth bugger all, you might as well hang on to them for ever and hope something changes
Peterpetrole said:
It's 90 quid
Yep, at this point it's like the OPer's got £90 in lottery tickets and there's a chance it could be worth nothing, a definite chance of £0 if he sells and a chance that this time next year he'll be a millionaire.
If it was £9000 or £90k then things would be different. Unless he's a multimillionaire.
Hoofy said:
Peterpetrole said:
It's 90 quid
Yep, at this point it's like the OPer's got £90 in lottery tickets and there's a chance it could be worth nothing, a definite chance of £0 if he sells and a chance that this time next year he'll be a millionaire.
If it was £9000 or £90k then things would be different. Unless he's a multimillionaire.
@saknog -
i agree with you on not using physical stop loss on volatile assets, that said, using a 'soft' SLoss with a written down action plan does make sense....
if you've charted the stock even at a rudimentary scale, shd be able to have a clear exit in mind - ie/ if they lose 1-2 supp areas.
having a 'get out' level is key when you first enter....
Hope isn't a strategy, nor is the loss of opportunity cost.
for now, as others have said.....kind of a lottery; Maybe you use those 2 losers as a chance to try to trade other stocks and try and hone the 'know the enrty/exit'. worst that happens is that you'll lose whats remaining, best case it reveals whether you can pick stocks and get in/out.
i agree with you on not using physical stop loss on volatile assets, that said, using a 'soft' SLoss with a written down action plan does make sense....
if you've charted the stock even at a rudimentary scale, shd be able to have a clear exit in mind - ie/ if they lose 1-2 supp areas.
having a 'get out' level is key when you first enter....
Hope isn't a strategy, nor is the loss of opportunity cost.
for now, as others have said.....kind of a lottery; Maybe you use those 2 losers as a chance to try to trade other stocks and try and hone the 'know the enrty/exit'. worst that happens is that you'll lose whats remaining, best case it reveals whether you can pick stocks and get in/out.
Peterpetrole said:
Hoofy said:
Peterpetrole said:
It's 90 quid
Yep, at this point it's like the OPer's got £90 in lottery tickets and there's a chance it could be worth nothing, a definite chance of £0 if he sells and a chance that this time next year he'll be a millionaire.
If it was £9000 or £90k then things would be different. Unless he's a multimillionaire.
Peterpetrole said:
There is only upside for that sort of stock.
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