Let's discuss profit taking. 💰
Overwhelmingly, we are still analyzing fair prices, looking for dips, and predicting potential growth. But when we get there, when do we actually pick profits ?
I would like to discuss this. We are all different of course I hope for different opinions, perspectives. Next, let's not mix trade into this at all. Let's make cases that we hold a stock for at least one quarter. I guess we are all long term investors here. Some of us are even playing around with trading. Further, I think even most of us will agree when I write the statement that long term means 20 years of holding for example, period. I just have to make capital somewhere else and invest it or reinvest the dividends.
Of course, though I know all these methods. Still, after all, in investing, we also want gains not just dividends and to continue to appreciate those and not just look at growth curves for 20 years for example. 📈
We now have the vast majority of the Indices on new or current ATH. We see that growth is mainly just due to large companies in the tech sector driven by AI. Many of us are profiting now on Meta, Nvidia, Microsoft ...and more, I could find a few more. I'm certainly not arguing that one should get rid of any of these stocks altogether. However, some of the titles are already really high and I think that with some certainty some correction is bound to hit them ...which is why I often ask and wonder what about divesting some of it, taking the profits and reinvesting them somewhere where the price is still low, where high rates are keeping the sector still down, or simply where buying makes more sense to me than overbuying these technologies at high prices now. And then buying them back when they fall. 😊
Are you thinking that way too? Do you have a strategy of eventually selling the company, or just selling a portion of your portfolio and reinvesting the profits in undervalued stocks? For example, if you take profits, does that make up 20-30% and let the rest keep working? 💰