Before you start selling shares, it’s important to understand what they’re actually worth. Whether you’re offloading listed shares, inherited holdings, or older paper certificates, knowing the value ensures you don’t undersell or make decisions based on incomplete information.
Here’s a practical guide to help you determine the true value of your shares before you sell.
Identify the Type of Shares You Own
The first step is understanding what kind of shares you have.
Listed Shares (Public Companies)
- Traded on stock exchanges like the ASX
- Prices fluctuate throughout the day
Unlisted Shares (Private Companies)
- Not publicly traded
- Valuation is less straightforward
Historical or Paper Shares
- Older share certificates
- May require additional research to confirm ownership and value
Knowing the type of shares determines how you’ll calculate their value.
Check the Current Market Price
If your shares are listed, the easiest way to value them is by checking the current market price.
How to Do It:
- Look up the company ticker on the ASX or financial websites
- Check the latest trading price
- Multiply by the number of shares you own
For example:
If a share is trading at $10 and you own 500 shares, the value is $5,000.
Keep in mind that prices can change quickly, especially in volatile markets.
Understand the Bid vs Ask Price
When researching selling shares, you’ll often see two prices:
- Bid price: What buyers are willing to pay
- Ask price: What sellers are asking
The actual sale price usually sits somewhere between these, depending on market conditions.
Consider Brokerage and Fees
The value you see isn’t always what you’ll receive.
Common Costs:
- Brokerage fees
- Platform or transaction fees
- Currency conversion (for international shares)
These costs reduce your final return, so factor them in before selling.
Review Company Performance
The current price is important, but understanding the company’s performance provides context.
Look At:
- Recent financial results
- Dividend history
- Industry trends
- Company announcements
This helps you decide whether now is the right time to sell or if holding could be more beneficial.
Valuing Unlisted Shares
Unlisted shares require a different approach.
Common Methods:
- Reviewing company financial statements
- Comparing with similar businesses
- Seeking professional valuation
Because there’s no public market price, valuations can vary significantly.
Check for Dividends and Entitlements
Before selling shares, check if you’re entitled to any upcoming benefits.
Examples:
- Dividends
- Bonus share issues
- Rights offerings
Selling before a key date may mean missing out on these.
Confirm Ownership and Details
If you have older or inherited shares, make sure everything is in order.
Steps:
- Verify ownership through share registries
- Ensure your details are up to date
- Consolidate multiple holdings if needed
This avoids delays when you’re ready to sell.
Consider Tax Implications
Selling shares can trigger tax obligations.
Key Considerations:
- Capital gains tax (CGT)
- Length of time you’ve held the shares
- Any losses that can offset gains
It’s often worth speaking to an accountant before selling.
Timing the Sale
Value isn’t just about the current price, timing also matters.
Factors to Consider:
- Market conditions
- Company news or announcements
- Broader economic trends
While it’s difficult to predict the market, understanding these factors can help you make a more informed decision.
Final Thoughts
Understanding the value of your shares is a crucial step before selling shares. From checking market prices to factoring in fees and tax implications, taking the time to assess your holdings properly can make a significant difference to your final outcome.