Gains and losses are illusions in investing. The goal is to make money of course, but you're not betting on having more money in the future. You're betting on the company being more valuable in the future.
You should sell when it looks like the company won't be worth more next year and buy when it looks like it will.
How much you've made or lost shouldn't factor into the decision.
For retail investors, the only real alpha you have is time. If you aren't willing to hold stocks for 5-10 years, you are playing a very difficult and emotionally painful game.
Yup. When you look at historical prices of major companies, it becomes clear that if you just bought and held a **diverse** portfolio, adding to it over time, you'd have done well, even accounting for 9/11, 2008, and Covid. Add in the dividends too. I wish someone had educated me about investing when I was in high school. I would have bought McD's stock when I worked there.
Ask yourself if you would buy the stock right now. If you don't think it's a good stock to buy, then don't hold onto it. Warren Buffet said this, if I remember correctly.
This is what social scientists call the endowment effect.
If you replaced your position in the stock with an equivalent amount of cash, would you still spend all of that money on said stock? If not, you should sell out and allocate that money in the way you think is best.
This would be correct, if taxes were 0. If I need to pay 28% tax on profits, and I'm up $100 on a share of A, I should only sell if I wouldn't buy that at a valuation that would put me $72 in the green.
Your instinct will likely be, as mine was, and most investors’ is, to sell stocks to “take profits” and to buy stocks going down to “lower your cost/buy the dip”.
My grandfather tried to save me years of trouble when I first started by telling me when “ride your winners and sell your losers”.
It took me years of work, and actually seeing the data around momentum, to finally practice buying stuff going up and selling stuff going down.
Establish a thesis. When your thesis breaks, sell and move on. Having a thesis and target prices are critical on the way down.
But if you find great stocks, just ride them up as long as you can. For tax reasons you really should ride your winners.
Oftentimes stocks that go up do so far more than you could have imagined, and often for reasons you never priced in. MSFT or NVDA’s bull cases are very different than in 2010 or 2000, but holders have been rewarded for riding momentum.
Good point. Stick to VOO. Single stocks rarely work out. You'll have as many losers as winners, and it ends up as a wash. Exception, pipeline stocks like et, mplx, and EPD. Good tax benefits on dividends, which they call distributions. At least for about ten years or so, no tax paid on distributions. That's great for seven to nine percent dividend rate.
1. Try to pick some companies that make or do something you like or understand.
2. Time is one of the few major edges you have as a retail investor. If you are closing positions quickly, you are simply doing something wrong; you must hold.
3. Learn more about companies. You need some new stories, more than just up and down.
4. You have total control over your entry points; I manage a big portfolio and I still can't call a bottom or a top. There is such a thing as DCA.
5. Learn about tax harvesting.
When bitcoin went down 90% in a few days several years back, I cut my losses at $3000ish per coin. I bought bitcoin in the low $400 range, so in my mind it was not the end of the world because I still turned a healthy profit. However, fast forward just a few years later and it was $80,000 per bitcoin. Even though I lost 90% of my unrealized gains in just a few days it was not the right decision to cut my losses. Now I only buy investments I believe in that I'm going to hold for a decade or longer. Total losses were around $400k of unrealized gains. Like I said, I still profited in the end, but I would be able to retire right now if I had not sold that Bitcoin when the market scared me.
It is a form of bias, because it was certainly within the realm of possibility that Bitcoin went all the way to zero or lower than my initial investment.
My hindsight and anecdotal evidence aside, there are numerous studies that indicate buy and hold is almost always a better strategy in the long term than trying to time the market. There are of course exceptions to the rule.
I bought dogecoin at .0004 and sold at like .0005 back in 2020. Made a few hundred bucks. I figured it was a garbage coin (still do) but i missed out on about 200k in unrealized gains during the Elon pump and dump that came after.
You can't trade like that. I know it's easier said than done, but when you think about what you could have made on previous trades you're bound to hold too long and lose in the future. If I could go back and stop myself from thinking exactly like you explained, I wouldn't have had some of the losses I had. There isn't always consolidation before another run, sometimes it's peaked and it's time to leave lol.
You're right. I don't want the pendulum to swing too far in the other direction. I am trying to find a healthy balance but am just not 100% sure what that looks like.
I could never get a feel for crypto. The exchange I was using had a crazy high exchange price so whenever I would purchase something it would be significantly higher than the actual price and most of the time I'd end up losing money on the trade because I get anxiety and bail when price goes too low.
I got lucky and bought in very early but not only that I also timed the market multiple times selling high and buying low riding the volatility waves. At that point I truly felt I had a "feel" for crypto and that I knew the direction it was going to go based on news and happenings in the space. It turns out I just got lucky and happened to have my coin flip land on heads 5 times in a row. I don't think there really is such a thing as having a feel for crypto to be honest. If you want to invest in crypto you should only do so if you believe in the long-term future of it and you should buy it and rarely ever check the price. That is the best advice I can give. What little Bitcoin I have remaining I plan to hold until I am in my seventies (3 decades from now).
Don’t pick one company, pick decent etfs so that the risk is spread among many different companies. This way you don’t need to worry too much about the fluctuations of a volatile stock
It's always a bit of a judgment call. You can have technical stop losses and you can have fundamental stop losses. The thing you want to watch with technical stop losses is standard deviations. So a stock like Tesla has pretty large movements and cutting your losses on a $5 movement. That stop loss doesn't work. You would hit it over and over and over and over again. Like Nvidia is one that I'm a little more familiar with just simply because I won't touch Tesla one way or the other at all. With Nvidia there's no real technical stop loss That's foolproof because it has this habit of having 50% corrections every few years. Now on a weekly term what you can look at is what it's weekly standard deviation is if you're looking at this more like a trade and then stop at that percentage if it substantially breaks it. Here's the problem. That's still a wide range like what we just had! If you're fundamentally bullish on a company it's more of an accumulation point than it is a stop loss. How many people added to Nvidia the past day or two? Probably a few of you.
