What can one do to resist the temptation to sell the winners in a stock portfolio? - Seedly
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Anonymous

Asked 3w ago

What can one do to resist the temptation to sell the winners in a stock portfolio?

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I faced the same problem too. It is so tempting to take profit when you have +30% to +200% gains. (for example)

For me, I will just tell myself: "If it's such a good stock, you should have the intention to hold it forever!" Only sell when the growth story changes or fundamentals weaken, other than that, stay away from greed and looking at the stock market everyday. If you hear no evil and see no evil, you should not have any reason to sell the winners.

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Frankie Rappaport
Frankie Rappaport
Top Contributor

Top Contributor (Jul)

Level 9. God of Wisdom
Updated 3w ago

To invest into passive ETFs in the first place and holding them for ultra-longterm.

Overwhelming evidence accumulated in the last decades that stock picking and market timing is not successful benchmarked against an appropriate index.​​​

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j
j, Accountancy at SMU
Level 4. Prodigy
Answered 2w ago

It's hard to resist the temptation of taking profit from the winners, but perhaps having a system and sticking to some core indicators offer some guidance on when to sell eventually

if its looking at value investing, a good question to ask is if the company fundamentals have changed/ is declining, otherwise it would be a good idea to hold on to it long-term as it will grow further

meanwhile, if it is about trends, ask yourself if there is any reversal - be it cross overs or changes in candlestick patterns

with these pre-determined checklist, perhaps it will reduce the emotional parts in investment, and if this system works, repeat n continue (: or if uncertain, taking partial profits might be good as well

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Whether it's a good or poor stock, don't look at it too often. Instead, monitor news that affect it e.g. through The Edge, The Business Times, or even Facebook groups like Singapore Stock, REIT and Bond Investments. It will reduce the temptation to sell if it's a good one.

However, if you realised the business fundamentals have declined or expected to decline, you can consider selling it.

For example, I recently cut losses in First Reit at $0.70, when news broke on Lippo Karawaci rental restructuring early Jun. I expect future downward rent. I bought it at $1.00. Now 2 months on, the price went down even further to $0.555.

Meanwhile, 10 years on, I'm still holding on to MIT, since its IPO. If one day its business fundamentals have declined, I will also sell it.

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You can ask yourself? Will it continue to be a winner? What factors continue for them to do so?

If all the stars are aligned, then continue to hold or accumulate when there is a irrational dip.

Always go back to why you invest in this stocks. If u have sizable amount, it is okay to take partial profit out of it and reinvest to other better counters.

E. G u invest 100k into stock A. U profit 200%. Capital is now 300K. U see little upside to stock A while stock B is undervalued. You sell 40% of stock A and redeploy 120k to stock B

I think i can guess some possible sg stocks you are holding. Definitely not blue chip/ Reits XD

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Samuel Tay
Samuel Tay
Level 3. Wonderkid
Answered 2w ago

Ask yourself if the company is still doing well and growing fast. If you are convinced that there is still a long runway for growth, why would you want to give up the good future gains? Alternatively, if the company has matured and its growth has slowed down, you may want to consider redeploying to another company that has better growth prospects.

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