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Repair Windows errors before they cause bigger problemsFix Now →Fix the driver behind crashes, sound loss and screen glitchesFind Drivers →Don’t decide to hold or sell based only on the share-price fall. First check what has changed at the company, then reassess whether the investment still fits your goals, timeframe and ability to bear a loss. Also consider how much of your portfolio depends on this holding and check the costs and tax consequences before you act. A fall may reflect short-term volatility, but it can also accompany worsening company information; no general rule can tell you whether a particular share will recover.
Start with the facts, not the purchase price
Confirm the number of shares you own, your purchase details and the current value using your account records. Then look for relevant company results and announcements. ASIC Moneysmart recommends keeping investment records and checking reports and announcements for listed companies. Its guidance also suggests a six-to-twelve-month review can be a useful starting point for long-term holdings, but a material announcement may warrant attention sooner. ASIC Moneysmart’s investment-tracking guidance
A share price moves as investors respond to information and buy or sell. Don’t assume the cause of a particular fall from the chart alone: check company disclosures and consider whether broader market or sector conditions may also be involved. ASIC Moneysmart explains share-market volatility.
Check whether the company’s outlook has changed
Compare the latest information with the reasons you bought the share. Read the company’s results, annual report and ASX announcements, and consider what they indicate about:
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- debt and cash flow; and
- the outlook for dividends, including whether they may fall or stop.
A lower price does not, by itself, establish that a share is good value or that it will bounce back. The question is whether current information still supports your original investment case. ASIC Moneysmart outlines these research considerations in its guide to choosing shares.
Reassess whether the holding still suits you
Even if the company outlook has not changed, your own circumstances or plans may have. Consider when you may need the money, how much loss you could tolerate, and whether the share still fits your goals and intended portfolio. ASIC Moneysmart describes shares as a long-term investment, using at least five years as an overview timeframe; that is not a guarantee of recovery or a reason to keep an unsuitable investment. Share prices can fall quickly, and dividends may fall or stop. ASIC Moneysmart’s guide to choosing investments
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Consider concentration across your portfolio
Check whether this holding, its industry or the Australian market accounts for an outsized share of your investments. Diversification across companies, sectors, countries and asset types can reduce the effect of one poor performer on a portfolio, but it cannot prevent this particular share from losing value. ASIC Moneysmart explains investment diversification.
Compare your options without using an automatic sell trigger
There is no evidence-backed percentage fall that automatically means you should sell. Instead, weigh the current company disclosures and fundamentals against your goals, timeframe, ability to absorb a loss, portfolio concentration, and the costs and tax implications of a sale.
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Holding leaves you exposed to future changes in the company and share price. Selling may limit further exposure, but if you sell below your purchase price you realise a capital loss. Neither choice guarantees a better outcome. Avoid treating the original purchase price as proof of what the share is worth today.
Check brokerage and tax before selling
A sale may involve brokerage, and tax treatment depends on your circumstances. Selling below what you paid can realise a capital loss that may have tax relevance; this does not establish the tax result for your situation. Dividends and realised gains may also have tax consequences. Check your records and current details, and get individual tax advice if you are unsure. ASIC Moneysmart’s guide to buying and selling shares
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Get personal advice if the decision is unclear
If you cannot tell whether the investment still fits your needs, a licensed financial adviser may help you understand your options or build a diversified portfolio. A generic online tip or short-term price target cannot account for your individual circumstances. ASIC Moneysmart discusses seeking help in its guidance on share-market volatility and diversification.
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