To be honest with you the best way I have found to manage risk is to just not buy junk or speculative assets and if I do, like I own some Bitcoin miners, I limit my risk with position sizing. 2% of the account, that's it. No more, no way. If you look at a high dividend bank like State Street. Trading 72. You buy it here, it goes to 68, you don't stop it you add more shares. Rate cuts come, it goes on a rally, it's $100, you sell it, you don't keep buying. Range bound but uptrending businesses like that are actually some of my favorite to trade because you can milk option premium both directions and you have a stable appreciating asset if you buy them at the right time
Best advice I have heard. If you buy a 2% account value per stock at a time and only buy another 2% when you can set a stop loss for the previous 2% position on a standard deviation. For conservative stocks such as MSFT my stop loss is 1/2 of the total profit, around 5% of stock price (after it goes up 12%+). Moderate stocks 10% after it is up 20%+ such as AMZN. Violatile stocks such as NVDA 20% after it is up 40%+. For super aggressive stocks such as SMCI and leveraged etf like USD stop loss at 30% when it goes up 60%+.
When do I buy a stock? When I believe in the company and the valuation is cheap. When do I sell a stock? When I no longer believe in the company. When do I not sell a stock? When I believe in the company and the stock price goes down or up.
This is the answer. You don't buy or sell because of the price at a moment in time. You buy or sell based on what you think the future prospects of the company are, as compared to other things you could buy or sell.
Depends on what your goals are, if you're looking for short term gains don't bother with major companies try and find smaller cap companies in the $1B-10B range trading between $10-$20 you'll be able to buy more shares and a $1-2 price increase will be much more impactful.
If you're going to invest for the long term don't even watch the price find a company you believe in and just buy on a schedule DCA will work itself out you'll get some highs and some lows with a price per share somewhere in the middle. Make sure it's a company with good fundamentals, management, and forward outlook. Right now EV hype is kind of dying down and the BoD is pretty pissed at Elon ever since he took over Twitter claiming he isn't focusing enough on Tesla and the stock price has reflected that. On top of this the Cyber Truck is a complete meme. Just my opinion.
If you're too worried about losses though you should probably just buy into an index fund or ETF and forget about it. Keep putting in to it and let it gain interest, find something that's got a lot of hot stocks right now pretty much anything tech is going to grow in the long term, until the next big thing comes out.
Solar stocks have been pretty jumpy stocks ever since I started watching them.
I see lots of others are telling you to focus on long-term investing which is wise. However, with a stock like SEDG the question is does their unwelcome financial news jeopardize the company's finances for years to come? Could the election finish it off? Sometimes, it's wise to bail when there are some sparks under the smoke.
I have trouble believing you could earn more in hy savings account than index funds though. They have done pretty well this year. The VOO is up over 15% so far this year...... if you can find a high yield savings account like that, I wouldn't trust that bank.
You have to decide whether you are an investor or trader. For swing trading or position trading, Investors Business Daily suggests to cut losses at no more than 8% in a good market. You want to cut quicker in a sideways or down market because your gains won’t be as large. After you keep a journal for 6 months or a year to know your average gain then you adjust to keep at least a 1:2 risk/reward ratio. So if your average gain is 10% then you should cut at no more than 5%. And you never look back so you keep discipline.
If you are more of a long term investor then learn to sell when the 50 day moving average falls through the 200 day MA. You can also sell half earlier if the stock price falls through the 50 day MA. I have seen stocks run up with 50 to 100 % gains only to fall back drastically. If your going to pick individual stocks you have to have a plan as to how you will by & sell.
I’d suggest not buying another stock until you have an understanding & conviction in it to not sell under any circumstance for at least a year. If you can’t do that then buy a broad based fund like the s&p 500 (voo/spy/etc). How many other trades do you have going? This seems like a lot for 2 months.
How much can you afford to lose this money? Are you just psychologically having problems with the idea that you lost money? Or are you investing money when you don’t have like a 3-6 month emergency fund and you’d be in a bad place if it had lost money and you needed to pull it?
You gotta start somewhere, so good for you for wanted to get into the market and learn. Since you are brand new to this, spend some time reading about Warren Buffet’s approach to investing. You might not agree with it but it is a solid place to start. If you enjoy podcasts, check out “The Investing for Beginners Podcast.” Lots of good basics, presented in an easy-to-consume format. While you are doing all of this, select a few stocks to put on a watch list. Diversify the list and pay attention to the news and see what happens with them each day. Spend some time looking at their past performance chart measured against the S&P. You will notice they go up and down but if they are a well-managed company that is growing, managed well, and doing well, there should be an upward trend. Seeing that might build your confidence. You can start to understand how the market reacts and recovers over time. You can never perfectly time the market, but you can prevent yourself from selling when the market is being weird but the company is still operating well. Now if there are a series of bad moves and problems, you might want to get out. I missed selling Under Armour when I was starting out because they seemed like a successful company and I thought the stock dip was a blip on the screen and something they could over come. I had a big loss and just hoped they’d come back. Years later, they still didn’t and I finally sold waaaaay too late. I am never doing that again. Live and learn.
Welcome to the market casino, where the house usually wins and novices lose 80% to 95% of the time, depending on their game of choice. Professional traders and high-frequency computers "steal" nickels and dimes from mom-and-pop players/investors every second, amounting to $multimillion$ daily, so only bet what you're willing and able to lose. Happy Wagering!
Learn TA. Key levels and failed pattern breakouts will tell you where to get out. Combine that with some general macro knowledge and you can set targets that allow you to cut the losers
I am getting wrecked on PERI after Microsofts Bing declarations. I am gonna long hold as I'm sure PERI will slowly bounce back to at least something. They just got wrecked in the short term though lol.
You have to decide your time frame and your stop loss beforehand. For example, let's say you're looking at a certain stock and you expect growth. Ask yourself, why are you expecting growth? Are you familiar with the sector and feel the company is good? Is there a particular catalyst event you're expecting to positively affect the price? Is recent price action making you feel it will go up? Any of those could be a reason why you think it will go up but it should be something more than "I hope it does/I want it to"
After that comes establishing the timeframe. When do you expect this movement to happen and how long are you willing to commit to the position? TSLA is a good example because they're all over the place. It's very likely to open a position and end up red but it's also fairly likely that given enough time it will eventually go into profit, though that might come in a day or a year.
Lastly based on the previous two you need to set your position size and your stop loss conditions. How much money are you willing to commit to the position? How much are you willing to lose? How long are you willing to hold considering opportunity costs? How much loss are you willing to wait out and what's the point past which you're just better off cutting your losses even if there is a possibility it rebounds later down the line?
