Its Over, page-20594

Selling is always a hard decision. When to Sell, When Not to Sell.

Because everyone gets a tip/recommendation to Buy and buying is easy, even though you could erroneously have bought at just about the wrong time. because we're conditioned to think that if you bought at the wrong time, just hold and you won't lose money. It is the notion that the longer you hold, the higher the stock price eventually get.

But selling, it is way tougher.
What If I sold prematurely and the stock continue to run higher? If it continues to go up, as the indices are bullish, you'd tend to think to hold because stocks are running higher.
But indices can go higher, your stocks can go backwards. Or you face regret not selling into the rally and refusing to sell quickly for a lower profit when stocks start to backtrack, only to enter into a loss situation? And then you continue to hold hoping for a recovery but it continued south bound. Am sure that sounds familiar.

Or you're not selling whatever predicament your stock is into, because you keep the faith and hold, refusing to take a loss, only to suffer a bigger loss and perhaps even a loss that cannot be recovered. Not with the company issuing more shares at discounted prices. Or you must wait for that all time high price that you missed selling into, and that because you kept the faith, you must hold. The stock is a good one. But then comes the big correction on Wall St, US economy enters recession and it won't matter your stock is a good one, maybe for a year or so, or a few years or even forever. A good stock to you may not actually be a good one or circumstance post recession alters the business outlook and growth of the company rather profoundly.

Or you will never sell any stock once it has entered into a paper loss, because a longer hold eventually will yield a better price. Not so even with many blue chip or well established stocks. Especially if you bought it at the peak. When you buy the stock matters big time, but people normally never thought about that, because emotions always rule in buying decisions, people buy them at the top when the market exuberance is at its highest.

Or you will not a sell after buying a bombed out stock that has just started to rebound, believing that a rebound must necessarily return it back to its all time high again, hence there is significant upside by holding. So you wouldn't sell into a 40% gain over a month, you'd rather hold. And then, you lose it back. Very few stocks that have dropped by 70-90% ever make it back to its peak again. The reason it went so high was because of high octane expectations that proved to be either false, fraudulent or never materialised or delivered or material change in business condition(s) which caused the stock to lose by such magnitude, then a sudden catalyst appears, a fake hope and the stock starts rising again, sucking in the unsuspecting trader/investor who now thinks it is going to the moon again. This is where just being chart myopic cause us not to think rationally. When something is cheap, it usually has a reason. We tend to think that the poor market sentiment is the only cause of the savage market beating of the stock. I think the market is more efficient than that.

Selling is tough because when we have made money, we think we can make more OR when we have made a poor decision and have lost money, we wait to recover. Do we really have the luxury of time when the US market is reaching the peak? Selling is tough because most of us don't have an end game or goal; we buy then we see what happens and decide along the way.

Knowing when to sell and when to buy are perhaps the most important part. Buy a BHP or CBA and forget about it, you say. OK, but just like no one wants to pay for a house they could buy for 1/4 less of the price later, the same should go for stocks too. Even BHP and CBA have an extended period of time going nowhere, down first then recovery.