When do you sell?

[CoachCB]

I wanted to get the consensus here on when you guys sell.

I have some blue-chip stocks like APPL, WMT, LOW, BABA that I'm holding (long). But some of them, like APPL I'm up pretty big (over 20%).

I've followed some of the picks here, like OZSC, MARA, ELYS, TBLT etc. I've sold some of them at a profit, gotten back into some of the one's I've sold, and some I'm still holding. I know some have more upside (could run up more), but....at what point should I (or you, or "an investor") say, "I've made a nice profit, time to sell."?

I'd love your thoughts as I'm still learning and trying to suck up as much knowledge as possible.

I still want to figure out shorts, options, puts, etc.... but that's another topic.

Thanks boys! I enjoy coming here every day. (if you ever notice I'm absent it's likely because I'm at the office and this website is blocked)

 

[NorthernStar]

Laughing because I was just texting about that with my son. To make big money you need to be right twice. The other saying I like is you never go broke selling for a profit. He and I bought Tilray yesterday for $40. He sold early this morning for $63. I am still sitting on it deciding what to do. Secondary goal is to do better than him ...hahaha.

My general opinion is to put some sort of stop on your winners. Pick a percentage whatever that is. Lets just say Apple for example at $135. If it drops 15% it sells. So you sell it at $115. At that point in time you can take a look at it and make the decision process all over again in terms of when and what price you want to jump back in at. Of course the worse scenario is it sells at $115 and proceeds to jump up to $140 or something before you get back in. On the other hand if it drop to $100 and you jump back in you are going to be happy with the decision.

When there is a drop of something like 15% I think there is something going on.....the market in general is getting worse or something with the stock in general. So I want to lock in my profits and revaluate after some of them are gone. Damn near impossible to sell at the exact high or buy at the exact low. Last thing dont beat yourself up for not hitting the high to sell or low to buy (I kick my self all the time about this).

 

[NorthernStar]

I was going to sell my TLRY and I got a work call and it dropped $3 while I was talking. A quick and in and out (almost feels like sex) for a quick $3,400 profit.

 

[nonsense1970]

I was going to sell my TLRY and I got a work call and it dropped $3 while I was talking. A quick and in and out (almost feels like sex) for a quick $3,400 profit.

Great thread. How about short/long term cap gains. Do you concern yourself with this as well?

 

[CoachCB]

Laughing because I was just texting about that with my son. To make big money you need to be right twice. The other saying I like is you never go broke selling for a profit. He and I bought Tilray yesterday for $40. He sold early this morning for $63. I am still sitting on it deciding what to do. Secondary goal is to do better than him ...hahaha.

My general opinion is to put some sort of stop on your winners. Pick a percentage whatever that is. Lets just say Apple for example at $135. If it drops 15% it sells. So you sell it at $115. At that point in time you can take a look at it and make the decision process all over again in terms of when and what price you want to jump back in at. Of course the worse scenario is it sells at $115 and proceeds to jump up to $140 or something before you get back in. On the other hand if it drop to $100 and you jump back in you are going to be happy with the decision.

When there is a drop of something like 15% I think there is something going on.....the market in general is getting worse or something with the stock in general. So I want to lock in my profits and revaluate after some of them are gone. Damn near impossible to sell at the exact high or buy at the exact low. Last thing dont beat yourself up for not hitting the high to sell or low to buy (I kick my self all the time about this).

Thanks Northern. I agree w/ the "sayings" - especially about taking a profit. I'm up pretty big in a few of my holdings and plan to hold on a little longer (which means I should probably sell today!).

Did you top your son on TLRY?

 

[NorthernStar]

Had the yips....and messed it up. Was looking at it and was going to sell at $62.75. Call came in and when it was over it was dropping quickly. Hit sell and perfectly time a short term drop......right before it started to go back up again. Story of my life. Hahaha.

His timing was better...I had more share though!!

 

[NorthernStar]

Great thread. How about short/long term cap gains. Do you concern yourself with this as well?

Something to consider for sure. You can definitely cost yourself making decisions based on the tax consequence versus losing money because your profits keep getting eaten up because the stock price is dropping. I would rather pay taxes on a profit than not have a profit.

If I am planning on buying something for a short period of time..... like the TLRY trade I just did I will do that in my IRA so I dont have to worry about the tax piece.

 

[nonsense1970]

Something to consider for sure. You can definitely cost yourself making decisions based on the tax consequence versus losing money because your profits keep getting eaten up because the stock price is dropping. I would rather pay taxes on a profit than not have a profit.

