MR B from Dublin 16 has held his Irish Permanent shares ever since he received his free allocation when the IP converted from a building society into a public company. As such, Mr B has done pretty well - his free shares are worth more than three times they were at the time of flotation.

Canny investors have held their IP shares, but Mr B is still a bit confused and has asked us to explain how the market works.

First, Mr B asks why shares rise and fall? This question is one that has stumped many a professional investor, never mind the amateurs. Share prices rise for many reasons - the state of the economy, the level of interest rates, the state of the industry a particular company is involved in, and any piece of good or bad news affecting a particular company. Good news and a good economy are good for share prices, the reverse is the case for bad news and a poor economy.

He also asks can shares be transferred to his spouse or children on his death? Indeed they can. Stocks and shares are considered as part of a deceased person's estate, and can be transferred to spouse and children in just the same way as other items in the estate.

He asks what factors should influence when he sells shares. On the assumption that Mr B only owns Irish Permanent shares, then a few things should be considered. Does he need the money right now? If he does then his IP shares could be worth selling. They are currently trading at their highest level since the company went public. The £540 worth of free shares he was given over two years ago are now worth around £2,000.

Most analysts believe that Irish Permanent shares are now well valued and the only factor that justifies them trading at their current level (around £6.20) is the possibility of a takeover bid. The British bank Abbey National already has a 10 per cent stake in Irish Permanent and is seen by many as a possible bidder some time in the future.

How do you sell shares, asks Mr B. Very simply - go to a stockbroker. If you don't know one, then get a list of stockbrokers from the Stock Exchange.

Since such a small number of shares are involved, our reader may want to consider going to one of the smaller stockbrokers who charge lower commission. That means any broker other than the "big four" of Davy, NCB, Goodbody and Riada, whose main business is servicing big institutional investors.

Mr B asks how to buy more Irish Permanent shares. Again, go to a stockbroker, but remember IP shares are not cheap at £6.20.

Finally, Mr B asks about the tax implications of owning shares. Income tax must be paid on dividends received, and capital gains tax will be liable if the value of the share price has increased at the time you decide to sell.