I still have a problem of selling stocks when I know I need to dump – profit or not.
I have read enough to know that long-term holding of stocks may be a moot issue right now for several reasons.
1. I may not have a long-term horizon at my age, although it is longer than a lot of investors.
2. Economic outlooks with tremendously high sovereign debts, population growth, Government inability to get a handle on debts, Governments throwing (Growing) money at “crap shoots”, comsumers appearing to be paying down some debts, etc…
3. The multiple leveraged positions – include personal loans outstanding and business loans.
4. Even Jim Cramer has been spouting of late that “long-term holding is dead”…
The reality and most important stuff I see from all of it is – invest when “you” think it will appreciate in value or pay enough dividend to be worthwhile. Get the Hell out when any of your reasons for getting in have changed… Take the loss and learn from that – rework your evaluations and try not to make as many mistakes the next time… (wonderful advice – near impossible to accomplish? ). But in my case I have hung with stocks because I just knew they would come back… Bull… when they get in trouble you better get out and look for something better that has a chance to grow… no matter… They may come back but you have no clue when… Read this today and worth sticking in here:
Bill Gross recently stated: “The burden of debt can take decades to accumulate, but only a few short months to change course into crisis. Many investors, economists and politicians alike have little understanding of why attitudes and lending standards can reverse so quickly…They operate with the mindset that markets, jobs and economies will “come back.” “I’ll just wait ‘till it comes back” is the common saw amongst underwater investors, just as “something will turn up” is a sad refrain of many unemployed or underemployed workers. Sometimes it doesn’t come back…”
This is the problem that Japan has been facing for the last 25 years. By putting assets on their books at “face value” and waiting for prices to come back, combined with low-interest rates, massive liquidity injections and Keynesian policies the country has been mired in a slow growth economic environment. Like Bill Gross stated above ? “…Sometimes it doesn’t come back”
I need to remember this and practice “stop-loss” selling a whole lot more in the future… for both good and bad stocks… take some off the winners, dump the losers before they take it all…