When to Sell
What triggers you to evaluate and ultimately sell an investment? Is it a percentage gain? Percentage drop from high? Percent loss acceptable?
May 11th, 2021 11:18 am
May 11th, 2021 11:28 am
May 11th, 2021 1:21 pm
Usually some time after a dividend cut. I may also decide to sell if a company's management stops increasing the dividends over a few years. If one of my companies gets acquired by another then I sell.
May 11th, 2021 2:23 pm
May 11th, 2021 2:31 pm
May 11th, 2021 3:17 pm
May 11th, 2021 3:39 pm
Thanks. Right now what we do is set 15% once we buy and then monthly we update the 15% based on the peak price since we bought.zoro69 wrote: ↑ As soon as I buy, I set a stop loss (other then on the CDNX, which td doesn't offer0 . At most 8% below, usually far less. Which leads to a lot of small losses, but no big losses. It also leads to consistant overall gains.
The number of people on rfd buying highly specualtive stocks and holding all the way down is unbelievable. Look at the cannibis thread, they are doing it again lol
It is a very good time to be in cash. The only ones who are right all if the time are...liars!
May 11th, 2021 3:39 pm
All Canadian stocks. This is for our Non-Reg account as we are using HELOC to fund this.theinfamous wrote: ↑ This is a very generic question so I'd say it really depends on what type of investment I have (e.g. stocks, crypto, ETF's, NFT's, etc.) along with the timeframe (e.g. day/weekly for swing trades, medium term or long-term) and what my goals are. Even then it gets further broken down into what type of stocks, crypto, ETF's, NFT's I have. Some are short term holds (e.g. GME, MVIS) which maybe bought/sold on ~10% swings, other's are long term plays that I plan on holding for years. So ya, it depends
May 11th, 2021 3:41 pm
Thanks, for some of the stocks in question they were a bit speculative in a sense that they were expected to go up 20-30%+ and since then they have gone up, do we sell or hold? Their yield covers our HELOC borrowing cost....Stryker wrote: ↑ Usually some time after a dividend cut. I may also decide to sell if a company's management stops increasing the dividends over a few years. If one of my companies gets acquired by another then I sell.
Other than that I just keep them in the portfolio and when I can, I may decide to add more shares to them.
May 11th, 2021 5:01 pm
I can't help you there. I'm never thinking about selling if an equity goes up by 20-30% and over the last near forty years of investing I was never interested in buying on leverage of any kind. Too many things can go wrong. Back in the financial crisis of 2008 - 2009 the TSX had gone down at one point by over 50%. I had no plans to sell out and we didn't. In fact we were buying through the crisis with whatever little cash we had at the time.speedyforme wrote: ↑ Thanks, for some of the stocks in question they were a bit speculative in a sense that they were expected to go up 20-30%+ and since then they have gone up, do we sell or hold? Their yield covers our HELOC borrowing cost....
We have set a 15% drop from peak - updated monthly for notification
May 11th, 2021 5:28 pm
May 12th, 2021 6:03 pm
May 13th, 2021 12:10 am
May 13th, 2021 8:19 am
Thank you. That was my thinking as well as we have a mix of these. I guess another specific question that may be personal is if these examples above get triggered, do you act immediately or give yourself a percentage/range before action?craftsman wrote: ↑ To answer your question, I'll ask you another question - why did you buy this stock vs. another stock? The answer to my question will basically give you the answer to your question when the situation becomes the reverse.
A. If you brought X which is an oil company because you believe oil is going to go up in price due to supply issues and demand increasing, then the time to sell X is when the story changes - ie supply is increasing and/or demand is decreasing.
B. If you brought Y which has been a long term dividend payer which increases its dividend at a good rate at a regular interval, then the time to sell X is when the story changes again - ie they decide to cut the dividend, not increase it for a while or lower the rate of the increase.
C. If you brought Z for an upcoming event, then the event happens, it's time to sell as your original reason to buy the stock has happened.
May 13th, 2021 4:24 pm
Neither... you do some research and see what happened. Generally, once the public knows about the news, everyone knows about the news and the current price of the stock is reflecting the current public feelings about the stock - ie you probably won't gain much if anything by selling right away at that point. However, if you do a bit of research, you might like the new story that the company is now doing and elect to hang on and see. Or you might hate the idea and sell.
May 13th, 2021 4:32 pm
The problem with this approach is that you'll never sell at the best price. Also percentage-based rules are generally not great at setting the best levels. Especially as you use individual stocks, they have their own "personality"; 15% moves have a very different meaning, say, for Tesla vs Apple.
May 14th, 2021 8:16 am
Thank you for your insight. Right now it is an alert so we haven't made a move. But it is definitely something to allow us to keep a pulse on movements; in a sense.yvrbanker wrote: ↑ The problem with this approach is that you'll never sell at the best price. Also percentage-based rules are generally not great at setting the best levels. Especially as you use individual stocks, they have their own "personality"; 15% moves have a very different meaning, say, for Tesla vs Apple.
I should say it's great you have a plan at all. Executing a plan (perfect one or not) is much better than acting on emotions, which are guaranteed to drive you toward losses. Your plan is still profitable. You should at least have some profit targets. A reasonable first target is from 1:1 to 2:1 profit compared to your risk. So if you allowed a 15% downside at the start, you could sell a portion of that position (say, between 1/4 and 3/4) once it riches 15-30% profit. It's not very important what you pick from those ranges, but it's better to make that pick in advance, again to avoid emotions.
Ideally, stop loss levels should be not fixed percentages, but based on some meaningful market action in the past (support/resistance levels). Market behaviour is strongly affected by psychology / prior actions of participants. If you don't want to go that deep, you can stay with percentages; maybe at least differentiate percentages for more and less volatile stocks.
It's also a valid strategy for long-term to trade without a stop-loss as mentioned above: when a trade is based on a thesis and you hold while the thesis holds, or even go as extreme as never sell at a loss if you can afford that. If you have no stop-loss, then you don't use near profit targets either to avoid the case of big losses and small gains. No stop-loss works better for the whole market and sometimes sectors, but for individual stocks it is still better to accept the fact they can fail. Especially with large losses, the tax savings alone can recover more of your buying power than a realistic probability of that stock recovering.
May 14th, 2021 5:32 pm
May 14th, 2021 7:17 pm
May 14th, 2021 7:56 pm