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Shares Funds A P/E Ratio FAQ Guide	Why Shares Move Why do shares move in value? When a share price rises by a few pence we take this as confirmation of our own good judgement. But when a share price suddenly slips, we immediately fear the worst. We are tempted to cut and run. Most of the time there should be no cause for alarm at an early stage as share prices oscillate for all sorts of reasons. Some are to do with market sentiment as a whole. There are days when market sentiment is so poor that share prices fall across the board. And there are other times when big 'sector shifts' take place. Such moves are indiscriminate. But there is plenty of trading in individual shares in which there is no implicit view of the company itself. Here are some of them: 'Churning'. There are many reasons why professional fund managers might sell shares and one is traditionally known as 'churning'. Some fund managers charge their clients 'per transaction'. So the greater the number of trades, the more income they get. This is a strong incentive to regularly sell some shares and buy others. Less reprehensible is the practice of selling for tax purposes - to either establish gains or losses. A New Fund Manager. Every day portfolios of shares are removed from the care of one fund manager and entrusted to a new one. And the first action of the latter will be to turf out any shares that he is not familiar with. And replace them with those of his own choosing. Inflows and Outflows. If you are invested in a unit trust, you can sell your units at any time. And when that happens the fund manager must sell shares in order to raise the cash to pay you out. If market sentiment is particularly poor, or if this unit trust has a bad record, there might be a steady stream of holders redeeming their units. Profit Taking. Any share that has risen will be vulnerable to profit taking. It is only good sense to bank some if not all of your profit after a good run. And if several shareholders decide to bank profits on the same day, expect the share price to drop.
	Introduction tutorial for the individual self-investor. Useful hints and tips beginning your first venture into trusts / shares. www.opentrain.co.uk/sharetips. Share tips, share tutorials, introduction to investing in shares and funds

Why Shares Move

Why do shares move in value?

When a share price rises by a few pence we take this as confirmation of our own good judgement. But when a share price suddenly slips, we immediately fear the worst. We are tempted to cut and run. Most of the time there should be no cause for alarm at an early stage as share prices oscillate for all sorts of reasons. Some are to do with market sentiment as a whole. There are days when market sentiment is so poor that share prices fall across the board. And there are other times when big 'sector shifts' take place. Such moves are indiscriminate. But there is plenty of trading in individual shares in which there is no implicit view of the company itself. Here are some of them:

'Churning'. There are many reasons why professional fund managers might sell shares and one is traditionally known as 'churning'. Some fund managers charge their clients 'per transaction'. So the greater the number of trades, the more income they get. This is a strong incentive to regularly sell some shares and buy others. Less reprehensible is the practice of selling for tax purposes - to either establish gains or losses.

A New Fund Manager. Every day portfolios of shares are removed from the care of one fund manager and entrusted to a new one. And the first action of the latter will be to turf out any shares that he is not familiar with. And replace them with those of his own choosing.

Inflows and Outflows. If you are invested in a unit trust, you can sell your units at any time. And when that happens the fund manager must sell shares in order to raise the cash to pay you out. If market sentiment is particularly poor, or if this unit trust has a bad record, there might be a steady stream of holders redeeming their units.

Profit Taking. Any share that has risen will be vulnerable to profit taking. It is only good sense to bank some if not all of your profit after a good run. And if several shareholders decide to bank profits on the same day, expect the share price to drop.

Introduction tutorial for the individual self-investor. Useful hints and tips beginning your first venture into trusts / shares.

www.opentrain.co.uk/sharetips. Share tips, share tutorials, introduction to investing in shares and funds