When to Sell a Stock?

Discussion in 'Investing' started by ddebrazza, Jun 23, 2021.

  1. ddebrazza

    ddebrazza Active Member

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    My goal is to make money. I am relatively young, mid-30's but I do not have a lot of money to start with, $2,500 split between stocks and cryptoassets. (70/30 currently, I would like to get it closer to 85/10/5 with the 5% being Gold). I am new to investing, having about 1 month of really paying attention and researching.

    So my question, in regards to stocks, when you buy a stock, do you generally purchase it with the plan to hold it and just collect and compile stocks over time or do you typically try to "buy low, sell high," then move onto the next stocks you feel are in that same "buy low, sell high," pattern?

    What is the average time you hold stocks?
    Do you set a limit where if a stock increases by X %, then you sell and cash out?

    Example, I bought WISH at 11.07, just 10 shares nothing crazy. The stock almost immediately shot up to 13.00 and has bounced around 13-14$ the last couple days. Right now it is a 26$ profit or a total return of 23%. I do not know much about WISH. I mainly bought it based on it's IPO price of 24.00$ back in Dec. 2020 and with the bounce-back of the economy I could see them doing well through the EOY, It had a high "Buy," rating on several websites, and it was being actively discussed on Reddit. WISH, at 15$, buy? hold? sell?

    Do you invest in crypto? Do you have a similar "Exit Strategy,"?

    When I buy Gold that would be with the intention of holding until I retire or in a time of need.

    Thank you for the feedback
     
  2. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    Let's take it from "buy low, sell high". With the understanding that in a bull market, things can keep going higher. So when to "sell high"?

    When you sell, you will have cash that you will need to find a use for.

    So, for example, if you are looking to sell then you should also be looking for something to "buy low". If you have nothing which you are ready to buy, then you can make a rushed, poor decision to buy something. Meanwhile, the stock that you thought was high could have kept going higher (or it could have gone lower).

    So basically, make sure you are ready to put your cash to use when you are ready to sell one stock.

    You won't always make the optimal best buy/sell decisions, but you should be able to live with yourself, and say that you know why you did what you did.
     
  3. ddebrazza

    ddebrazza Active Member

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    Thank you! That was very well though-out and a good way to approach things. Although, I do feel like there are probably instances where the best decision is to buy nothing, sit put. But I understand what you are saying and I really do like that approach.

    Do majority of people just continue to roll over whatever profits they make into additional stock and investments? Or are there people buying and selling and paying bills from the profits? I wish I had more than 2,500$ to invest. Got to have money to make money it seems.

    Same original question, is there a percentage at which you would cash out just to avoid the risk of it losing value? Say if it doubled in value? 100% gain. Or just keep riding that wave?
     
  4. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    I was keeping my response short -- but definitely agree that sometimes you sell and then just hold cash and wait for opportunity, or take the profits and do a home renovation or a nice dinner.

    It's a fine plan to take some profits after being up +100% in a position, because you don't want to spend mental capital worrying -- that will lead to poor decision-making.

    It can help to run through situations to understand what you are thinking: with WISH you bought it at $11 ("buy low") and now it is $13.60. If it goes back to $11, then isn't that a low price again? Or maybe you no longer feel that is low, maybe you have your eye on something else less volatile like SPY; then you have come to an understanding of your own feelings toward volatility.
     
  5. ddebrazza

    ddebrazza Active Member

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    Volatility is definitely a double-edged sword. It makes things exciting to have the swings in movement daily but I agree, I have learned that I really do not like high volatility, it is stressful. I would rather get into less risky, more blue-chip type stocks. I made a list of my current holdings and my "wish list," over in the Trade Journal Forum. If you get time and could check it out and let me know what you think, I always appreciate feedback from people with more knowledge and experience than myself.

    If you look at my list, do you support the idea of continuing to diversify with the options from my Wishlist or should I start adding volume to my existing list? I wish I would not have gotten into Ford at the time that I did. I basically bought Ford when it was at its' all-time high. But I wanted to support Ford and I do believe in them long-term as a company. I have been trying to find companies that I actually have some sort of emotional feeling about (local companies, US companies, companies in sectors of my interest), but perhaps that is a bad idea as it may cloud my judgement.
     
  6. ddebrazza

    ddebrazza Active Member

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    Another thing I am struggling with early in regards to selling and holding is when you buy a stock and it starts dipping and cutting down fast. Do you panic sell to stop more potential losses or do you just sit back and have patience with the motto "it's only a loss if you sell."

    Example.

    Patrick Industries- PATK, I got in at 84.09 about 30days ago, in that 30days it has dropped to 71.58. OUCH. I only had 4 shares, so I am currently down 50$ (-15%) but it is more about the principle and learning here. Is there a certain amount of time you will generally hold onto a sinking ship without seeing a rebound before you will cut losses? I am going to Hold PATK for another 30days I think and see what happens. Looking back at the chart now, I have no idea why I bought this stock haha

    Average stock Hold Time is over much interest to me. What is your average Hold time?
     
  7. Stockman2015

    Stockman2015 Member

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    I believe it's different in the situation from person to person, and stock to stock. Do you believe that a stock is for the long term? Or is it for the short term only? What are your goals when you invested in it? My mentality is the same for crypto. I mean there are stocks and altcoins that I am bullish on but I don't hold all of them. So my suggestion is to have a strategy already before investing. I hold now BTCS and ATOS, and looking for others that can be a potential profit for me.

    I also loved what anotherdevilsadvocate said that you should be buying something when you sell. It's like to reinforce yourself why you did you sell. For crypto I sometimes sell half of that coin and then invest it on the alt that I am holding longterm. I hope what I said make sense even just a little bit hehe
     
  8. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    Hold onto Ford. Technically it has gone sideways this month after a strong May, so that is good. In this context, think of Ford like it has been able to maintain its strength.
    Fundamentally it has a P/E of 15 (and forward P/E of 8) with a growth rate of 53%. That gives a PEG ratio (P/E to growth) much less than 1, so it looks very good there.
     
  9. ddebrazza

    ddebrazza Active Member

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    I love Ford as a company. I will definitely be buying back into Ford once my financial situation stabilizes. Everything is fucked out here in Arizona. The housing market is so hot that it is attracting a lot of out-of-state and even international buyers which has forced locals into rentals which has caused the rental rates to shoot-up also. Affordable housing is a serious crisis here. We may even have to look at moving states.
     
  10. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    And then what?
    You would have cash not doing anything.
     
  11. Stonksalltheway

    Stonksalltheway New Member

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    A typical 20–25% margin is good to book 25% profit. You should always look for any news regarding the stock before selling.

    But not all the time, I remember when I bought $BTCS at $.60, and then one normal day in August, it spiked up to $6+, that's when I'm planning to put sell order at around $.70 - $.80, glad I wasn't able to finish that sell order. I sold it for $7
     
  12. ddebrazza

    ddebrazza Active Member

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    Nice. I sold off my Telsa and VOO ETF holdings and swung them into BitCoin @59,000.

    I am heading off today to a 30-day rehab program in attempts to get control of my life back, hoping that we see another Crypto surge over the winter months. I think we could see BTC surpass 70-75k and remain there as a new floor.

    Have 270,000 SHIB, would love for that to hit 1.00$... That would be an absolute dream come true and life changing for me.
     

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