Advice on when to exit?

I’ve held my shares for a few years now. At some point some of them were up by 50% and I debated whether to sell or not, then they sat at -80% for many many months.

I always struggle with when to sell as I have the mindset that ā€œthey could go up even furtherā€ and I’d lose out… but the opposite usually happens.

Any advice?

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Sounds to me like you are suffering from Stockhold Syndrome. I too am a long term sufferer. My advice would be to have a clear plan of when you want to exit or at least take some gains.

Over time if should get easier the more you see the rise and then the missed opportunity when you are way back down again.

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Sell when you’re in profit or sell at a loss if you think this stock will not outperform the market in the future.

Then just invest it all in index funds and never sell. Saves lots of time and increases long-term performance significantly.

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Love it! I must have that too! :sob: :smile:

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Same here, only advice i would give people is to not follow my strategy, that way you should be fine !

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An undercut of a long term moving average like the 50 or 200 is always a good technical strategy for locking in profits.

Selling half is a good psychological win/win. If it drops further you can say ā€˜At least I sold half’, if it carries on higher you can say ā€˜At least I kept half’.

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One way to think about it: work out if missing out on future growth if you sold or experiencing a future loss if you held would be the larger future regret. And then act to minimise that.

As @SebReitz says, holding index funds will probably deliver better returns long term - you don’t have to be correct about which stocks to hold and at what price/duration, you just buy all of them.

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The most important question is- do you know why did you invest in those stocks at a particular price point? And a related question- do you know why you invested in those particular companies?

If the answers to both questions is yes, then has anything fundamental changed to the business that you’ve chosen? If no, then you may want to keep the stocks, unless you know that you way overpaid for them. Hint: check out Intel stock in August 2000.

It has never reached that ATH since then.

If you don’t know why you invested in those stocks and why at particular price points, then you were just trying a lucky guess, i.e. you were gambling. It’s ok though, I think that any investor made such mistakes initially. Treat it as a lesson for the future.

EDIT: Of course I meant Intel’s stock price in August 2000 :slight_smile:

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Just thoughts:

If you’re down on a position, think realistically about the recovery-maths:
For example, if your paper loss is 40%, you’ll need an upside of 67% just to regain nominal zero (assuming you don’t average down).
At 50% down, you’re obviously looking at 100%.
And so on…

Consider whether those kinds of Sinatra-like comebacks are likely within your remaining time-frame.

Flip that on its head when you’re up on a position and that’ll help you judge whether to top-slice (for later re-entry) or let it run.

Just my 2 cents, which has probably already dropped to 0.75 cents in real terms.

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Devil’s advocate but I really don’t like this school of thought.

If you know why you bought at a particular price then it doesn’t matter if you are 40% up or 40% down, the only thing that matters is whether that initial logic still holds and whether you believe it will still go up from today’s price.

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Agreed, if that logic remains realistic within your remaining time-frame.
The OP was asking about when to act.

As @DirkDickens said there are technical indicators. At the same time you can use a stop loss. Again there are techniques for selecting the stop loss value.
Best value is what makes you ā€œhappyā€. Happy that you sold before it went futher down or didn’t sell ( stop loss not hit) and price went up.

Down side is FT stop loss. At times it has a mind of its own :slightly_smiling_face:

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Yes. Don’t think you can game the market.

Its easy, when usa market goes up, chinese market goes down.

Another way to think of it is to take the current value - let’s say it’s Ā£500 - and ask whether you would invest in that company today if you had Ā£500 in your hand, or whether you would put it somewhere else.

And of course the answer will be yes because we all grow an emotional attachment to our past decisions :slight_smile:

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I take what i invested then let the rest go

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Take 80% out leave 20%in,

I tend to set a target price for stocks and sell when (if) it reaches that price. Though occasionally a stock will reach said price, and I then set a new target price.

Also, sometimes I change my mind on the investment thesis - if I have a stock that I no longer particularly believe in, but another that I do, I will sell and move onto the one I now believe in.

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