Profit taking and reinvesting

I dont know if im being stupid but i cant get my head around this.

What i am thinking is planning on take some profits of a few stock that i hold as they are up a bit and then use that money to reinvest in them and buy the dip but i calculated this for SSE for example planning on selling 8 shares at 16.71 for 133.90 and then say later rebuy at 15.45 ish i would still end up getting 8 shares back.

So my question is there any point in selling??

You can’t time the market like that. Seeling high, buying low. Otherwise everyone would be a gazillionaire.

It depends on the amount you have invested if you could buy more shares for UK stocks. For US stocks you have fractional shares where this would increase the amount of shares you hold.

If you could predict the market like this, there would be profit in selling and rebuying (depending on amount and availability of fractional shares).

3 Likes

The stock may never be as low as £15.45 again… plus on this stock your paying 0.5% stamp duty each time you buy.

I don’t know the stock, but it looks like it pays a decent dividend… going in and out of the market could lose you that dividend payment unless you time it right.

If it was a stock choice of mine - I would keep it and buy additional shares when I could afford too and preferably when it’s dipped a little.

Good luck :slight_smile:

2 Likes

To reframe your question it could be “how much profit should I leave as paper gains?”

It’s not a simple answer as I’m sure there are loads of Tesla holders (including me) who took money off the table far lower than it is today. I’m happy with my decision, I did it to lock in some profit - if it dipped I might have re brought but it’s impossible to know.

In the long run you’re better to “let your winners ride” but this is suitable for everyone’s portfolio or risk appetite.

1 Like