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Sell in crisis and buy back more when price is lower

QuestionsCategory: Investor PsychologySell in crisis and buy back more when price is lower
Triple8 asked 7 years ago
TripleEight replied 7 years ago

If I bought shares in a great company with the intent to hold for good yield and growth. Global bad news surfaced and I know Mr Market is going to create panic and hence cause prices to fall the next few days.In your topic on “Patience and Conviction”, you mentioned that as long as you’re confident of your research and long term growth potential of your investments, you should have the conviction to hold in spite of all the noise around you. My question is: Wouldn’t it be wiser to sell off your investment immediately (and lock-in whatever profit made) and then buy it later at a lower price again (now can even buy more with profit made)? This strategy is also in line with taking advantage of making volatility your friend, isn’t it?

1 Answers
Rusmin Ang Staff answered 7 years ago

Hi Triple Eight,   
 
Yes, it sounds like a perfect strategy. But from my experience, it is difficult to execute (time) it perfectly as no one knows exactly which direction the market will go next. Unless the stocks you are holding are highly overvalued, then you may consider doing so. Otherwise, it might be better to hold on.