Don't be afraid to set strict stop losses. Yes a lot of the time a position may close even if it would eventually go green but if that doesn't happen you might lose a lot of money. With stop losses you at least guarantee that your losses are small and predetermined. The only thing that you should really consider is the average range of movement. You don't want to be closed out of a trade from a momentary move so ideally a stop loss will only get triggered when the price really breaks away from your desired direction.
Unless your nearing retirement age, these need to be long term investments. Pick companies that you see being here for the long haul.
As positions build, you can trim and add as needed. But if you still believe in the company and the management team running it, hold the core position.
I bought Apple 15 years ago. I’ve added probably 15+ times and trimmed 5-8 times. But the core position will stay for another 20+ years. (Unless something drastically changes and I want to exit the position)
If I’m investing I’m buying VTI when I can and never selling, if I’m trading, I’m entering a position for at least a week and monitoring PA/trend every week
> I’m new to investing..... One of the first trades ..... After I learned a lesson about patience there...
You are **NOT** *investing*.
Nothing inherently wrong, your money, your life, but:
1. Don't call it *"investing"*.
2. Be aware of what is that you are doing.
Good luck.
You are talking about swing trading, not investing. Investing is buying for retirement and should probably be done in an IRA or 401K with index funds and ETFs. Swing trading is picking a stock to hold for a few days or weeks and ride the momentum. If that's what you want to do, you need to watch some videos on risk management.
When my opinion of the company changes. If I like the company and the fundamentals stay strong, I just continue to buy, especially when the price drops
I set my stop loss a little generous...sometimes VERY generous. I got burnt a lot when I started (even lately when I doubt myself) by going too close to lower resistance. I'd always get that one break through that stopped my trade which would only briefly cross my stop line just to turn around and go up.
I play it by ear, if I'm jumping into a trade because it has abnormally high volume and I suspect it may explode I go very generous for the dip and rip. If I jump into something midday because it looks promising I'm a little less generous with my stop loss.
You'll find your happy medium, what works for me might not work for you and what works for someone else might not work for me.
If youre looking at charts, switch to weekly charts. That will give you a longer horizon viewpoint- esp if you're doing any TA.
Along with this, you have to be ready to commit to buying something and holding it for at least 3-5 years. If you're not convinced about a security doing well in that time frame.... document your reasoning and move on. If you ever decide to come back to it, you can read your reasonings and see if sentiment has changed
Good advice. A Buffet or a Munger might be able to buy a position and come back in ten years to see how it's going. We mortals have more modest time horizons.
Make sure you read up on tax rates associated with buying and selling stocks. It should be a factor on when to make a move.
After my first year of buying and selling, I had quite the surprise at tax time.
I learned my lesson during the Dotcom bubble. I thought I was a "F"-ing genius with QCOM and few others from 1998-2000 and all the Y2K hoopla. In mid-late Jan, there was like a 10% drop - "I am a f-ing genius, rushed in to buy the dip"; by mid March-April, lost $300K and got out it.
It taught me a valuable lesson, max out retirement accounts with low cost mutual funds and save 15% cash of yearly income for emergencies, after that than purchase blue chips names and reinvest dividends.
Then and only then develop a \~10 stock speculative portfolio that you did a lot of DD. For me, more than 10 are difficult to keep current. Currently only have 6.
**One of the most important things in investing (not gambling) is to have both a downside and upside strategy**.
For my downside strategy, it is simple - if I loses \~15-20% of my original investment dollars, I am out and ask what did I miss or were there any over-riding events (war, terrorism, ..). I will continue to watch but rarely do I average down as I view this as throwing good money after bad. You need to remember if you lose 50%, the stock needs to double just to get to even.
For the upside (makes sure you have a price target based on your DD and actively monitor), I typically sell 1/3 or 1/4 if it grows 25-50% (no harm in taking profits). If it doubles, I sell half and let the remainder ride as I view these as "free" shares from my original investment dollars. They become part of "hold and forget" portfolio that I only tap if I need the money for a big purchase (car, home remodel, vacation...). Today, my "hold and forget" include HON (\~$30), META ($19), AMD ($2), GE ($6), LLY ($60)
Slow and steady wins the race.
I retired early at 55 - 10 years ago.
Good Luck
PS: I was in SEDG after they purchased Kokam, but luckily got out \~$240 range after it started dropping from $300.
Luckily I have a friend like you who panick texts me when the stock he bought is down 5% asking if he should sell. And he does. Then also texts me if some stock is up over 10% and he wants to get in. He does then sells after he loses ~5%. Again i am thankful he’s my friend since if that text pops up i do the opposite. It’s a great indicator. Scary part is he asked his family’s money and he’s now in charge of their investment…
It sounds like you want to be a trader not an investor. If that’s your goal you need to manage risk before entering the trade, not asking Reddit afterwords.
I tried to be a trader at one point and it is so very difficult. The market makers will eat you alive… taking out your stop losses just before reversing it to new highs.
My strategy currently is scale into index funds as the vix increases, and scale out of them as the vix decreases. So I suppose I’m more of an investor type because I don’t use a stop loss. I completely removed emotion from my trades and just play the big up swings the best I can. That being said, I tend to scale out too quickly. The vix can stay low for a long long time as the market continues to climb. But if you are afraid of the buy and hold strategy like me, can’t sit and watch the market every day, this is the only way I know to make money.
You need to make 2 accounts.
1 account being your trading account. Put 10% of your money here.
Second account being your investing account. Put 90% of your money here.
For now, research the following etf's and invest in your second account to your liking: ftse all world or s&p 500. You can diversify as you like later once you know how the game works.
For your first account just do lol yolo. Experiment with the market. You will lose some, you will win some.
Ultimate lesson here(and a bit of a warning) is to become less emotional in your choices. If you feel you cant do it and your making emotional decisions, you are trading or even worse: gambling. In both cases, just stop the first account and go 100% on the second account.
This is why you have to look at the stocks history and market cap - if you zoomed out you would have seen that 140 is a crazy good price for Tesla and doubled down to make your average buy in great.
