After all, you buy shares in the expectation they'll give you a good income, go up in value, or both! But how do you know when to take your profit - or cut your losses?

Here are our ten tips on making your decision.

The best way to know when to take a profit is to set a target level at the time you buy.

It's all too easy to hang on in there, thinking a price will keep going - but at some time it's going to stop. Setting a target doesn't mean you have to sell - but it's a reminder to take a fresh look at the company. And remember you haven't made a profit on a share until you've sold it - a paper profit isn't worth the paper it's written on!

We can help you manage the timing of your sales by using Limit orders and Alerts with your online account.

Nobody likes taking losses, after all it means we got the initial call wrong - but better to cut your losses than lose it all.

As with deciding when to take a profit, setting your loss level at the time you buy can save a lot of agonising later on. Again, you don't have to sell, but you should take a realistic view - what will reverse the current trend, and how likely is it?

Look at it this way - taking a loss means you can use the remaining capital to find a new investment.

Setting a Stop-loss Limit means you'll automatically sell if a share price falls to a level you specified. Or use a Tracking Stop-Loss Limit and protect profits you make as a price rises and then starts to fall back. Find out more in Limit Options. And if you just want to be notified at a certain price, use an Alert instead of a limit order.

Sometimes a share price won't move for many months after you have bought it - just because it is recommended as a buy doesn't mean it will automatically rocket in value. For example, if the tip is based on the planned launch of a new product, the market might not react until the product is actually live and selling well; so when the price does react you'd have benefited from getting in early.

As long as the fundamental reasons for buying the share in the first place still remain, then hang on - but, as always, ensure you keep an eye on it .

A few years ago it seemed you could buy a share and keep it for life ('you'll never go wrong with Shell', for instance). Today, many would argue that this is no longer the case. Why is this?

Competition in most sectors has increased and, inevitably, some companies are better at adapting and moving with the times than others. Just because a company was a Blue Chip a few years ago doesn't mean it always will be (look at Marconi and British Energy, for instance).

You should periodically review your shares - we'd recommend you take a look at least every 2 or 3 months - to ensure that the companies you've invested in still have the positive attractions they had when you bought them.

Keeping an eye on the news is very important - you won't catch everything but reading the financial pages and logging on to your favourite websites is a very good idea.

To help, our Company Research facility gives you news headlines and we also feature companies in the news in our Market news section. If you follow the tip in a particular paper then look out for updates - often they'll follow-up on previous recommendations. If their opinion changes from a buy to a hold or sell check out why.

Our advisers can help you decide whether or not an item of news is likely to be good or bad for your shares.

You would think that a Director selling shares in a company means that something is seriously wrong, but this is not always the case. There can be all sorts of reasons behind Directors' selling, often not related to how well the business is performing.

In some cases, Directors are under certain restrictions when it comes to dealing, and can often only sell certain amounts at certain times. Sometimes a good run in the price can lead a Director to take advantage of this and sell simply to lock in a bit of profit. One famous case saw a Director forced to sell a large amount of shares in his company to pay for his divorce!

The other side of the coin could be that a Director believes the future is far from rosy, so take note, particularly if multiple Directors are selling. The important thing is to understand why and make a decision from there. Look at the company's performance figures and check out the news for corroborating evidence. If there are signs of worsening performance or storms ahead, and directors are selling it may well be time to follow suit.

Although past performance is not a guide to future performance, it can be possible to identify trends, which may give you an idea of where the price may go. 'Chartists' will tell you that everything can be discerned from the trends, and specialist books and newsletters have sprung up to meet investors' desires for information and analysis using this approach.

Trends come in many shapes and guises - the one most investors think about is the share price -and the share price chart is the backbone of Chartism. The easiest trend to spot is where the share price moves within a certain range - never falling below a particular point and never rising above another. If this applies to one of your shares, as the price moves near its traditional high it might be a good opportunity to sell.

But other trends play a part too - seasonal consumption patterns, a gradual shift from one technology to another, changing consumer habits… all of these need to be considered when deciding if the time is right to sell.

It may sound obvious, but when you've a set amount to invest, you need to use it to best effect. So if you find a share with the prospects to perform better than one of your existing shares, switching makes sense.

Yes, you do need to bear in mind the cost of doing so - dealing commission, stamp duty on the purchase and potentially CGT - but allocating your resources wisely is paramount. If you hold onto a share it stops you using that money to invest elsewhere.

If the market and advisers are recommending you to sell, but you still like the company, don't forget you can always buy it back again later.

Things may have gone wrong for the company in the short term, and, for example, a profit warning can hit the share price hard. At this point, it may be worth selling before the price falls further. But if it really is a company you like, with good reasons, keep an eye on it - it may turn and you could buy back in again at a lower price.

Set up a limit purchase order with your new target price and if the price gets to that point you'll automatically buy back in.

Wherever you get your news and views from, bear in mind it often represents one person's perspective. So first of all, make sure you can tell what's a fact and what's an opinion. Of course even the facts are open to interpretation - one man's 5% rise in sales is another's 5% fall in 'like for like' sales!

Newspaper tips are, all too often, too late - by the time they are published and read, the news is already reflected in the share price. So even though you might follow your favourite tipster's latest idea, you should still do your own research.

To see the market's view, look at 'What the brokers say' on the company information page accessible through Company Research and keep an eye on our Market news too.

And for the latest information call our Advice team - the latest news, views and insights available free from our resident experts. (Calls to the AdviceLine are charged at your normal call rate.)