I've made like 30%-50% return on my stocks as of late. Should I sell now?
My mentor senses are tingling. Great question.
So there are two scenarios here. Firstly, congratulations on your success. You put the time in and the effort - and the money. You have the results you wanted and possibly more.
You say you consider yourself an investor. Well I’ll tell you true investors don’t have to sell. They can hold through the corrections and even buy more at the bottom. They benefit from long term share growth, stock splits and dividends - so make sure your stocks can perform all three. Dump crap that does not !
You sound more to me like a Trader. Traders buy on dips, sell on upswings and pay their bills with the profits. Sometimes they loose and they have to go to their 2nd income stream to recoup. You better have one !
With that said, let’s talk about the two scenarios and complete your answer:
***Sell now, take your profit: ****
Wisdom says if you have a *nice profit it’s correct to sell -cash out. You can sit back and watch the market, reevaluate, look for your next dip and look for your next great buy. The point here is you have the benefit of your cash in hand while you decide on your next endeavour. You can’t lose money taking a profit.- Keep in mind we are in a bull market. It could keep going up. It could easily go up another 3,000 points before the summer. I really don’t know. Whenever you sell there is a loss of opportunity if it goes up after you sell. You need to be okay with this. It probably will go up after you sell. Still I’d lean toward selling if you have 30%-50% return as you say in a short time. Traders don’t make any money till they sell.
**Hold long term like a true investor: ****Here we are talking 3, 5, 10 year timeline or even a life timeline. I know plenty of investors who don’t sell, they only Collect more on dips. If they are 30 they plan to spend it at 60. If they are 60 they plan to give it to their kids. Selling is not part of this. “How Long do I Hold Stocks ? - Forever ! -Warren Buffett”
- Here be prepared to ride the roller coaster. True investors love corrections because that’s when they ‘buy more’. Did you see Last crash of 2008 ? They showed Warren Buffet with a shopping cart on wall street filling up on all his favorite stocks. So save up Your money now and be ready to buy the dip.
That’s the low down in a nutshell. You have to decide on what road you will travel. I don’t think you can perform both. Neither one is better then the other. Investors and Traders both have nerves of steel. Traders though, also have ice water for blood and can walk through fire. I’ll tell you after 30 years trading that it’s much easier to be an investor. Trading is exceedingly more difficult. The main advantage of trading is you have your cash in hand and can spend lots; what ever you can earn. Many investors live like poor people because they really can never sell. That’s it !