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The thing I've learned investing so far: never sell anything. It really only ever makes sense to sell if doing so will positively change your lifestyle, or you
by nly 6y ago
The thing I've learned investing so far: never sell anything. It really only ever makes sense to sell if doing so will positively change your lifestyle, or you have no alternative.
Examples of when selling might be a good idea are buying a house, retiring, going through hard times, loss of a job etc. Rebalancing is fine too, but I'd personally only bother to do that if your portfolio is massively distorted (like it goes from 5% to 50% bitcoin in dollar terms).
Like you, I've sold Bitcoin before this year for no real reason other than I got bored. I've also partially sold shares in a company that went up 10x in value and reduced by TR to about 3x... again, no real reason.
If you want to speculate on the future just change where your new investments/contributions go.
- tekkk 6y agoNoo, you should not hodl something forever just because you bought it and it's precious to you. The thing about investing and stock market in general is, that people are constantly seeking the _best_ returns. If you have invested in something and it goes up by 10% in a year while a similar asset goes up 50%, you should probably re-evaluate your investment. I have noticed that companies and investments do roughly divide into winners and losers. Meaning a currently well-performing asset will do well in the future. And a badly performing asset will probably suck still years to come. One of the best things in investing i have done is selling my badly performing assets and buying some over-priced but well-performing assets. Sometimes the price is worth the hype.
- nly 6y agoYou're subscribing to trend-following strategy, which is your prerogative, but if your 50% return "similar asset" is really similar to something you already hold, then why didn't you hold it already as part of a diversified portfolio? If you had you would have shared some of the gain, whereas jumping ship you may find you missed the boat.
- tekkk 6y agoIf you are buying individual stocks, you can't really diversify your investments too much. I myself also enjoy the feeling of "getting it right" and only invest in companies that I absolutely believe in (and when that stops, I sell them). I don't hedge my bets by buying their competitors in the case they might do well too.
- 0_____0 6y agoJust have to be careful that you aren't thrashing around and exchanging investments to quickly. For one thing, the tax drag, and secondly, I've put money into a variety of things and then taken it out, only to see the stock triple in value (various EV, certain companies after IPO)
- bertjk 6y agoI've noticed the same, and I find it kind of amusing because it is basically the opposite of the common advice of periodically "rebalancing" your portfolio
- nly 6y agoNormally people talk about rebalancing in terms of asset classes, not individual stocks.
- bhupy 6y ago> It really only ever makes sense to sell if doing so will positively change your lifestyle, or you have no alternative. Hmm, but what about opportunity cost? I think the challenge is that it's impossible to know a priori what the "alternatives" even are.
- quesera 6y ago> The thing I've learned investing so far: never sell anything. I once believed this to be a truth that I had learned. Then time moved forward, and I learned that it was not a truth. :)
- valenterry 6y agoPlease enlighten us.
- quesera 6y agoIf you have been an investor (or startup employee) for less than 13 years, you may not have witnessed large paper losses that make a good argument against never selling. More directly: We are in the longest bull market in history. It is not always like this. I've learned that it makes sense to miss out on some upside to protect against the downside. This was a reversal of my previous beliefs, which matched the GGP's. I make no predictions about the future here -- short term, or long term. Somehow we (the investor class) survived a year of enormous social disruption which should have decimated the market, at least. The popular wisdom says that the next year will bring (social) recovery and economic expansion. This might be true. But I would argue against a blanket policy of never selling. I have ridden that train all the way to $0 (literally) more than once, and while I was not harmed by these decisions, they were objectively poor ones.
- nly 6y agoEverything you say is true, but right now there is no obvious way to protect against the downside except to sit in cash. If the market rallies for another 10 years we will all look rather foolish doing that. Yields are falling across all asset classes, and correlations between them are growing. The overriding feeling no matter how much analysis you do is that nobody has a bloody clue what is going on.
- quesera 6y agoYou're right. And the real takeaway is "it depends". My "smartest" investment decisions have been never following through on plans to sell, after thinking "This can't go on forever". (The same can be said for my dumbest decisions though!) I remember reading here on HN, back in May or so, someone saying that they pulled everything out of the market in March, and avoided huge losses. Sounded smart at the time. Luckily, I was not that smart!
- pontifier 6y agoYou make a very good point. Having your investment money separate from operating funds is a key to having continually growing investments. Money from the sale of an asset should only be used to buy other assets until you reach your personal wealth target.
- Waterluvian 6y agoI sold because it's an open tab in my life I don't care about anymore. I don't like having open tabs I forget about everywhere.
- simonebrunozzi 6y agoI am very familiar with this concept, and feel similarly to you - but never thought of it as "tabs" (I assume you intend browser tabs, like I do?). It's a brilliant metaphore.