If the majority of investors, no, correction, active investors lose money, what chance do you have if you are an inexperienced investor? Well in a bull market making money is relatively simple buy a share and the rest of the market will probably drag it upwards. Now the savvy investors who subscribe to all the information services and have read all the books and use a service like Stockopedia will likely make more because they are basing the investment on a number of rules but quite often the most important rule is missing. When to Sell...

Some years ago I advised a couple of clients / friends who by accident came across someone who had developed an accounting software program, and he needed finance. SAGE was primarily designed to help Printers do their own bookkeeping. Initially it failed to attract enough customers, but by this time my friends had closed down the print shop because of constant Union troubles, so were left with no option but to make SAGE work. By hard work, which often leads to good fortune, they came across a company called Amstrad and the MD, one Alan Sugar, wanted a giveaway accounting program to help sell his new personal computer, and the rest as they say is history. 

Now I was too busy or blind to take advantage of the situation, my job was to help other people invest money, but my friend John bought £10,000 pounds worth of SAGE shares when they floated on the junior market and when they fell by 50% he bought another £10000 worth, all with borrowed cash. In 2000 I pleaded with him, not for the first time, to sell his holding, now worth £3 million, but he didn’t want to pay the Capital Gains Tax. They fell when the Dot Com bubble burst he lost 75% of his gain but held on and now he is back to about £1.5 million plus his dividends and profits realised from the annual sale to cover his CGT allowance.

 John is an investor he buys and holds and he has turned £20,000 into £1.5 million plus an attractive income. But would he have sold if I had allowed him to look into the crystal ball in 2000, he would have paid £1.2 million in tax and have been left with £1.8 million to invest elsewhere, he would have spread his…

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