So, I’m just interested in the strategy of long time investors on when to sell.
I started investing with the aim of long term, but as I was finding my feet, I over-invested in tech stocks and not enough in ETFs. I’m gradually increasing the percentage of ETFs in my portfolio, although my plan was to just hold the stocks for a long time too and continue buying into them at a slower rate so they make up a smaller percentage over time.
Some of the stocks in particular have had occasional incredibly high days and I’ve resisted selling, only to see them return back to their regular levels and crash in the last week. One example is NVDA, where I started buying in at 510, it reached a peak of 645 which was something like a 15% rise in a week, and it’s been downhill from there. Ironically, even at it’s current 550, it’s still better than it was when I started investing, but as I’ve been dollar cost averaging in each day, my actual average is about 575 so it’s an overall net loss.
While I think it’ll recover in the long time, I also feel like I was stupid not to cash in my gains on the day when it was unusually high, because I kind of knew at the time that it was overpriced then. In fact, I didn’t buy in more that day, but still didn’t want to sell. But I should have known it would be corrected soon enough, but didn’t trust my judgement enough.
I know the general philosophy of knowing what you think it’s worth and buying if it’s below that and holding otherwise, but I’d be interested to know if people have an exit strategy for if something grows too much too quickly. I’ve read articles from “professional traders” who I guess have a different aim, but who talk about exiting on a 10% or 12% gain or loss, but I’m guessing that’s assuming a strategy of buy once, hold, sell once.
Does anyone else cash in on the highs with the stocks they’d like long term? Or are all the long term investors here just “hold, hold, hold, it’ll recover eventually”?