Are there circumstances where you would sell to lock in gains if you thought a correction was likely? If you did and the correction happened, you could rebuy your position at a cheaper price or improve other positions at a cheaper price. If you wouldn't, why not? Some on this forum suspect there is a correction happening and this could be a way to take advantage of a correction. Thoughts? I'm unlikely to do anything (trying to think more long term like WXYZ) but I was curious as to what others think.
Idea #1: Theoretically if you have a high beta stock (finviz has this data), it would go down a lot more than the market does. Idea #2: A few technical chart things you could look at: 1) trend for month, 2) RSI, 3) 5-day exponential moving average and 13-day exponential moving average. These things do not tell you what will happen, but they can help you understand that you might want to be more careful. One example: if making lows for the month and RSI<60 all month and 5 ema below the 13 ema. This is real simple stuff but consider it when looking at TSLA last month. Of course if you are going to sell something, you better have a plan ready for buying something. Are you going to try to replace TSLA with another electric car stock for example? Take a look at its beta and chart too then. And that's just the technical things. Basically only sell something if you have a better replacement. Being in a cash can be a replacement for a short while.
There's no one size fits all answer. You have to figure out what you're comfortable with. Also, whether this is a sheltered or non sheltered account needs to be considered (taxes). I'm out of the accumulation phase so my approach is not likely to suit many others. Since timing the market is a fool's errand, I hedge equity positions with options (the options manage the timing) and I'm not afraid to go short when there's a hard correction (2008-2009 and last March). Income is my priority with growth secondary and not losing a lot (market down 35% last March) doesn't suit me. Therefore, you get the big gains and the big losses and hopefully, I get some gains with low losses.
