It’s easy to get caught up in bullish euphoria – hardly anyone with skin in the game can resist having a grin on their face as major equity indexes continue to add to their hefty 25% year-to-date gains. If your portfolio has soared over the past year, you are likely debating whether or not you need to lock-in profits or let your winners run in an effort to avoid missing the “next leg” of this rally.
Why Did You Buy the Stock to Begin With?If you have a position that has gained over 50% since you bought in, you’re probably tempted to take some profits off the table. That’s probably a prudent idea. However, if you find yourself very tempted to hold onto that position you need to remind yourself of why you bought the stock in the first place. If you bought XYZ stock on a whim last year and you’re sitting on a hefty profit, then you’re probably best off locking in gains and leaving just a few shares to ride this bull higher.
On the other hand, if you had done your research and waited to get into the stock when it was “priced right for you,” then you might be better off taking a smaller profit off the table and leaving the majority of your position untouched. If you had conviction to invest in XYZ for the long-haul, then you shouldn’
No comments:
Post a Comment