taking profits

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Im still a new investor, and I have a hard time conceptualizing the idea of taking profits.
I need a good video to explain the concept. I owned 3 shares of SMCI average $250. I sold one share at $675 and just riding the other out. I bought Google awhile ago and am solid in the green, but why sell? What do I do with the money when I sell? It just seems like a concept I dont understand well. I contribute to my accounts each week and I just buy… selling seems strange to me.

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Asked on March 22, 2024 3:59 pm
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Great Advise @Dan Kent!………I purchased HD about 20 years ago when my FA recommended it to me, 3 years later it had run up about 35%…..he recommended selling, but I resisted…………sure glad I went with my Gut Instinct and just “ Let it Ride” 🤓…………still holding HD and sure glad I did 😀

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Posted by Rick Reeves
Answered on March 24, 2024 2:57 am
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If selling seems strange to you you are likely on the right path. Stocks should be purchased with the intentions to never sell. Sure, the investment thesis can change and there will be plenty of stocks you choose to move on from over the course of your investing career but for the most part, when I buy a stock, I buy it planning to hold it indefinitely.

The only time I do end up selling is when I rebalance. I typically look at my portfolio on an annual basis and make small tweaks to rebalance positions back to proper allocations. However, in this instance I may even let a company that is doing quite well and has grown to a large allocation ride it out. For example, my target allocation for Bitcoin is a 5%~ position in my portfolio. But with the current runup, I chose not to rebalance, letting it get all the way up to nearly 10% before I shaved off a third of my position.

Ultimately rebalancing is personal preference. I know some who rebalance a lot, and some who don't rebalance at all and instead offset position sizes with new contributions. This obviously gets a bit more difficult as your portfolio gets larger, but it's still possible over longer periods of time.

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Posted by Dan Kent
Answered on March 23, 2024 10:35 am