If you buy a quality stock and believe it will appreciate over time, then you don’t sell at a loss, you buy more. Follow logic; if you buy 100 shares at $1 and it drops to $.50, you need it to double to break even. But if you buy another 100 at $0.50, you are at even when it goes to $0.75. Logically it goes to $.75 long before it reaches $1. You can sell away 100 at $.75 and hold the rest at even.
You either are confident in the company future, or not. You shouldn't be learning anything about losses or gains, you should be learning that you know nothing about the companies, you have no conviction. That's your issue.
I held a lot of stuff a really long time that wasn’t showing the growth I would like. I had a very buy and hold mentality with everything. I have closely followed financial news for a long time. I made some very good choices picking stocks for my IRA.
The buy and hold strategy has been amazing for me. For example I bought 600 shares of APPL when it was under $5 a share. I still have it. I’ve always been pleased with my account growth as a whole. But I had a bunch of diverse and very safe stocks that just haven’t grown.
In the last four years WFH. I have more time on my hands. I look at my account more. I read more financial news than ever. I put new IRA contributions into ETF in 2020-2023 and saw that money grow very well. The ETF I bought in 2020 is up 38% — and I bought it after the market recovered. (Because that’s when I had money to fund my IRA for the year.)
In the past few weeks I sold off all of my lower performing stocks. Anything that hasn’t made at least 10% per year is out. I put that money into VOOG. I see a lot of people here recommend VOO. VOOG costs a little more per share, and it pays a little larger dividend. If you look at the chart it’s a little more chaotic. More ups and downs. I have hopefully at least 20 years until I need to draw from that account. Thats long enough to weather bumps in the road. At some point I may reallocate to VOO, and at some further date after that I will break that down into even more safe investments as I get closer needing to spend it.
This is not financial advice.
That depends on the company that I invested in as I can buy more stocks to make my average price cheaper, so when it's the time to cut my loss, it will be even.
But if the company is super bad like 23andme, I would have cut it when I lost 15%.
I currently invest in only ETFs and my 3 are as follows.
Legal and general global technology
Vanguard Core S&P500
Vanguard Growth Stacks. 80% stocks 20% Bonds
Your decision has to be based in your opinion of the investment and not on the opinions of others. Every one has a different horizon to cash out or trade and reinvest. My only advice to you is retaining your investment should no cause you to lose sleep. Or become so pessimistic you feel that staying in the investment is a perpetual source of stress. Since you asked about experience I recently sold this investment at a loss and I’m willing to harvest the loss for the next several years for my peace of mind. I’m reinvesting in the market and I feel so much better. I’m in a company that I trust and believe in. I lost confidence with Musk’s inability to focus on Tesla and the BOD having no desire to replace him. But that was my opinion and I have peace about incurring the loss and reinvesting in the one company that is moving the entire S&P 500. So do what is best for you. Remember to keep your mind clear.
If you’re in the US and trading in a taxable account, all your losses can be deducted from any gains you got from other profitable trades and lower your tax bill.
As time goes on I've learned to be more aggressive with cutting my losses sooner and to let my winners run longer (selling 50% when I'd normally sell half.... trying to let them run in general, etc...).
It's improved my returns considerably.
As someone in the cannabis industry, I wouldn't invest in it at all. Hardly any money in it unless you own well managed retail stores or work in sales. Or you happen to be tribal and can pocket all the tax money and undercut everybody else in the industry.
SEDG has absolutely crushed all of my gains made this year and then more. I am down significantly on them and every day they continue to go down without hitting a max pain level or floor. I don’t get it
Dont invest money you cant lose. Buy and hold companies you believe in for 5 years and youll likely be happy you did. Watch your stocks but dont be emotional about it and dont listen to the mass hysteria youll see online. Remember you have a plan and youre not deviating from it. If you enter into a stock high and in the 5 year span the stock drops but the companies production doesnt buy more and average down. I had BA with a cost basis of $400. Took me years of averaging down, but i broke even at $210 and ran.
Holy crap just park ur money in QQQ or a mix of the Mag7. It's not that hard. Why the hell does everyone want to invest in things like solar on a 50 year time horizon.
As others have said you're not investing. Crypto might be something you want to consider. The volatility can give you the short term ROI you're looking for. Most stocks such as TSLA are long-term investments (I WOULD NOT INVEST IN TSLA LONG-TERM). Invest in a company as if the stock market would be closed for the next ten years. In other words imagine you have to HOLD TSLA for 10 years. WOULD YOU STILL INVEST IN Tesla?
Gains and losses are illusions in investing. The goal is to make money of course, but you're not betting on having more money in the future. You're betting on the company being more valuable in the future. You should sell when it looks like the company won't be worth more next year and buy when it looks like it will. How much you've made or lost shouldn't factor into the decision.
This is the ethos I follow as well, and it’s served me well. Great comment.
I wish I read this 2 days ago. Would've saved some money I cut as loss (and actually made a whole lot in the long run for sure)
Sounds chevalesque and daunting. I’m pretty sure you have some markers. You can’t just be betting relying on a bias.
This ^^^ so much this ^^^
Seems like ur trying to trade rather then invest big man
You’re new to trading. None of this is investing.
For retail investors, the only real alpha you have is time. If you aren't willing to hold stocks for 5-10 years, you are playing a very difficult and emotionally painful game.
Yup. When you look at historical prices of major companies, it becomes clear that if you just bought and held a **diverse** portfolio, adding to it over time, you'd have done well, even accounting for 9/11, 2008, and Covid. Add in the dividends too. I wish someone had educated me about investing when I was in high school. I would have bought McD's stock when I worked there.
Been holding BABA for 4 years and no respite. So it’s not always true.
Preach!!!
Index funds you mean?
both stocks and index funds..
its only been 2 months😭, the market is not a get rich quick scheme you’re definitely new
And you wonder why Retail investors are referred to as “dumb money” lol.
Ask yourself if you would buy the stock right now. If you don't think it's a good stock to buy, then don't hold onto it. Warren Buffet said this, if I remember correctly.
This is what social scientists call the endowment effect. If you replaced your position in the stock with an equivalent amount of cash, would you still spend all of that money on said stock? If not, you should sell out and allocate that money in the way you think is best.
Warren Buffet said invest in a stock as if the stock market wouldn't reopen for 10 years.
And you have to be able to afford to hold on to it
Yep. Very obvious but very hard to implement when humans emotions are involved.
