When is the right time to sell?

Investing and Markets šŸ“ˆ
#2

Thatā€™s great to hear.

In terms of to sell or not to sell. I think itā€™s going to come down to how youā€™re investing and what your goals are.

So for example. Why are you invested in that particular stock?
If itā€™s for a long term investment, i.e. you believe the company will continue to do well for many years, and, you donā€™t believe you are over exposed in that one particular company. Then there might be no reason to sell the stock.

You might on the other hand, believe the the company will continue to do well but not as well as it has maybe, and maybe you feel your over heavy on that stock, and maybe you have other stocks which you think are undervalued and are going to do well that you wan to invest inā€¦

then maybe you might consider selling some. Or maybe you just want the cash?

Depends on what you goals are with that stock.

Personally, I have bought and sold stocks. But usually when ive sold stocks itā€™s because I decided I really washy invested in them mentally, and didnā€™t actually have a goal for why I even had them in the first place. So some made money, and I sold.

But most of my current stocks I have no plan to sell any time soon. Most produce income, and some are growth where I see potential with them. I think with growth stocks, if I felt they had reached a particular goal I might reduce them, but probably not sell all of them.

All that is to say, my suggestion would be to consider what your goal is with those particular stocks. Have you reached those goals? do they need reevaluated? do the goals still apply and you should or shouldnā€™t sell. If youā€™re worried about losing your gains, what is making you believe the companies are going to do badly in the future? Is it valid, or an irrational fear for example.

not sure that helps :smiley:

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#3

I have to say Iā€™m very impressed to hear you are 100% up on some stocks, I always think Iā€™m doing well if Iā€™m 20% up!

I learned a very hard lesson when I thought National Grid was a good price several months ago, about Ā£11.53, so I sold all of them, then over the course of months the price went up to over Ā£12.40!

So now, I sell in increments. Taking British American Tobacco as an example, I had 70 shares with around Ā£32.70 as an average. Price went up to Ā£36, so I sold 5 of them, price then went up to about Ā£36.10, I sold another 5. As the price went up further, I sold them in increments until the price stopped going up, by which point I had 25 left. If the price drops to any great extent Iā€™ll top up again and if it shoots up Iā€™ll sell. This turned out to be a good strategy because whereas BAT was hovering between Ā£34 and over Ā£36 for many months, itā€™s now struggling to stay over my average.

So in short, what I do is sell in batches so that I still have more to sell if the price goes up again, or I hold them if the price either remains the same or goes down. Obviously this doesnā€™t apply to all stocks, if they have a dividend of 8%, then Iā€™ll not sell them if they are 5% up for example. I would tend to only consider selling if they are over 20% up and I didnā€™t think they had a huge amount more to rise.

Today Iā€™ve sold batches of Pets At Home and Global Clean Energy ETF at almost 25% profit and Iā€™ve still got some left for if the price goes up further.

Hope this helps :smiley:

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#4

@Eden @1anrs thank you for your advice. I have been stung with this a few times, Atome Energy I was up 87% and held and now Iā€™m down at 10% this has happened a few times, so itā€™s whatā€™s making me sit here and think should I be selling.

I had planned on holding longer term but now have the cash ear marked to use at some point and Iā€™m worried about everything crashing again. My worry is with TPI composites, who Iā€™m up 104% with, a few years ago there was a similar rise and the shares shot up from $12 to $70, Iā€™m going to be kicking myself if I sell out too soon. I only have 10 shares so offloading some is not really appealing. Itā€™s so hard to time these things and Iā€™m so bad at letting go of any shares, I seem to have major attachment to my portfolio!

Appreciate your thoughts and I think Iā€™ll just need to see what happens with the share price over the next few days and then take the plunge and sell or make a decision to hold. Iā€™m amazed Iā€™m up as well, I had a really bad few months there, so Iā€™m amazed to see such good profit with a few of my shares now. Thanks for your help.

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#5

I think youā€™ve already answered your own question.

If the value of these shares when sold is earmarked for cash use in the near future, and your unsure about the companies future, or how stable it will be then a low risk cautious approach would be to sell and put the cash aside into a stable interest or dividend paying container until youā€™re planning to use it.

Its also not just about numbers, if itā€™s causing you stress because of your future use of it, then that may also be a reason to sell it.

One thing to note, if you do decide sell the stocks to put it aside for this ear marked use. If the share price continues to go up, this isnā€™t a failure. The goal of the value of the stocks is not to continue to stay in that company, but its goal is to be used for this future ear marked use. Keep this in mind.

