Reinvesting Gains

How do you reinvest gains on stocks not in the pie without selling the whole Investiment. I am looking to maximise on compound interest

Thank you for your help

Stocks can imported and exported from pies. But I am not sure what you mean by reinvesting gains.

I think I know what you’re asking; just export a portion of what you want to sell.

Then sell from your normal investment section

Let’s say I have bought Tesla for 10k and have now made 1x so now I want to release that 10k to reinvest

No just release gains so I can either buy same stock or a different one so I am earning on my gains

But your gains are already reinvested in the stock. It makes no sense to sell 10 shares to realise gains which you use to repurchase about 10 shares once more.

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But now don’t have 20 shares together compared to the 10 in the start ???

Sorry just trying to see how best to maximise earning by compounding

No, you still have 10 which are worth more than when you purchased them.

To “realise the gains” you need to sell the shares, so you would end up selling (for example) 5 shares to realise the gains… but then you only have 5 in total and you now need to buy the shares back at the higher price. so you are effectively gaining nothing (and probably actually making a small loss because of the difference in buy/sell price, and taxes depending on the stock you buy).

It only makes sense to sell the shares if you either want to reinvest the money in a different stock which you feel will perform better, or you want the cash.

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What about if I sell 50% and take the gains to another stock and that’s starts earning as well. Overall I am going to be better off ?

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You may and you may not, I would strongly suggest you to have a better and clearer understanding of the compounding interest first. Check some videos on YouTube and also read something on investopedia for example the below:

https://www.investopedia.com/terms/c/compoundinterest.asp#:~:text=Compound%20interest%20(or%20compounding%20interest)%20is%20interest%20calculated%20on%20the,on%20a%20deposit%20or%20loan.&text=Interest%20can%20be%20compounded%20on,continuous%20to%20daily%20to%20annually.

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I understand the concept which exactly happens in CFD where realise gains reinvest wanted to do the same with the invest side

Nope, you didn’t get it based on your questions.

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That depends entirely on how the other stock does. But you need to remember you would then own 50% less of the original stock, so that then won’t “do as well” in terms of profits because you don’t have as many shares as you did before.

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BIIIIIG old thread on this subject right here;

I’d suggest you read through it all to get a full understanding.

Admittedly I couldn’t get my head round certain aspects of it, myself, but it all eventually became clear.

Give it a read. :+1:t2:

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If you own one share that is worth 1,000 for example. That share the next day goes up 10% so you will have 1,100 compounded 1,000+100. The next next day you will have 1,000+ the new increase % , so it is compounding already. If you sell the profit you will be compounding from 1,000 again, with less shares. The number of shares is unimportant at this point, what counts is the total amount invested. At the end you can choose to sell some and invest it somewhere else or just leave it compounding there untouched. Compounding means adding up not trimming down. However, again it’s your choice.

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Without confusing you. If you want compound gains to work for you.

  1. Invest in a company
  2. Let that investment grow and do nothing
  3. Deposit more capital and add more funds to you’r investment

Repeat

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Touché :ok_hand:… 20 characters

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How is it compounding though? I get what the OP was asking and have been wondering the same.

I have a maxed ISA, so I cant deposit anymore money in till April. Say I invest £1000 in 20 stocks, result is a maxed ISA. Those all gain 10%. That is unrealised profit sat there doing nothing. It can fluctuate, but the green figure, is always based off of my £1000 investment. Its just telling me on any given day, what that £1000 is now worth.

If you take the profit out, ie. sell what that £1000 has gained, lock in the return, then the stock dips, and you can buy in again, thats the only way to buy back in without devaluing your original stake. (since you cand add any more money to a maxed ISA)

So say one of these £1000 increases to £1500, what Id like to do, is sell enough stock to get back to £1000, and take that £500 and put it to work on another stock. That was I have £1500 invested and working, rather than £1000 invested + £500 unrealised gains.

Correct me on any of this if it is wildly off. Ive been asking a lot of people about this recently and its kind of key to where my ISA is right now, and some decisions I need to make soon.

You can do that. When you sell £500 of stock the cash proceeds remains in your ISA and can be reinvested as you like. It does not count towards the £20k pa deposit limit. The limit only applies to new money being added from outside the ISA.