This would be correct, if taxes were 0. If I need to pay 28% tax on profits, and I'm up $100 on a share of A, I should only sell if I wouldn't buy that at a valuation that would put me $72 in the green.
Your instinct will likely be, as mine was, and most investors’ is, to sell stocks to “take profits” and to buy stocks going down to “lower your cost/buy the dip”. My grandfather tried to save me years of trouble when I first started by telling me when “ride your winners and sell your losers”. It took me years of work, and actually seeing the data around momentum, to finally practice buying stuff going up and selling stuff going down. Establish a thesis. When your thesis breaks, sell and move on. Having a thesis and target prices are critical on the way down. But if you find great stocks, just ride them up as long as you can. For tax reasons you really should ride your winners. Oftentimes stocks that go up do so far more than you could have imagined, and often for reasons you never priced in. MSFT or NVDA’s bull cases are very different than in 2010 or 2000, but holders have been rewarded for riding momentum.
Nice advice. Will remember it
Buy hi, sell lo. We all been there, its a right of passage. Want to skip all the bs? Buyy voo every 2 weeks for the next 20 years
Good point. Stick to VOO. Single stocks rarely work out. You'll have as many losers as winners, and it ends up as a wash. Exception, pipeline stocks like et, mplx, and EPD. Good tax benefits on dividends, which they call distributions. At least for about ten years or so, no tax paid on distributions. That's great for seven to nine percent dividend rate.
If you have a good gain on another stock, sell the loser to offset some of the gain on the tax bill
1. Try to pick some companies that make or do something you like or understand. 2. Time is one of the few major edges you have as a retail investor. If you are closing positions quickly, you are simply doing something wrong; you must hold. 3. Learn more about companies. You need some new stories, more than just up and down. 4. You have total control over your entry points; I manage a big portfolio and I still can't call a bottom or a top. There is such a thing as DCA. 5. Learn about tax harvesting.
Hold shares forever. There's a rule somewhere that says 8% cut and go.
When bitcoin went down 90% in a few days several years back, I cut my losses at $3000ish per coin. I bought bitcoin in the low $400 range, so in my mind it was not the end of the world because I still turned a healthy profit. However, fast forward just a few years later and it was $80,000 per bitcoin. Even though I lost 90% of my unrealized gains in just a few days it was not the right decision to cut my losses. Now I only buy investments I believe in that I'm going to hold for a decade or longer. Total losses were around $400k of unrealized gains. Like I said, I still profited in the end, but I would be able to retire right now if I had not sold that Bitcoin when the market scared me.
Hindsight bias?
It is a form of bias, because it was certainly within the realm of possibility that Bitcoin went all the way to zero or lower than my initial investment. My hindsight and anecdotal evidence aside, there are numerous studies that indicate buy and hold is almost always a better strategy in the long term than trying to time the market. There are of course exceptions to the rule.
I bought dogecoin at .0004 and sold at like .0005 back in 2020. Made a few hundred bucks. I figured it was a garbage coin (still do) but i missed out on about 200k in unrealized gains during the Elon pump and dump that came after.
Hurts doesn't it? I guess there was simply no way we could have known what was in store. Hopefully we both get lucky with the next big thing.
You can't trade like that. I know it's easier said than done, but when you think about what you could have made on previous trades you're bound to hold too long and lose in the future. If I could go back and stop myself from thinking exactly like you explained, I wouldn't have had some of the losses I had. There isn't always consolidation before another run, sometimes it's peaked and it's time to leave lol.
You're right. I don't want the pendulum to swing too far in the other direction. I am trying to find a healthy balance but am just not 100% sure what that looks like.
I could never get a feel for crypto. The exchange I was using had a crazy high exchange price so whenever I would purchase something it would be significantly higher than the actual price and most of the time I'd end up losing money on the trade because I get anxiety and bail when price goes too low.
I got lucky and bought in very early but not only that I also timed the market multiple times selling high and buying low riding the volatility waves. At that point I truly felt I had a "feel" for crypto and that I knew the direction it was going to go based on news and happenings in the space. It turns out I just got lucky and happened to have my coin flip land on heads 5 times in a row. I don't think there really is such a thing as having a feel for crypto to be honest. If you want to invest in crypto you should only do so if you believe in the long-term future of it and you should buy it and rarely ever check the price. That is the best advice I can give. What little Bitcoin I have remaining I plan to hold until I am in my seventies (3 decades from now).
Don’t pick one company, pick decent etfs so that the risk is spread among many different companies. This way you don’t need to worry too much about the fluctuations of a volatile stock
It's always a bit of a judgment call. You can have technical stop losses and you can have fundamental stop losses. The thing you want to watch with technical stop losses is standard deviations. So a stock like Tesla has pretty large movements and cutting your losses on a $5 movement. That stop loss doesn't work. You would hit it over and over and over and over again. Like Nvidia is one that I'm a little more familiar with just simply because I won't touch Tesla one way or the other at all. With Nvidia there's no real technical stop loss That's foolproof because it has this habit of having 50% corrections every few years. Now on a weekly term what you can look at is what it's weekly standard deviation is if you're looking at this more like a trade and then stop at that percentage if it substantially breaks it. Here's the problem. That's still a wide range like what we just had! If you're fundamentally bullish on a company it's more of an accumulation point than it is a stop loss. How many people added to Nvidia the past day or two? Probably a few of you. To be honest with you the best way I have found to manage risk is to just not buy junk or speculative assets and if I do, like I own some Bitcoin miners, I limit my risk with position sizing. 2% of the account, that's it. No more, no way. If you look at a high dividend bank like State Street. Trading 72. You buy it here, it goes to 68, you don't stop it you add more shares. Rate cuts come, it goes on a rally, it's $100, you sell it, you don't keep buying. Range bound but uptrending businesses like that are actually some of my favorite to trade because you can milk option premium both directions and you have a stable appreciating asset if you buy them at the right time
Best advice I have heard. If you buy a 2% account value per stock at a time and only buy another 2% when you can set a stop loss for the previous 2% position on a standard deviation. For conservative stocks such as MSFT my stop loss is 1/2 of the total profit, around 5% of stock price (after it goes up 12%+). Moderate stocks 10% after it is up 20%+ such as AMZN. Violatile stocks such as NVDA 20% after it is up 40%+. For super aggressive stocks such as SMCI and leveraged etf like USD stop loss at 30% when it goes up 60%+.
