Do you see yourself as a trader or an investor?
The concept of house money, selling half when the price doubles and letting it ride..
- Thread starter HolyGrailSeeker
- Start date
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Yes;
mostly both, except its not a gamble , not a coin flip, not a prediction.
Frankly\ dumb idea sellin' half 'cause it doubles. Partial profits can help, but most stuff like ETFs doublin' its going up more.I do cut back on my tradin' when my inVestments do better.
I seldom let a trade or investment turn into a loss;
except TQQQ or even xlk lately, a small gain can easy turn into a loss.............................................................................
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HE used a tricky example, few experienced trades/investors would lose almost 30% intentionaly , say off 52 week HI.
But losing $5 could easy happen to any trader/investor........................................................................ I'm no mutual fund but it could make sense for them to hold thru a 30% retracement/happens all the time, good trends.
My remarks apply apply to real markets;
not bitcon ,not crpto cr*p or confederate money.
NO taxable gain ever due on a ROTH trade/roth investment
That's the part I question. Why does it make sense to hold thru a 30% retracement? Especially in a ROTH ( Up here in the frozen north a TAX Free Account). At one time commissions were a good excuse but not anymore.
There is very little downside to moving to cash when the market beings a downtrend.
You said yourself that you rarely let a holding turn into a loss. The market doesn't know or care where you bought the stock. If it drops 30% you have lost 30%. Oh yeah it then has to go up about 45% to break-even.
My mom showed me her MSFT position she bought late 2008...up over 1110%. Missing out on that move IS the downside to moving to cash.
Of course not and I am not saying this is the only way to invest/trade. Most people will not capture the monster moves trading in and out...which is fine if what they are doing is making them money.Why once you sell you can't get back in?
Only one MSFT purchase per person per lifetime!!!!!!!!!!!!
I never said you can't buy a stock back after you sell it. You can compound your portfolio by selling as the stock drops then buying it back at a lower price. If it turns around after you sell it you can always buy it back a little higher.
If there is a downside, it's that you might miss a move up. Opportunity lost. But then there are 100 of stocks I don't own that have nice moves that I missed and I hardly lose a bit of sleep over that. Microsoft is one of them.
Excluding some of the recent monster return years, the stock market historically returns a little bit better than the inflation rate.
Here is a snippet from an article (How to Avoid Big Declines Using Market Timing by Chuck LeBeau) I've saved from 2009:-
wherein he references a very comprehensive study of the Dow Jones Industrials, of a $100 investment at the beginning of 1900 that turned into $25,746 by the end of 2006, and delivered a mean annual compound return of 5.3%.
Missing the best 10 days reduced the return by 65% to $9,008 and mean annual compound return of 4.3%. But avoiding the 10 worst days increased the return by 206% to $78,781 and mean annual compound return adding 1.1 percentage point to 6.4%
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Make what you want of it.
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BTW index futures overnight are .... still going lower.
No, I'm from the school of "I don't have a gain or a loss until I sell".