The External Approach

e chosen for buying and selling by various methods:

i following advice,

ii analysis of track record (known as 'fundamental analysis'),

iii criterion selection.

The selection process needs to consider risk and need. At its simplest, the greater the risk you are prepared to take, the greater the potential gain. Your money could grow three- or four-fold in a year, or you could lose the lot.

If you want safety, you can buy a unit trust or shares in a safe but unspectacular company like Marks and Spencer. If you want risk, you can try a small company, perhaps a penny share, or provide venture capital or buy traded options.

Before committing your money to any investment, it may be worth trying a 'dry run'. A dry run should be done for at least ten weeks, preferably longer. If you cannot wait that long, then put some of your money (no more than a third) into a unit trust or 'blue chip'company and monitor that as well as your dummy investments.

In a dry run, you apply your judgement to a share portfolio without actually buying the shares and see how your 'investment'would have done. Thus you gain the experience without risking any money.

Selling a stock is fraught with negative emotion. Even if an investor has made a profit, locking in that gain for fear of losing it often drives the sale.



Offloading a falling stock is even harder since it involves admitting to a mistake, giving up all hope the investment call will come good, and crystallising a financial loss.



'Most people find it much easier to buy than they do to sell, often ending up with portfolios with too many holdings to be manageable. The decision to sell can be much harder to make,'says Danny Cox, head of advice at financial services firm Hargreaves Lansdown



“Selling a stock is fraught with negative emotion. Even if an investor has made a profit, locking in that gain for fear of losing it often drives the sale. Offloading a falling stock is even harder since it involves admitting to a mistake, giving up all hope the investment call will come good, and crystallising a financial loss.”



“Most people find it much easier to buy than they do to sell, often ending up with portfolios with too many holdings to be manageable. The decision to sell can be much harder to make,” says Danny Cox, head of advice at financial services firm Hargreaves Lansdown



Read more: https://www.thisismoney.co.uk/money/investing/article-2231699/When-sell-shares-Five-reasons-purge-portfolio.html#ixzz2GttRnMyC

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• Demack on How To Develop A Vision To Ensure Success - People's Perceptions
• Demack on The Quantum Jump Approach

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