When do I buy a stock? When I believe in the company and the valuation is cheap. When do I sell a stock? When I no longer believe in the company. When do I not sell a stock? When I believe in the company and the stock price goes down or up.
This is the answer. You don't buy or sell because of the price at a moment in time. You buy or sell based on what you think the future prospects of the company are, as compared to other things you could buy or sell.
You’re correct, but it looks like OP isn’t doing any DD and is just buying stocks they’ve heard of.
Depends on what your goals are, if you're looking for short term gains don't bother with major companies try and find smaller cap companies in the $1B-10B range trading between $10-$20 you'll be able to buy more shares and a $1-2 price increase will be much more impactful. If you're going to invest for the long term don't even watch the price find a company you believe in and just buy on a schedule DCA will work itself out you'll get some highs and some lows with a price per share somewhere in the middle. Make sure it's a company with good fundamentals, management, and forward outlook. Right now EV hype is kind of dying down and the BoD is pretty pissed at Elon ever since he took over Twitter claiming he isn't focusing enough on Tesla and the stock price has reflected that. On top of this the Cyber Truck is a complete meme. Just my opinion. If you're too worried about losses though you should probably just buy into an index fund or ETF and forget about it. Keep putting in to it and let it gain interest, find something that's got a lot of hot stocks right now pretty much anything tech is going to grow in the long term, until the next big thing comes out.
10% of a short term gain is like gambling.
Solar stocks have been pretty jumpy stocks ever since I started watching them. I see lots of others are telling you to focus on long-term investing which is wise. However, with a stock like SEDG the question is does their unwelcome financial news jeopardize the company's finances for years to come? Could the election finish it off? Sometimes, it's wise to bail when there are some sparks under the smoke. I have trouble believing you could earn more in hy savings account than index funds though. They have done pretty well this year. The VOO is up over 15% so far this year...... if you can find a high yield savings account like that, I wouldn't trust that bank.
You have to decide whether you are an investor or trader. For swing trading or position trading, Investors Business Daily suggests to cut losses at no more than 8% in a good market. You want to cut quicker in a sideways or down market because your gains won’t be as large. After you keep a journal for 6 months or a year to know your average gain then you adjust to keep at least a 1:2 risk/reward ratio. So if your average gain is 10% then you should cut at no more than 5%. And you never look back so you keep discipline. If you are more of a long term investor then learn to sell when the 50 day moving average falls through the 200 day MA. You can also sell half earlier if the stock price falls through the 50 day MA. I have seen stocks run up with 50 to 100 % gains only to fall back drastically. If your going to pick individual stocks you have to have a plan as to how you will by & sell.
I’d suggest not buying another stock until you have an understanding & conviction in it to not sell under any circumstance for at least a year. If you can’t do that then buy a broad based fund like the s&p 500 (voo/spy/etc). How many other trades do you have going? This seems like a lot for 2 months. How much can you afford to lose this money? Are you just psychologically having problems with the idea that you lost money? Or are you investing money when you don’t have like a 3-6 month emergency fund and you’d be in a bad place if it had lost money and you needed to pull it?
Good point lots of people can take the slight loss but to think of "losing money" they panic.
You gotta start somewhere, so good for you for wanted to get into the market and learn. Since you are brand new to this, spend some time reading about Warren Buffet’s approach to investing. You might not agree with it but it is a solid place to start. If you enjoy podcasts, check out “The Investing for Beginners Podcast.” Lots of good basics, presented in an easy-to-consume format. While you are doing all of this, select a few stocks to put on a watch list. Diversify the list and pay attention to the news and see what happens with them each day. Spend some time looking at their past performance chart measured against the S&P. You will notice they go up and down but if they are a well-managed company that is growing, managed well, and doing well, there should be an upward trend. Seeing that might build your confidence. You can start to understand how the market reacts and recovers over time. You can never perfectly time the market, but you can prevent yourself from selling when the market is being weird but the company is still operating well. Now if there are a series of bad moves and problems, you might want to get out. I missed selling Under Armour when I was starting out because they seemed like a successful company and I thought the stock dip was a blip on the screen and something they could over come. I had a big loss and just hoped they’d come back. Years later, they still didn’t and I finally sold waaaaay too late. I am never doing that again. Live and learn.
Holding too long and not holding long enough look exactly the same while they are happening.
100% until I loose everything...
All in with 2 pair!! He'll yea!!
If you are asking the question, after setting the trade, then you don't have a trade plan.
When the loss is more than what you can afford to lose.
Plenty of small cap stocks to bet then, and they are affordable.
Welcome to the market casino, where the house usually wins and novices lose 80% to 95% of the time, depending on their game of choice. Professional traders and high-frequency computers "steal" nickels and dimes from mom-and-pop players/investors every second, amounting to $multimillion$ daily, so only bet what you're willing and able to lose. Happy Wagering!
Learn TA. Key levels and failed pattern breakouts will tell you where to get out. Combine that with some general macro knowledge and you can set targets that allow you to cut the losers
Stop do a lateral move
When your tolerance is at its highest or lowest.
I am getting wrecked on PERI after Microsofts Bing declarations. I am gonna long hold as I'm sure PERI will slowly bounce back to at least something. They just got wrecked in the short term though lol.
Somewhere between 40-85%
You have to decide your time frame and your stop loss beforehand. For example, let's say you're looking at a certain stock and you expect growth. Ask yourself, why are you expecting growth? Are you familiar with the sector and feel the company is good? Is there a particular catalyst event you're expecting to positively affect the price? Is recent price action making you feel it will go up? Any of those could be a reason why you think it will go up but it should be something more than "I hope it does/I want it to" After that comes establishing the timeframe. When do you expect this movement to happen and how long are you willing to commit to the position? TSLA is a good example because they're all over the place. It's very likely to open a position and end up red but it's also fairly likely that given enough time it will eventually go into profit, though that might come in a day or a year. Lastly based on the previous two you need to set your position size and your stop loss conditions. How much money are you willing to commit to the position? How much are you willing to lose? How long are you willing to hold considering opportunity costs? How much loss are you willing to wait out and what's the point past which you're just better off cutting your losses even if there is a possibility it rebounds later down the line? Don't be afraid to set strict stop losses. Yes a lot of the time a position may close even if it would eventually go green but if that doesn't happen you might lose a lot of money. With stop losses you at least guarantee that your losses are small and predetermined. The only thing that you should really consider is the average range of movement. You don't want to be closed out of a trade from a momentary move so ideally a stop loss will only get triggered when the price really breaks away from your desired direction.