If I am planning on buying something for a short period of time..... like the TLRY trade I just did I will do that in my IRA so I dont have to worry about the tax piece.

That is a good point about an IRA. I currently do not have an IRA, only 401k and 403b. However I am only limited to Mutual funds in these accounts. What is the maximum income you can have for joint filing in order to have an IRA?

 

[Ricboff]

great topic , not sure where to start here

am assuming we are talkgin about TRADING, not investing. That is you are buying XYZ to take a profit in the near future (days to months). you have no intention of holding this in your account for years. (Often , tho, that is exactly what happens when shit hits the fan !!..a stock suddenly becomes a longterm hold )

best to have a a plan before going in ;

ex.,

stock XYZ

why buygin it? .....

Entry Price -- $_______

Target Price-- $_______

Stop loss -- $_____ . that is, at what price are you getting at a dodge? Is it logical to take a trading position without defining this? think about that.

all it takes is one stock to crush an account cause the person didnt want to take a loss, and had no plan in advance .

(of course , tech/, analysis helps greatly in formulating a plan, its your GPS (where are your levels of support ? resistance? stock severely oversold?..etc-- it aids in putting probalilty on your side and in making more confident, informed decisions. become THE CEO of your Trading Small Business ...)

it is wise to have a trading mandate that has the TP (target price) greater length than your risk-per-share (R) on the downside In other words if your risk per share on the downside is 1% of your trading account, 1R --- than the TP is 1.5R as an example


if youre NOT trading, and you're investing then retraces are a time to ADD. Also, if it looks toppy, and you are "100%' sure it will re-trace, sell calls on it. Grab the premium

 

[NorthernStar]

That is a good point about an IRA. I currently do not have an IRA, only 401k and 403b. However I am only limited to Mutual funds in these accounts. What is the maximum income you can have for joint filing in order to have an IRA?

I dont know for sure. You might be able to do some sort of roth-ira account. You would still have time to fund your 2020 and then do another one for 2021. I am an engineer...not an accountant. I know just enough to be dangerous.

If you had employment with some job and had a 401k. When you leave you can roll it over to a self-directed ira and then put it into something like ETRADE and buy and sell all you want with no tax worries. You just pay taxes when you are taking the money out.

 

[Ricboff]

i'll add a few more things;

a) trading

the TP in the above i set as 1.5R, that was as an example. It could be 3R, it could be that you sell half at 1.5R and let the rest go with an increased stop ....ect etc.....can do wahterve ya want. BUT, the important point is to actually have a plan.

the Stop loss, IMHO , should be set -- you actually set it in your accunt . Rather than watch it and have it in the back of your head. Why ? cause, it takes emotion out. IF triggered, get an email , kaput , its a loss. Price of doing business. A trade set up can look perfect- yet may not execute . 1 trade in itself is a random act. You put probability on yuor side (with the technicals) but probability lost this one.

b) investing

again by selling calls on a long-term- hold when the chart/overall market looks toppy (ex., STOI is at 70, divergences showing-- red flags) what exactly are you doing? you are selling the right for the buyer to take your shares if XYZ is above the strike price on or before expiration. You are getting PAID for this , you're like an insurance compnay. Another way to look at it, is you're increasing the yearly yield of XYZ-sweet! Remember , its near a top- you feel its heading down. If it does? well you dont care as its a long term hold AND you got paid to sell the calls. Of course if it heads up? you still keep the premium but your shares will be called away- you can buy-to-close if you want

now lets say the overall market is retracing and as usual taking everything with it . stock XYZ retraces , say 15%, do you care? nope as you're are in for the long run. Let's say you have extra funds and want to add. IN LIEU of buynig , you call sell a put. Let's say its selling at $50, but from the chart you want to buy it $47 (strong horizontal support , bounce off the 50 sma, oversold..etc ). Well, then sell the $47 put. YOU GET PAID to sell it!! IF it stays above $47 before expiration? you dont get the shares , you keep the premium . Are you mad? nah, you wanted that price didnt get it, and was paid trying , lol Where's the risk? it may go well below $47 and you have the obilgation to buy those share AT $47, even if the price is $43. Do you care? well, its a long term hold , so not really. You do have the ability to buy-to-close thec ontract so as not to take ownership of the shares (as a loss if the price has gone below your break even point). The point is yuo can actually be paid to buy the stock you want at the price you want

 

[Jstack34]

That is a good point about an IRA. I currently do not have an IRA, only 401k and 403b. However I am only limited to Mutual funds in these accounts. What is the maximum income you can have for joint filing in order to have an IRA?

