Why deal in shares at the moment

[falcemob]

With all the doom and gloom in the city at the moment why are people still trading so many share? There appears to be higher volumes of shares dealt at the moment than this time last year.
With the market being so depressed why are people selling when prices are rock bottom or they will hit rock bottom becaues they sell? I have shares that are not worth a fraction of what they were a year ago but hopefully they will still pay some form of dividend neaxt year and I would not dream of selling while they are so low, rather wait in the hope they will pick up in the future which on past form will happen.

[Chilli]

The sellers have decided if they sell now, then they will at least get some investment back, whereas if they left it, then they could end up with very little...basically cutting their losses.

[youngsyr]

falcemob said:

With all the doom and gloom in the city at the moment why are people still trading so many share? There appears to be higher volumes of shares dealt at the moment than this time last year.
With the market being so depressed why are people selling when prices are rock bottom or they will hit rock bottom becaues they sell? I have shares that are not worth a fraction of what they were a year ago but hopefully they will still pay some form of dividend neaxt year and I would not dream of selling while they are so low, rather wait in the hope they will pick up in the future which on past form will happen.

The answer is simple really, the markets are extremely volatile with large drops and rises each day. If you buy enough shares at the start of one of these intra-day rises and then sell before the drop, you can make a significant profit even if the overall share price trend is downards.

Edited by youngsyr on Friday 10th October 19:12

[Jasandjules]

falcemob said:

With all the doom and gloom in the city at the moment why are people still trading so many share? There appears to be higher volumes of shares dealt at the moment than this time last year.
With the market being so depressed why are people selling when prices are rock bottom or they will hit rock bottom becaues they sell? I have shares that are not worth a fraction of what they were a year ago but hopefully they will still pay some form of dividend neaxt year and I would not dream of selling while they are so low, rather wait in the hope they will pick up in the future which on past form will happen.

Market Makers HAVE to buy and sell, they have to offer a price at all times. So certain shares (namely FTSE) will always have a market.

Others will be able to buy now and wait until they go back up (at least, that's what they hope) then make a killing.

Others still will be selling like crazy, which sends the price down, so they are victims of their own making.

[FourWheelDrift]

I'd corner the market in frozen concentrated orange juice now if you can. Mr Beeks is never wrong.

[told_you_so]

I think the comment about waiting for them to bounce and return to a higher level is very naive.. I think there has been a fundamental change in the financial system which could take years if not a decade to iron out..

Waiting for a dividend of a stock which might represent a return of 5-7% whilst your capital could drop by 30-40% also seems a little daft. particularly as a dividend distribution relies on good profitability.. I'm not sure there will be a huge amount of that around.

As my old boss used to say regarding falling prices and buying them purely as they were cheaper than they were last week ..

" remember they can keep going down all the way to zero... "

[falcemob]

told_you_so said:

I think the comment about waiting for them to bounce and return to a higher level is very naive.. I think there has been a fundamental change in the financial system which could take years if not a decade to iron out..

Waiting for a dividend of a stock which might represent a return of 5-7% whilst your capital could drop by 30-40% also seems a little daft. particularly as a dividend distribution relies on good profitability.. I'm not sure there will be a huge amount of that around.

As my old boss used to say regarding falling prices and buying them purely as they were cheaper than they were last week ..

" remember they can keep going down all the way to zero... "

Well I already know my capital has dropped 30-40%, probably nearer 75% if I were to take the trouble to work it all out. Like I said, I can wait and see if they go back up again rather than cut my losses now, after all I can take fk all now or wait and see if my capital increases and still get the dividends in the mean time, after all the companies are still trading and making a profit.

[told_you_so]

true.. I see your point and do sympathise with you.. not easy .. however

just remember...

" they can keep going down.. all the way to zero.. "

[Loafer]

A lot of forced selling from the funds right now. We are getting margin called every day and the brokers keep asking for more haircut and getting picky on what we can send them as collatral right now they are only taking cash or gilts.

Add on top of that massive client withdrawals and you get alot of shares being sold at what ever price they can get.

[falcemob]

told_you_so said:

true.. I see your point and do sympathise with you.. not easy .. however

just remember...

" they can keep going down.. all the way to zero.. "

Yep, but I've always known the stock market is the largest bookmakers in the world so it's a gamble I'll take as I have no other real option at the moment. We are not talking amounts of money that will now cause me to lose sleep over even if the shares do fall to zero, and I've suffered that before anyway.