To The Moon

One of the most common challenges is to come to a conclusion as to when to sell. It is a mental form of wrestling with oneself coupled with some emotional wrangling at times. Here let me reflect some possible scenarios and how I will manage it.

Sell it when profitable

This is a common form of practice. Sell to take profits and let the losers run so that possibly one day, yes one day, the losers might turn profitable.

As to the degree of profitability, there are methods such as a certain amount (once I make $X) to a certain percentage (E.g. 20% profits).

Another thought that I encountered is to sell once 100% is made. Then the remaining amount is left in the trading account to run accordingly at "no risk" since the initial capital is out.

Sell when at a loss

This school of thought is to sell to cut losses. The winning horses should be left to run as high as possible while the losers, cut off as quickly as possible.

This works fine when the market is generally on an uptrend and most stocks are doing well so by cutting the few losers, the overall portfolio looks great.

However selling at a loss is psychologically tough as it takes courage to own up to your own mistake. Often people will cling onto their losses with false hope that it will be better one day.

Sell when price reaches most analyst target

The theory here is that most analysts can't be wrong could they? After all they studies so many years, work full time at their jobs, and are recognised for their performance at work right? 

Another method I hear is to sell when the price reaches 70-80% of the analyst's target. Interesting theory but I have not tested it.

So how?

Personally my thoughts is that we need to be clear of our own investmentor trading strategies and philosophy.From there, decisions will be convicted and wise.

My thoughts on selling should be based on:

1. Am I trading or investing?

2. Is my theory still valid?

3. Am I selling based on fear or greed? Or do Ihave a sensible and logical reason to exit?

4. Is there a better opportunity to sell and reinvest?

5. If the market becomes even better and soars, how much more will I regret?

6. Conversely, if the market crashes, how much more will I regret?

7. Can I sleep better at night?

8. What other alternatives have I considered?

9. What was my initial selling strategy?

10. If I look back at this decision 5-10 years down the road, what would I say to myself?

For indexes and divident stocks such as $S&P 500(.SPX)$ , $Invesco NASDAQ 100 ETF(QQQM)$ and $DBS LTD(D05.SI)$ I am more keen to holding and accumulating.

Granted, these are just some considerations that I have. What about you? When will you decide to sell? [Great] 

These few days have been cooling and nice and I am enjoying every single day. How about you? Meanwhile here are how some Japanese people take the cold weather. [LOL] 

@TigerStars @CaptainTiger @MillionaireTiger 

Ps. I am fulfilling my resolution of at least 1 article a month [Happy]