I bought a US bank ETF in June 2020. It has given me 30% gain at the moment. Should i sell it now that it has recovered to pre covid. Since its cyclical...unless interest rates will increase again, with which i should hold longer?
I like to buy and hold but Adam Khoo taught me not to do this for cyclical stocks. What are your thoughts on this?
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Chris
15 Jan 2021
Owner and Writer at Tortoisemoney.com
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Well, Adam Khoo has his reasons, but why did you buy it? What were your reasons for buying it?
If you bought it as a quick trade, then yes, maybe you should take some profits, since banks tend to be quite subject to macroeconomic factors.
If you bought it because you believe in the strength of the banks and their future, then you can hold it longer unless you believe that fundementally something has changed in the banks.
Lastly, I think before you decide to sell, do have a plan on where you're putting your money to once you sell off this ETF. If you don't have anything in mind, you might be just letting a stack of money sit by the sidelines to miss out on returns as the market rallies.