ekal42o

What I am curious about is how long do all of you tend to stay in an investment. Is there anything in particular you might look for before pulling the sell trigger? I noticed a lot of people won't sell without a 5-10% return on stocks. Once this 10% is hit, is it normally a good idea to sell? I guess it might just be all based on speculation and how well I think a stock is going to perform, but everywhere I go I get burnt. I feel maybe I get too anxious and jump on too quickly before drops and such. Just curious, looking for advice so I can get my ass back on top.

WyattH

That 5-10% return is a horrible game plan, IMO.

I see 2-3 kinds of investments.

1) Low-risk, slow growth. IE: Mutual funds, Index funds. These are held for long term. Buy them and forget about them. Sell when you are ready to retire or need the cash.

2) Medium risk, better growth. These are specific stocks that you have a compelling reason to purchase. Maybe for a few weeks, months, or years. Sell when you think it's growth is over, or when the money can serve you better elsewhere (cash or a different investment).

3) High risk, hope for high return. Also specific stocks, or even options/puts/shorts, etc. Normally short term, a few months. High gamble, risk making a lot or losing a lot. Either sell when (or before) the options mature/expire, or you could buy a stock before earnings are announced and sell right after.


Saying you wont sell without a 10% return is simply dumb. If it's growing slowly, why keep it there? Or even if it's going down? Only keep a stock if you can also say you'd buy it at that price. Look at opportunity costs - Keeping that stock and being stubborn about that specific return makes you forgo other investment opportunities, which may yield higher returns.
Put your money where you think it serves you best.

That's a cursory semi-accurate plan IMO.

bat711

I generally think in terms of how to minimize losses if a stock starts sinking.

I really think, like WyattH said, you have to determine your outlook on each holding, and then devlop a plan so that you don't get caught with a stock that drops 20% and hold it hoping it goes back up. Instead have a plan to sell it if drops $X or X%

Of course I'm not Warren Buffet so YMMV.

WyattH

Sorry, YMMV?

tekstar

your mileage may vary

WyattH

LOLZ

Mik3

I'm in the process of re-evaluating my portfolio. As far as investment I generally have the low,mid, and hi cap. But what's been saving me is how well or Lucky I've been at diversifying.

As far as the 10% increase i'm assuming you're talking about 10% annually, right?

cthree

Your best bet is your simplest bet. Simply buy great companies and keep them until you don't think they are great anymore. That's what every person who ever got rich legally in the stock market did. Don't chase a number. It's stupid to sell a stock after a 10% gain when it can return another and another. All you'll do is pay lots of commissions and go nowhere.

Simply buy quality in diversified industries and sectors. That's all you need to do. The best quality companies with the best and most consistent performance will give you the biggest and most consistent returns regardless if that's 15% or 50% per year. The market will decide and some years will be better than others.

The best companies are those which perform financially, not those with cool products. Look to the conference calls and financial statements of them and their competitors to make your decision.