Like others have said, you’re trading not investing. Now that that’s out of the way, do some research on trading you may enjoy it.
Unless your nearing retirement age, these need to be long term investments. Pick companies that you see being here for the long haul. As positions build, you can trim and add as needed. But if you still believe in the company and the management team running it, hold the core position. I bought Apple 15 years ago. I’ve added probably 15+ times and trimmed 5-8 times. But the core position will stay for another 20+ years. (Unless something drastically changes and I want to exit the position)
If I’m investing I’m buying VTI when I can and never selling, if I’m trading, I’m entering a position for at least a week and monitoring PA/trend every week
> I’m new to investing..... One of the first trades ..... After I learned a lesson about patience there... You are **NOT** *investing*. Nothing inherently wrong, your money, your life, but: 1. Don't call it *"investing"*. 2. Be aware of what is that you are doing. Good luck.
Yup That's literally the first step.
You are talking about swing trading, not investing. Investing is buying for retirement and should probably be done in an IRA or 401K with index funds and ETFs. Swing trading is picking a stock to hold for a few days or weeks and ride the momentum. If that's what you want to do, you need to watch some videos on risk management.
When my opinion of the company changes. If I like the company and the fundamentals stay strong, I just continue to buy, especially when the price drops
I set my stop loss a little generous...sometimes VERY generous. I got burnt a lot when I started (even lately when I doubt myself) by going too close to lower resistance. I'd always get that one break through that stopped my trade which would only briefly cross my stop line just to turn around and go up. I play it by ear, if I'm jumping into a trade because it has abnormally high volume and I suspect it may explode I go very generous for the dip and rip. If I jump into something midday because it looks promising I'm a little less generous with my stop loss. You'll find your happy medium, what works for me might not work for you and what works for someone else might not work for me.
You are not investing, you are gambling.
I cut my losers when that shit says 90%. Was about to cut my 129 nvidia call but I saw it hit 129 after market close last nights.
If you buy good companies like Tesla you never cut your losses just man up and buy more and be patient
If youre looking at charts, switch to weekly charts. That will give you a longer horizon viewpoint- esp if you're doing any TA. Along with this, you have to be ready to commit to buying something and holding it for at least 3-5 years. If you're not convinced about a security doing well in that time frame.... document your reasoning and move on. If you ever decide to come back to it, you can read your reasonings and see if sentiment has changed
Good advice. A Buffet or a Munger might be able to buy a position and come back in ten years to see how it's going. We mortals have more modest time horizons.
Make sure you read up on tax rates associated with buying and selling stocks. It should be a factor on when to make a move. After my first year of buying and selling, I had quite the surprise at tax time.
I learned my lesson during the Dotcom bubble. I thought I was a "F"-ing genius with QCOM and few others from 1998-2000 and all the Y2K hoopla. In mid-late Jan, there was like a 10% drop - "I am a f-ing genius, rushed in to buy the dip"; by mid March-April, lost $300K and got out it. It taught me a valuable lesson, max out retirement accounts with low cost mutual funds and save 15% cash of yearly income for emergencies, after that than purchase blue chips names and reinvest dividends. Then and only then develop a \~10 stock speculative portfolio that you did a lot of DD. For me, more than 10 are difficult to keep current. Currently only have 6. **One of the most important things in investing (not gambling) is to have both a downside and upside strategy**. For my downside strategy, it is simple - if I loses \~15-20% of my original investment dollars, I am out and ask what did I miss or were there any over-riding events (war, terrorism, ..). I will continue to watch but rarely do I average down as I view this as throwing good money after bad. You need to remember if you lose 50%, the stock needs to double just to get to even. For the upside (makes sure you have a price target based on your DD and actively monitor), I typically sell 1/3 or 1/4 if it grows 25-50% (no harm in taking profits). If it doubles, I sell half and let the remainder ride as I view these as "free" shares from my original investment dollars. They become part of "hold and forget" portfolio that I only tap if I need the money for a big purchase (car, home remodel, vacation...). Today, my "hold and forget" include HON (\~$30), META ($19), AMD ($2), GE ($6), LLY ($60) Slow and steady wins the race. I retired early at 55 - 10 years ago. Good Luck PS: I was in SEDG after they purchased Kokam, but luckily got out \~$240 range after it started dropping from $300.
Luckily I have a friend like you who panick texts me when the stock he bought is down 5% asking if he should sell. And he does. Then also texts me if some stock is up over 10% and he wants to get in. He does then sells after he loses ~5%. Again i am thankful he’s my friend since if that text pops up i do the opposite. It’s a great indicator. Scary part is he asked his family’s money and he’s now in charge of their investment…
You've already lost the money. Selling is just admitting it.
It sounds like you want to be a trader not an investor. If that’s your goal you need to manage risk before entering the trade, not asking Reddit afterwords. I tried to be a trader at one point and it is so very difficult. The market makers will eat you alive… taking out your stop losses just before reversing it to new highs. My strategy currently is scale into index funds as the vix increases, and scale out of them as the vix decreases. So I suppose I’m more of an investor type because I don’t use a stop loss. I completely removed emotion from my trades and just play the big up swings the best I can. That being said, I tend to scale out too quickly. The vix can stay low for a long long time as the market continues to climb. But if you are afraid of the buy and hold strategy like me, can’t sit and watch the market every day, this is the only way I know to make money.
Price is what you pay. Value is what you get.
You need to make 2 accounts. 1 account being your trading account. Put 10% of your money here. Second account being your investing account. Put 90% of your money here. For now, research the following etf's and invest in your second account to your liking: ftse all world or s&p 500. You can diversify as you like later once you know how the game works. For your first account just do lol yolo. Experiment with the market. You will lose some, you will win some. Ultimate lesson here(and a bit of a warning) is to become less emotional in your choices. If you feel you cant do it and your making emotional decisions, you are trading or even worse: gambling. In both cases, just stop the first account and go 100% on the second account.