Itā€™s so hard to time these things

You cannot time the market. So I would say what I said before and go back to your goals. What are they, are you meeting them, to archive your goals is it time to sell or not.

If you do sell them, that doesnā€™t mean you cant put the money to work. if say youā€™re looking at using it in 6 months, you have 6 months to make safer gains from the money. That could be a stable income trust, or a simple savings account. Freetrade plus if you have is 3% interest, UK Wind if your happy with the moderate risk is roughly 4.5% dividends (bit incurs some moderate risk of stock price fluctuation), or just a savings account, Marcus is 1.5% paid monthly.

Ive mentioned a lot of selling, im not saying you should. I donā€™t know anything about the fundamentals of TPI, I donā€™t know if theyā€™re a good company, or what their plans are for the future, or what their stock price might do. You might feel comfortable keeping yourself invested in them. You just need to balance it your your actual end goal for that money.

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#6

Thank you, I think I have and I appreciate just being able to bounce off others who invest. Iā€™m the only person I know who invests in shares, which is quite sad really, as I think itā€™s such a great hobby, so many people are put off thinking itā€™s for wealthy investors only. Thatā€™s why the chat community is such a great feature with Freetrade.

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#7

Just so I donā€™t mislead you with my comments, I have Atome and Technology Minerals as well and those ones Iā€™m holding as they are long-term one for me. On the other hand, they are new so Iā€™ve only invested about Ā£50 in each of them. So itā€™s only certain stocks I would consider selling at the moment, not all of them.

This is probably the best answer to your question. The money I hold in my portfolio is not earmarked for anything, therefore I donā€™t really need to sell at the moment, Iā€™m only doing it as an opportunist measure. If I needed the money, however, then the calculation would be different.

EDIT - also bear in mind the different strategies. I remember you saying that you were primarily a growth investor whereas Iā€™m a dividend investor. My selling of shares is to buy more shares elsewhere to get dividends in either a higher proportion to investment or sooner, whereas your strategy is likely to be different.

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#8

+1 to this. Most of my investments are either moderate growth + dividend, or mainly dividend paying companies. I have a couple of growth stock. And all of them have slightly different goals.

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#9

I 100% agree. It is really sad. I managed to get my friend to invest a little bit, nothing they cant part with but it gave them an idea and theyā€™re learning a little.

But people seem to think itā€™s just for the rich. or even if they can invest the stocks are to expensive. Both not true.

Most people are so unaware of investing they donā€™t even know what they pensions are invested in, often to their own detriment.

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#10

Itā€™s a balancing act between letting your winners run and keeping an eye on your overall portfolio.

What are your target allocations for these stocks? Are you comfortable holding twice the amount?

If, for example, youā€™ve allocated 15% to a few small-cap mining stocks and theyā€™ve grown to 30% of your portfolio, youā€™re left with twice the exposure to relatively risky and volatile investments.

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#11

My target for TPI had been a long term hold where I was hoping it would have grown by a large amount. They make wind turbines, so I feel quite comfortable having a larger proportion allocated to them, as Iā€™m not invested in anything else like it. I also see a potential for further growth yet.

I also hadnā€™t planned to need to the money for a long time and now I might, so itā€™s just trying to weigh it up and consider the risks with holding. The majority of the analyst ratings at the moment say hold, but I just donā€™t want yet another situation where Iā€™m saying I should have sold. So difficult to decide but going to just have to take the plunge at some point soon I think.

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#12

I think the 2nd line answers it all 87% up to down to -10% Iā€™ve had a few like that and wish I sold cellular goods to name one!

My advice do what @1anrs said about selling in increments, and if only 10 shares sell half or all if sell half youā€™ve made 100% regardless and still have 5 to keep and grow?

Taking profile is better than a loss anyday
Itā€™s the ā€œgreedā€ in us that makes us doubt!

But if you seen it at more higher share price before and think it will get there again?

But is it worth risking losing doubling you money? I personally think not :wink:

If itā€™s been a quick turnaround and youā€™ve made this money quicker than thought :thinking:

Sell a d reinvest :stuck_out_tongue_winking_eye::+1:t2:

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#13

I too have been a victim of stockhold syndrome. A few times iā€™ve multibagged and sat there thinking it was just the start only to watch it come right back down and pass my entry point.

Since then iā€™ve tried to picture how many shares i aim to get in a company and then aim for a few more. That way if it reaches a target but i think itā€™s still got more to give i can sell some of the extra i bought and mentaly i still have my original target left, that way if it goes from %200 up back down to 10% up like my Benā€™s creek, i know i still made some profit, which i can then either stick in dividends stocks or buy more of the original stock on the dip and ride it back up.

