Massive Profits...Now what?

[GiaAlpha]

Hi , I am 25 yrs old and started investing 3 years ago with the money I received from family to start off life. I dont know much on managing investments but I have made some good returns. Some stocks in my portfolio are up over 100% and with my losses limited at only -10%. Furthermore last year I started a separate tech portfolio and now the major holdings are up between 63% - 40%. Should I sell now and lock in profits on my big winners?

The service I use to find these stocks recommends holding 3-5 years but mostly what I read about these companies online is people saying they are bubbles and the price is not backed fundamentally anymore. During last years sell off I was able to sit still because gains were around the 20's. But since the start of this year the tech stocks have shot up like crazy to new highs. Should I consider myself lucky and take what I have? My risk tolerance is pretty high considering i'm sitting on good profits.

 

[tomorton]

Sell now and bank the profits. Or at least move your stop-loss on each profitable holding closer to the current price to protect your gains.

A good principle to follow in investing is to know why you're buying something, and there should be several factors. These can be fundamental, technical (chart-based) or a blend of both. Later, as the trade progresses, you can re-assess where price is in relation to these factors: if most of them have now disappeared or turned negative, such that you wouldn't be buying here at all, then the only answer is sell. But you have to know what they were in the first place and how to assess them on a continuing basis.

 

[Silverston]

Hi , I am 25 yrs old and started investing 3 years ago with the money I received from family to start off life. I dont know much on managing investments but I have made some good returns. Some stocks in my portfolio are up over 100% and with my losses limited at only -10%. Furthermore last year I started a separate tech portfolio and now the major holdings are up between 63% - 40%. Should I sell now and lock in profits on my big winners?

The service I use to find these stocks recommends holding 3-5 years but mostly what I read about these companies online is people saying they are bubbles and the price is not backed fundamentally anymore. During last years sell off I was able to sit still because gains were around the 20's. But since the start of this year the tech stocks have shot up like crazy to new highs. Should I consider myself lucky and take what I have? My risk tolerance is pretty high considering i'm sitting on good profits.

Ask yourself whether you would still buy these same stocks now, today? a trailing stop loss is a psychologically easy way to get out of these positions without feeling you are losing out on further upside. It is much easier to assess the market with a clear head when you are not holding a position in it, perhaps it is time to bank a good proportion of these profits and retain some holdings too but more focussed, fewer shares, that you can monitor easily maybe up to 5 companies/markets. Yes I think you probably got lucky, but now you get to make your own luck!

 

[hatemypips]

Hi , I am 25 yrs old and started investing 3 years ago with the money I received from family to start off life. I dont know much on managing investments but I have made some good returns. Some stocks in my portfolio are up over 100% and with my losses limited at only -10%. Furthermore last year I started a separate tech portfolio and now the major holdings are up between 63% - 40%. Should I sell now and lock in profits on my big winners?

The service I use to find these stocks recommends holding 3-5 years but mostly what I read about these companies online is people saying they are bubbles and the price is not backed fundamentally anymore. During last years sell off I was able to sit still because gains were around the 20's. But since the start of this year the tech stocks have shot up like crazy to new highs. Should I consider myself lucky and take what I have? My risk tolerance is pretty high considering i'm sitting on good profits.

Yes the boom phase is going to end soon and everything will plunge or at least there will be strong correction. Probably the luck was on your side but I would recommend you to set profit and loss targets for next investments if you want to avoid losing emotional balance in case of unexpected loss which is fraught with silly mistakes.