A recent survey by Axa has found that many small shareholders hold onto their holdings for emotional rather than rational reasons! Twenty one per cent of those questioned said that they owned shares in a listed company, with 28% of these holding onto the shares for three years or more. Almost thirty per cent of these people said that they have kept the shares because prices have fallen and they want to wait to recoup their original investment, or because they are worried about selling at the wrong time and missing out on profit. Twelve per cent said that they have kept their shares for three years or more due to shareholder perks, and 7% said that they were left them by friends or relatives and do not want to sell them for sentimental reasons.
Lost share certificates account for 1% of investors, and 4% said that they have no idea why they have kept their shares!
Our view
Holding shares for most people is just another sort of gambling rather than strategic investment. We ask many clients if they actually read the Company's Annual Report and Acounts for the shares that they own and if they did read them; did they understand them? Many say no and this is why we suggest most people should not hold onto shares. In addition, they are for many actually not tax efficient. Book a callback for some advice on your shares.