MSB Trading - 2020, page-1230

Suppose, your original comfort level is $10K bought at $1Let's say the SP has risen five fold to $5, and it is now worth $50KLet's say the SP goes back to $4 before it makes it's way to $10If you sell out at $5 for $50K to lock in profit. All good.But, would you have the conviction to buy again at $4 with the same size parcel?That's $40K, which is now way above your original comfort level....

First, keep aside some money for the tax man.
If you lock in your original $10 plus the tax, then you now have less than $40 in the kitty to buy more shares.

Second, what to do with profits? Spend or invest?
If spend, then enjoy.
If invest, then put it in the kitty and wait. That money is solely for re-investing, awaiting opportunity.

Third, surely the price went up and down for a reason? Something changed. You most likely would not have sold just because the general market was up, you would have sold because a cycle had concluded and you believed that the rise had ended. Similarly, you would have chosen to buy again because a new cycle was beginning or an event was imminent which you thought would be profitable. If that is the case, then you already have money in the kitty ready and you would feel comfortable using it because you have been waiting for the opportunity and now you are taking it.

Lol, anyway, that’s how I would look at it