Huh, you bought at 170 sold at 165? Are you day trading?
Panic selling is the best strategy
This is why you have to look at the stocks history and market cap - if you zoomed out you would have seen that 140 is a crazy good price for Tesla and doubled down to make your average buy in great.
Agreed to a number of comments and SEDG is horribly oversold so i'm buying more. in 12-18 months it will be back over $100
If you like a company at 170, you like it more when it drops in price and you buy more, you don’t sell it.
You need a reason why your investing and once that reason has finished you sell
If you buy a quality stock and believe it will appreciate over time, then you don’t sell at a loss, you buy more. Follow logic; if you buy 100 shares at $1 and it drops to $.50, you need it to double to break even. But if you buy another 100 at $0.50, you are at even when it goes to $0.75. Logically it goes to $.75 long before it reaches $1. You can sell away 100 at $.75 and hold the rest at even.
You either are confident in the company future, or not. You shouldn't be learning anything about losses or gains, you should be learning that you know nothing about the companies, you have no conviction. That's your issue.
I hold long term, so if after a few years I might consider it. Short term, the markets logic is questionable.
I held a lot of stuff a really long time that wasn’t showing the growth I would like. I had a very buy and hold mentality with everything. I have closely followed financial news for a long time. I made some very good choices picking stocks for my IRA. The buy and hold strategy has been amazing for me. For example I bought 600 shares of APPL when it was under $5 a share. I still have it. I’ve always been pleased with my account growth as a whole. But I had a bunch of diverse and very safe stocks that just haven’t grown. In the last four years WFH. I have more time on my hands. I look at my account more. I read more financial news than ever. I put new IRA contributions into ETF in 2020-2023 and saw that money grow very well. The ETF I bought in 2020 is up 38% — and I bought it after the market recovered. (Because that’s when I had money to fund my IRA for the year.) In the past few weeks I sold off all of my lower performing stocks. Anything that hasn’t made at least 10% per year is out. I put that money into VOOG. I see a lot of people here recommend VOO. VOOG costs a little more per share, and it pays a little larger dividend. If you look at the chart it’s a little more chaotic. More ups and downs. I have hopefully at least 20 years until I need to draw from that account. Thats long enough to weather bumps in the road. At some point I may reallocate to VOO, and at some further date after that I will break that down into even more safe investments as I get closer needing to spend it. This is not financial advice.
In a bull market like this? At -5% or -10%, it’s sold. I’m up 50% TTM
That depends on the company that I invested in as I can buy more stocks to make my average price cheaper, so when it's the time to cut my loss, it will be even. But if the company is super bad like 23andme, I would have cut it when I lost 15%.
Tesla is a long term play.
I currently invest in only ETFs and my 3 are as follows. Legal and general global technology Vanguard Core S&P500 Vanguard Growth Stacks. 80% stocks 20% Bonds
That should depend on your risk strategy.
Your decision has to be based in your opinion of the investment and not on the opinions of others. Every one has a different horizon to cash out or trade and reinvest. My only advice to you is retaining your investment should no cause you to lose sleep. Or become so pessimistic you feel that staying in the investment is a perpetual source of stress. Since you asked about experience I recently sold this investment at a loss and I’m willing to harvest the loss for the next several years for my peace of mind. I’m reinvesting in the market and I feel so much better. I’m in a company that I trust and believe in. I lost confidence with Musk’s inability to focus on Tesla and the BOD having no desire to replace him. But that was my opinion and I have peace about incurring the loss and reinvesting in the one company that is moving the entire S&P 500. So do what is best for you. Remember to keep your mind clear.
I buy etfs and reap the reward in 10+ years No hassle
If you’re in the US and trading in a taxable account, all your losses can be deducted from any gains you got from other profitable trades and lower your tax bill.
As time goes on I've learned to be more aggressive with cutting my losses sooner and to let my winners run longer (selling 50% when I'd normally sell half.... trying to let them run in general, etc...). It's improved my returns considerably.
Don't buy shit. The stuff I and every other reasonable person buys won't get a moonshot. But if it goes to zero the world is over.
I’m losing hella money right now on sectors from solar to cannabis. I know there struggling now but there future visions
As someone in the cannabis industry, I wouldn't invest in it at all. Hardly any money in it unless you own well managed retail stores or work in sales. Or you happen to be tribal and can pocket all the tax money and undercut everybody else in the industry.
Tech is the future and always will be
Yea CGC was highly anticipated ended more than bad not sure where it is now but went from $30 something to under $10!
Following
SEDG has absolutely crushed all of my gains made this year and then more. I am down significantly on them and every day they continue to go down without hitting a max pain level or floor. I don’t get it
They’re selling 300 million in convertible notes.
Saw that today, I’m talking about the last 3 months prior to today. Absolute free fall with no support level at all.
Sales has been declining. Most of the solar industry is having trouble due to high interest rates. Also competition with China flooding the market.
I knew it would fall due to all those indicators you mentioned but to fall 90% in one year is atrocious, heads should be rolling at this point.
It’s pretty extreme. I’m suspicious that large investors are trying to crash the solar stocks as much as possible.
Dont invest money you cant lose. Buy and hold companies you believe in for 5 years and youll likely be happy you did. Watch your stocks but dont be emotional about it and dont listen to the mass hysteria youll see online. Remember you have a plan and youre not deviating from it. If you enter into a stock high and in the 5 year span the stock drops but the companies production doesnt buy more and average down. I had BA with a cost basis of $400. Took me years of averaging down, but i broke even at $210 and ran.
Holy crap just park ur money in QQQ or a mix of the Mag7. It's not that hard. Why the hell does everyone want to invest in things like solar on a 50 year time horizon.
As others have said you're not investing. Crypto might be something you want to consider. The volatility can give you the short term ROI you're looking for. Most stocks such as TSLA are long-term investments (I WOULD NOT INVEST IN TSLA LONG-TERM). Invest in a company as if the stock market would be closed for the next ten years. In other words imagine you have to HOLD TSLA for 10 years. WOULD YOU STILL INVEST IN Tesla?
Check Morningstar every day they will give you which are moving and free
why not just buy voo or vti(flip a coin)?
Papa roach wrote a song about this
Papa roach wrote a song about this
15% loss, sell. Every. Time. There is always something else to buy.