vtsnowedin wrote:theluckycountry wrote:vtsnowedin wrote:Not a chance of that. I will let these three ride for at least five years if not ten.
So you don't have any sell rules? They are not houses you know, they are stocks, and anything can happen to stocks, anything at all in this wacky market. I don't dabble in stocks, only in Australian government bonds, and of course gold and silver.
My main rule is "to Buy and HOLD!!"
I have no rule to sell a stock because of price fluctuations.
When I do need cash from the account I try to pick both losers and sellers that have shown me some negative information about their prospects after I bought them. Even then I have several I have sold for needed cash that I will likely repurchase when funds are available.
I buy a stock because of a thesis. My thesis could be wrong, so I diversify.
I wonder about what I would do in the face of some sort of market crash that really pared value? I think I would stick to my guns. But it depends, how much of a haircut are we talking?
I can absorb a twenty percent pull back. I can't take an eighty percent one. There's a lot of room between those. Most people are probably not aware that even good stocks can move around that much, twenty percent or more, easily, in a year.
If I am truly holding, and my thesis is sound enough that I should understand everything will come back, then only fear can make me sell. Fear could make me engage in market timing, as well. I think people like to call it greed that does that, but it would probably be fear.
Because I tell you what, market timing is a thing of pride, where we think we can pull it off. Uncertainty is much more prevalent than whatever it is we thought we saw. Market timing is like gambling, far closer to it than buy and hold. You can get scared into it, by some troll who comes along and tells you to be afraid.
That said, I do engage in some forms of market timing. I own both bank and energy stocks that I figure should go up with inflation. Energy should gain over the next year, before rising rates tamp down prices. The Fed has to work gradually, so I expect a barrel of oil to go over $100. Banks should go up until the rate rising cycles ends, three or four years from now. Both of those efforts are diversified, in that I am not pinning all of my hopes for these moves on one stock in a sector. I am also not putting an entire paycheck in after any one target. You have to gauge your risk, and not enter into too much of it. You always have to be thinking things may not go your way. Just because you have pride does not mean uncertainty will respect you, though.
I say, make sure your thesis is sound. Revisit the reasons for it, from time to time. Argue with yourself anew, every once in while, about the future. But do not make all of your financial decisions based upon fear. That's just a recipe for being jealous of all of those others who weren't afraid, and offering a litany of excuses instead of changing your attitude.
