How to take profit

Hi guys not sure if this is best place to ask as I’m new on the platform. Just wanted to know if I say brought £100 of say amazon just for a example and share goes upto £120 in total after £20 profit how do I get the £20 profit and still hold the shares? Or do I have to sell all the shares and buy again? Cheers

Hi,

‘Taking the profit’ probably oversimplifies the world you’re in now. If you sell and re-buy you’d be paying the same price for the share again. So in your example. If you sold your £120 share, you’d be re-buying it at £120 anyway. Unless you held out for it to drop in price again, but that’s a specific type of investing…

Ultimately, you won’t normally see profit until you decide to sell up your shares, take the cash, and sail off into the sunset .That’s the long term method.

There’s other short term methods, but that’s a complicated system beyond the scope of a forum explanation…

Hope that makes sense?

Just sell £20 of AMZN. You will be left with fewer shares, but they are valued at £100… for now. You can spend the £20 on whatever you like. Just don’t spend it on AMZN shares!

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Okay so let’s take a look at gains, there are two types of gains: Realized and unrealized (will elaborate in a minute).
Then you have your account: deposited amount and current value.

The real gains (profits) come from the difference between the current value and what you deposited into the account, all things essentially have this as the end goal. The current value is cash + worth of investments.

Now let’s take your example and you have an account value of £120, which entirely consists of Amazon. You could sell £20 worth of amazon, account value doesn’t change but you realized your gains. Realized gains are gains which come back in the form of cash (so selling or dividends etc.), unrealized gains are changes in worth of your investments. Whether you realize your gains, in this case, won’t affect your current account value (if you sell £120 of amzn, sell £20 amzn or keep everything in stocks, account value wouldn’t change). So selling stocks only moves the money in current value from investments to cash, without actually changing account profits.

So to answer your question you already got your profit, your shares went up in value so you can sell them for more. Selling and then rebuying (realizing your profit) won’t really have an effect (maybe taxes don’t know UK tax system) aside from making the percentages look diffrent (portfolio value doesn’t change so in the end it doesn’t matter). You could see it as: you have £120 would you buy £120 of Amazon with that currently, if not then change allocations.

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Thanks guys that’s a great help thanks

I was told that I have to constantly sell my stock then reinvest it to "lock in" profits. Is this true? Reminds me of this classic.

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oh god, don’t resurrect that horror show :sweat_smile:

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ah the classics, we really should have a collection of some sort for those kinds of threads :rofl:

Welcome to the community :grinning_face_with_smiling_eyes: the best lesson I learned in trading was not to get emotional. Get your game plan sorted so you know wether your going to trade daily, weekly, monthly etc. Once you have that sorted your half way there. Stocks go up and down everyday, it’s where your going to sell and buy back in at a lower rate that your going to hold the same amount of shares but will have locked in that profit. If compounding you can add in and repeat the process and if like myself you take bigger risks than you should, always have a back up plan. Mine is a bottle of whisky and, a mirror to tell myself “not this again” before drowning my sorrows and doing it all again the next day

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Thanks It’s been a big help, sorry if its been asked a million times before lol I’m new to trading 212 so I didn’t know, cheers anyway

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