Why you should take heed of the stock market adage: Let your winners run

Julie Brownlee, Fsp Invest, 19 Dec. 2014

Tags: investing, let your winners run, selling shares, when to sell shares, stock market, investing in the stock market, emotion,



When you invest in a stock and it starts to perform, chances are you’ll start to get a nagging feeling that it’s time to think about selling.

This is a common investment problem. Investor are scared that the share price will do an about turn and wipe out their gains. So they sacrifice potential future gains and sell.

You need to take selling out of your mind. Just because a share price rises doesn’t mean it can’t rise further.

So it’s vital to stick with the stock market adage, let your winners run.

Here’s why…



The key to growing your wealth through investing


When you invest in a share and it starts to do well, you can’t start thinking about selling it. It’s a sure way of never growing wealthy through investing.

Once a share rises 10%, 20% or 30%, you may be itching to get on the phone to your broker to tell him to sell your shares. But this is something you shouldn’t do.

Unfortunately it’s something many investors do.

You have to give yourself the chance to have a big winner, Dr Steve Sjuggerud in Daily Wealth explains.

Throughout your investing lifetime, only a handful of your shares will be big winners. By bailing out early, you’re giving up this potential.

To stand the chance of bagging a big winner, you have to let your investment rise in price, without selling.


You shouldn’t sell a share based on emotion


Thinking that a stock can’t continue to rise because it already has doesn’t make investment sense. This reaction only has emotion as its basis.

Unless you have hard facts that point to you selling a share, you shouldn’t. Unless fundamentals point to a share price rout ahead or the share price hits your stop loss, don’t sell.

Sell early with no good reason and chances are your investments will always underperform the market.

So there you have it. Why you should take heed of the stock market adage, let your winners run.

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