Jan 27 2020, 01:10 PM
QUOTE(moosset @ Jan 27 2020, 09:14 AM)
for those without dividend, for example an ETF that doesn't distribute dividend, if I sell it to take some profit and buy it again, doesn't it look silly?
but if I don't sell, then it takes a dip and stuck there for years, then how?
for dividend stocks, it's no problem. For growth stocks, how do we handle this?
For dividends stocks, once it go ex, the prices will drop. So in effect you are also selling out/take profit. Only in this case, you are forced to, not by choice. U can then use the dividends to spend, or invest in another stock with better risk/reward or reinvest in that stock again.but if I don't sell, then it takes a dip and stuck there for years, then how?
for dividend stocks, it's no problem. For growth stocks, how do we handle this?
For pure capital gains, now you have a choice. Here, you are not forced to take profit. You sell it because you need the money or you see other better opportunities in terms of risk/reward.
For etf, say it has performed well but you are starting to get a bit nervous but at same time you are FOMO. You can first stop adding more money into it, and leave it be n monitor. If you are DCA type, then that already reduce ur risks.
If you get more nervous, then you can take some money off the table. You don't have to sell it all or even most.just a small %, as long as the transaction cost makes sense. Fund investors call this"rebalancing". You can put the proceeds into another stock or etf.
In my case, I have price target. Hit target then it will be on watch list to sell, but I wont sell yet until it reach some sort of resistance. I will then sell some, most or all depending on the outlook as I see it.
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