But to be honest, i too and being more attracted to dividends stocks of late, just feels nice to see some money coming in without having to sell anything.

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#14

So didnā€™t know Stockhold/er Syndrome was an established phrase, somehow, but I think itā€™s really one of the key points here.

I love this discussion and for my 2 cents, I would offer -

Investing in a company shouldnā€™t be like following a sports team. Blind loyalty is fine when youā€™re shouting at the TV for 90minutes but is dangerous when investing.

We have a habit of thinking in binary terms. You donā€™t have to sell or hold your entire position.

I think itā€™s sad that more people donā€™t invest, the gatekeepers and financial establishment have a lot to answer for! I noticed in honey the other day that Freetrade offers financial group sessions for businesses and groups maybe @DanLane could post a topic or host an AMA to explain the setup?

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#15

100% diagnosing myself with Stockhold Syndrome! Itā€™s definitely a real condition!

Thanks for your words of advice everyone, I knew the community would help me out with this. I just needed to hear the experiences of others to make my mind up. Iā€™m going to sell I think, possibly just half my shares, Iā€™m going to see what the price does when the US market opens today. Thanks again.

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#16

If youā€™re up 100%, why not sell half to get your money back and leave the profits in. Then look for somewhere else to invest your initial stakeā€¦ That way, if the price drops, you arenā€™t losing anything but profit, and who knows, the new stock you pick might do the same thing and double your money again.

I the stocks pay dividends, is it worth leaving them and collecting the payments and re investing them? I like the others here am heading more towards dividwnd paying stocks like Diversified Energy and Direct Line etc that pay between 5 and 10% returns that canā€™t be earned by leaving the money in the bank.

However I must also admit to holding 1 stock when I should have sold and bought more when the price dropped from its peak, but, I only paid a 17.1 p average, and it pays a monthly divident which for me is Ā£25 a month. So I have the dilemma of cash lump sum or what it can provide long term. (I invest the div each month into different stocks)

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#17

@Emmie Thatā€™s a great question worthy of some discussion. To offer up some thoughts from one of our analysts, itā€™s worth a look at this article that we published too.

Obviously this isnā€™t meant to be advice and any decisions you make should be your own. If youā€™re unsure, you might want to consider seeking professional advice. And when you invest, your capital is at risk.

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#18

Personally. Iā€™ve always found the right time to sell was yesterday. :see_no_evil:
Thereā€™s always that bit more profit that could be made ā€¦
Then it all goes horribly wrong :joy:
My plans are always 25% returns on investment.
Itā€™s just so hard to stick to when chasing the uptrend.
Currently have two holdings sat at 31% and 26%ā€¦ I know I should cash in now butā€¦ :face_with_peeking_eye:

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#19

I have to assume you are on the Standard FT tier for this to work, otherwise I would recommend getting it because I personally think itā€™s great value for money now.

What I do with companies that have done very well and I get nervous to lock profits in is to set a stop loss order at X amount below current value.
E.g. put a stop loss in 10% below current value, this should stop it from triggering just based on a bad day but would start triggering if there is a downward trend in the market/particular company.
Sure you ā€˜lose outā€™ on 10% but just remind yourself that you made a (e.g.) 90% profit since timing the peak is actually impossible (without pure luck).

The beauty of this approach is:

  1. If the stock keeps declining further then it likely starts approaching a value level where itā€™s worth reinvesting into it if the fundamentals havenā€™t changed - only now you have more cash to buy more shares than when you started!
  2. If the stock keeps climbing just cancel your stop loss and move it up the ladder so your safety net still catches at (e.g.) 10% below current price.

This has saved me several times from losing large profits and has allowed me to rinse and repeat some particular stocks.

However there is one scenario where this approach may have a negative consequence: and thatā€™s if your sell price is triggered and straight after the stock keeps climbing. Whilst rare this has also happened to me but just remember that you set this sell price to lock in profits and move on.

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#20

Iā€™ve got plus, so Iā€™ve put a stop loss order in today, I think thatā€™s the best thing and actually Iā€™m going to do the same with a few of my other stocks which are performing well as a kind of safety net. Thanks for the advice and help everyone, great to have such a supportive community here.

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#22

Iā€™d say stop loss or take your original investment out & let the profits rideā€¦ maybe stop loss the profitsā€¦ If you believe in the companyā€¦

Well done on getting a 100%er ! :tada: Your doing great gal :hugs:

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