Selling Shares – Tips on Getting the Best Price Possible

When selling shares, the investor should always look to obtain the best price possible. This appears self-evident, but it is surprising how many investors allow other considerations to affect their judgement, and end up selling for a worse price than they could have obtained, or even worse hang on to their shares long after the optimum time to sell, tying up their capital when it could be used more effectively elsewhere. It is important to note that getting the best price does not always mean making a profit: though of course the provision of income is the primary reason for investing in stocks and shares, it is essential that profitability is considered with respect to a portfolio of investments rather than individual stocks. It is possible that to make a profit across the share portfolio it may be necessary to dispose of an individual stock at a loss. Despite this, it is of course desirable to make a profit on individual share deals, and there are a number of ways to achieve the best price possible.

Perhaps the most important factor is for the investor to ensure that he or she has an intimate knowledge of the company in which the shares are being traded. Selling shares in a company without information on its products or services, financial performance, research programs and other related areas can be compared to a person crossing a busy road with their eyes closed: they may get to the other side unscathed, but it will be a matter of pure luck and a bad outcome is the more likely result. There are a number of questions to consider when assessing the best time to sell:

• Is the company due to announce better or worse than expected financial results?
• Is a new product or service about to be brought to the market that could increase profitability, or has too much money been invested in a product that will not gain sufficient market share?
• Is the company expanding and hiring new staff, or is it undergoing a period of retrenchment in employee terms?
• How does the board of directors regard the future of the company?
• If they are positive, are their positive words backed up by personal investment in the company?
• Are the directors selling their shares?

All of these questions and many others should be researched before deciding when to sell.

Aside from issues surrounding the company itself, there are a number of external factors that must be considered when selling shares. How is the share performing in relation to the wider market? Have other shares, for instance, recently started to rise while it has not? Is any national or international event imminent which may have an effect on share prices, either the one being sold or share prices in general? An obvious example here is that it would have been much better to have sold banking shares before the recent financial crisis erupted. While it seems no-one suspected the full extent of the crisis, many investors unloaded their banking shares due to their opinion on the unsustainable business models of the banks, and avoided heavy losses as a result.

Share Trading Facts:

These points give a cue to traders as to where prices will head for the day, prompting each trader where to enter his trade, and where to exit.

Beyond these costs are the opportunity costs of money and time, currency risk, financial risk, and internet, data and news agency services and electricity consumption expenses - all of which must be accounted for.

Although many companies offer courses in stock picking, and numerous experts report success through Technical Analysis and Fundamental Analysis, many economists and academics state that because of the efficient-market hypothesis it is unlikely that any amount of analysis can help an investor make any gains above the share market itself.