Anyone can have a traditional IRA, you just won't get a tax deduction on your return.

A roth IRA has limits to who can contribute - see here. If you exceed those limits, you can do a backdoor contribution as long as you don't have anything else in a traditional IRA. Basically lets you contribute to traditional then immediately convert it to a roth.

https://www.irs.gov/retirement-plans/amount-of-roth-ira-contributions-that-you-can-make-for-2021

 

[CoachCB]

That is a good point about an IRA. I currently do not have an IRA, only 401k and 403b. However I am only limited to Mutual funds in these accounts. What is the maximum income you can have for joint filing in order to have an IRA?

I have two accounts at Schwab that I do all of my trading in - one is a non-retirement brokerage, the other is a Roth IRA. I now make too much to contribute any additional funds, but I can trade all I want within the account, and it all builds tax free. I'd suggest starting a Roth IRA asap - as mentioned by Northern, you can fund 2020's through April 15th and continue funding 2021's contributions the rest of the year. So if you have the money, you can put in $12k right now ($6000/year....$7k if you're 50 or over).

 

[CoachCB]

Ric, good points you've made. I don't use the stop loss as much as I should and I sometimes chase a loss (add more shares as it dips/goes down). I need to start being more disciplined about the use of stop loss.

 

[NorthernStar]

I think Ric is doing somethings that are a little more sophisticated than me being the average Joe in investing.

What you can really take from his suggestions are to have a plan. I am not always good with that part. I do highly recommend the the stop loss.

Additionally, it sounds like within the plan is what price to sell. Which is the initial question. The market is fluid so it is ok to make changes to the plan. You buy a stock for some reason at $100 and think it could go to $120 by this time next year. Let say the entire market goes up and 4 months in your stock is up 20%. Do you sell? To me what make sense is to revaluate your plan. Maybe move your stop up and your target price up.

The other piece that hasn't really been talked about is the asset allocation. How many stocks are you going to own and is there a percentage of your portfolio that is in one stock or maybe even a sector. You have a limited amount of funds. Kind of curious as to others approach.

 

[CoachCB]

I didn't want to start a new thread - but my account opened up today, as high as $2500....it's down about $3000 now. WTF!?!? You win some, you lose some!

 

[Bruins4Life]

I didn't want to start a new thread - but my account opened up today, as high as $2500....it's down about $3000 now. WTF!?!? You win some, you lose some!

You will go nuts worrying day to day. Set your stop losses, try not to read too much into 1 day.

 

[CoachCB]

You will go nuts worrying day to day. Set your stop losses, try not to read too much into 1 day.

Thanks Bruins. I generally do that....but yesterday was an odd day and I was venting!

 

[BilltheCat]

For me I buy stocks with 3 things in mind:
1. If I really like a stock for the long term (something like DIS), I buy and hold and don't ever worry about it again. It will go up and down but let's face it, it should never tank.
2. I buy some speculative stocks and give those the wait and see approach. If they do well I keep holding them. If they go down more than 10% I sell and move on. Sometimes I use a trailing stop loss, but not on every stock.
3. I also have fun with a couple of penny stocks. Buy and hope for the best. If they go up I'll take my profit and get out and move onto the next. If they go down sharply, I get out and wait for the next one. An example of this is bought SNDL the other day. Went way up then started to come down. Made about $350 and sold.

The big thing is not to get emotional with your portfolio. It's only paper and you have to do what's best for you. Look out for #1

 

[CoachCB]

For me I buy stocks with 3 things in mind:
1. If I really like a stock for the long term (something like DIS), I buy and hold and don't ever worry about it again. It will go up and down but let's face it, it should never tank.
2. I buy some speculative stocks and give those the wait and see approach. If they do well I keep holding them. If they go down more than 10% I sell and move on. Sometimes I use a trailing stop loss, but not on every stock.
3. I also have fun with a couple of penny stocks. Buy and hope for the best. If they go up I'll take my profit and get out and move onto the next. If they go down sharply, I get out and wait for the next one. An example of this is bought SNDL the other day. Went way up then started to come down. Made about $350 and sold.

The big thing is not to get emotional with your portfolio. It's only paper and you have to do what's best for you. Look out for #1

Good stuff Bill. On #1 - that's my APPL. Everytime I think about selling, I end up adding a share or two. But this is the thing, at some point w/ a stock like this, do you sell? At what point should you feel you've done well with it? Or is it like a mutual fund, where you buy and hold long?