Ben Carlson: When To Sell Your Investments

Ted

FYI: A reader asks:

I wanted your advice about when do you recommend one sells holdings that have appreciated? I understand the concept of buying low but would appreciate your advice on when to sell. I understand reversion to the mean and have been guilty in the past of holding on too long, only to see all the gains melt away as the market corrected.

This is a topic that probably doesn’t get enough time share for investors. All of investing is more of an art than a science but there are plenty of books and research papers written about what to buy but very few about when to sell.
Regards,
Ted
http://awealthofcommonsense.com/2017/08/when-to-sell-your-investments/

hawleyl

I use an asset allocation model that I rebalance twice a year. The rebalance takes some money off my winners and invests it in my losers. This implements a buy low sell high method. Or think of it as taking some, not all, money off the top.

The complementary question to ask is when to buy into an investment.

I guess I’m lazy since my advice is to goggle Lazy Portfolio.

MikeM

I thought this was a very good article and for some reason the first thing that came to mind when I read the below statement was @Old_Skeet. Skeeter, your discipline on investing is admirable and has proved to be profitable for you. You sharing your value style has also been a benefit for me. Thanks.

From the article:

Your rules tell you to sell. Quantitative investment strategies continue to gain in popularity. I’m a huge proponent of a rules-based approach but have witnessed far too many people who profess to invest this way change their process when things aren’t going their way. It requires discipline to follow your rules even when it doesn’t feel right (and most of the time the right move won’t feel right at the time).

Old_Skeet

Hello @MikeM,

Thank you for the fine comment. It is much appreciated and acknowledged.

Old_Skeet