It is an interesting thought that many investors ponder. When is it the right time to sell a holding? When should I hold the stock instead? These are questions that I have asked myself since I started investing years ago. I’ve found that I still have found the right answer nor do I know if anyone really knows the answer to those questions.
Investors buy and sell stocks for many different reasons. Some feel it is a way to make more money than holding cash in a savings account; others use it to invest in stocks as a retirement account. Investors also make decisions for many different reasons. Some decisions are logically driven; however, many are made based on emotion.
Through my time of investing, I have made emotionally based decisions to sell stocks for reasons such as the market fearing bad news, international relations, or a lack of patience with a stock not moving the needle as quick as I had hoped.
This is where I say that I regret hitting that sell button. To be fair, often times when we sell stocks as investors it is usually to use the money to buy a personal need outside of the market, or to shift our money to another stock or equity. My portfolio once was made due to a high risk tolerance. At the age I was when I started investing, I knew that if losses occurred I had time to play catch up. Thus, some of the equities I invested in were more risky in nature than my portfolio today. This meant that at the sign of bad news a price may shift significantly and I found myself making an emotional based decision to sell when I shouldn’t have. For the sake of this write up, below is a list of stocks sold too early.
While it seems like a tough pill to swallow, it is easy to get caught up in thinking about the ‘what if’. When we think back on the stocks that we sold, we tend to forget to remember what we bought in place of these stocks. Would I have held these in my portfolio to this day? There are too many ‘what if’s’ to consider – it truly may never be known.
Seeing what my portfolio could have become if these stocks were never sold gives me pause. It makes me lean towards the side of ‘Not to Sell’. Knowing that every investor’s situation is different I can’t tell you what is better one way or the other. However, I will tell you to take a deep breath and reconsider before confirming that little ‘Sell’ button.