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How Long Do You Let Your Winners Win?
Posted on 8/3/25 at 9:11 pm
Posted on 8/3/25 at 9:11 pm
What’s the consensus (or is there one) on letting winners win?
Does the recognizable name of the stock have anything to do with it - such as MSFT, NVDA, META, etc., versus some small cap stock that has “made it” that you either got lucky on or were in early based on very good due diligence? Does portfolio balance play a factor? What other things can influence this decision?
I’ve been interested in this question not only from an investment side but also from a psychological side for a while. My specific example is PLTR. I got in decently early (should have accumulated and held from the very beginning, but that’s a different story) and am almost up 600%. Also as it’s grown, it is now approaching 50% of my personal investment portfolio, not from lack of owning other stocks, but just the rapid rate of its growth (401k is separate and properly allocated).
Investment-wise it may be prudent to sell some the reallocate, but psychologically I don’t know if I can bring myself to sell something I made a good decision on that has turned out successfully.
Very interested in the board’s thoughts.
Does the recognizable name of the stock have anything to do with it - such as MSFT, NVDA, META, etc., versus some small cap stock that has “made it” that you either got lucky on or were in early based on very good due diligence? Does portfolio balance play a factor? What other things can influence this decision?
I’ve been interested in this question not only from an investment side but also from a psychological side for a while. My specific example is PLTR. I got in decently early (should have accumulated and held from the very beginning, but that’s a different story) and am almost up 600%. Also as it’s grown, it is now approaching 50% of my personal investment portfolio, not from lack of owning other stocks, but just the rapid rate of its growth (401k is separate and properly allocated).
Investment-wise it may be prudent to sell some the reallocate, but psychologically I don’t know if I can bring myself to sell something I made a good decision on that has turned out successfully.
Very interested in the board’s thoughts.
12
Posted on 8/3/25 at 9:43 pm to LP2OP
I evaluate my index funds on a quarterly basis. If they’ve over-performed over the quarter some get sold. If they’ve under-performed more gets bought. Of course this assumes that you have a basis for expected quarterly growth. You can apply the same to individual stocks, I suppose. Look up Value Cost Averaging.
Posted on 8/3/25 at 10:02 pm to LP2OP
There are two schools of thought. First, hold them forever as long as their numbers hold up. Or sell when they pull back and buy back when the lull is over - as long as their numbers are holding up. PLTR is an excellent example of this. Go look at the chart from Feb-Apr. The question is do you pay close enough attention to sidestep the breakdowns without getting out of the stock for good?
I try to avoid over 20% but I count my 401k.
I try to avoid over 20% but I count my 401k.
Posted on 8/3/25 at 10:03 pm to RoyalWe
Crap, good point. Rebalancing...
Posted on 8/3/25 at 10:13 pm to RoyalWe
So you like a method based on performance, allocation, and other metrics without the emotional or other attachment side? I can see how this would make a very disciplined portfolio.
Posted on 8/3/25 at 10:22 pm to UpstairsComputer
I pay relatively good attention to what’s going on in my portfolio, other stocks, and the market in general. But I don’t know if I’m confident enough in what I read and learn to make the getting in and getting out decisions timely and properly. Maybe I’m not as much of a “trader” as I am a “buy and hold” guy.
For PLTR, even with the very large pullback in the first half of the year, since that previous peak in Feb., it’s still up another 25% in less than 6 months. So is trying to time something like that worth making a mistake and selling improperly?
For PLTR, even with the very large pullback in the first half of the year, since that previous peak in Feb., it’s still up another 25% in less than 6 months. So is trying to time something like that worth making a mistake and selling improperly?
Posted on 8/3/25 at 11:00 pm to LP2OP
I feel like I often sell too early. I recently dumped all my $HOOD at $90 and sold some $NVDA at $158 because I felt like I had too much unrealized gains sitting on the table.
Lots of times I sell something that really ran up and I wait for a pullback that never comes around.
Lots of times I sell something that really ran up and I wait for a pullback that never comes around.
Posted on 8/4/25 at 12:38 am to LP2OP
No one’s gone broke taking a profit
Posted on 8/4/25 at 6:08 am to LP2OP
Until I find something better to put them in or need the money
Posted on 8/4/25 at 6:56 am to LP2OP
quote:
My specific example is PLTR. I got in decently early (should have accumulated and held from the very beginning, but that’s a different story) and am almost up 600%.
The other day, I was looking at PLTR and realized that I bought about 20 shares around $23 in 2022. I sold around $25 later in the year.
The stock is $157 today. The remind me of the high school sweetheart I let go because I wanted to party instead of settle down. Bad move, Dave.
This post was edited on 8/4/25 at 6:58 am
Posted on 8/4/25 at 7:01 am to LP2OP
Conviction, with a target market cap in mind. Revise up or down as needed.
It takes some studying to do it right.
It takes some studying to do it right.
Posted on 8/4/25 at 7:53 am to LP2OP
quote:My approach is systemic and mathematical. It's a disciplined approach that takes the emotions out of the decisions. That doesn't mean you're not having emotions -- it means those emotions aren't making decisions. This approach has made me a lot of money.
So you like a method based on performance, allocation, and other metrics without the emotional or other attachment side? I can see how this would make a very disciplined portfolio.
The latest example was at the end of March after Trump's Liberation Day drop. The math said to buy a lot, so I did. At the end of the following quarter, the math said to sell a lot, so I did. As I mentioned before, I was able to pay cash for two new cars and pay private school tuition just based on that trade.
Many people don't have adequate risk tolerance to do what I do. They "pay" because their emotions won't allow them to stay the course -- or they do, but they're an emotional wreck during big swings. I've learned to be very philosophic about it.
The reason I can stay the course is because I believe that the stock market will go up over the long haul, but it will "breathe" up and down on its way. I also keep enough funds aside to weather a very long downturned market.
Posted on 8/4/25 at 8:10 am to LP2OP
Dollar cost average, cut profits to rebalance, use profits to increase DCA rate. Rinse and repeat.
Posted on 8/4/25 at 9:03 am to LP2OP
In the case of NVO for me … too long.
Posted on 8/4/25 at 9:40 am to LP2OP
That is a very good question and something that I have struggled with for years. As valuation reached what I believed to be unsustainable I harvested my gains. There is very little downside in taking a profit. I did OK.
Recognizing that I lacked hard evidence to support most of those valuations I began to buy on the dips and locking up the profit as the market recovers.
I do not claim to be a "market-timer" but it has worked quite well for me because I believe in the US economy. Certainly my strategy is not for everyone.
Recognizing that I lacked hard evidence to support most of those valuations I began to buy on the dips and locking up the profit as the market recovers.
I do not claim to be a "market-timer" but it has worked quite well for me because I believe in the US economy. Certainly my strategy is not for everyone.
Posted on 8/4/25 at 10:56 am to RoyalWe
Gotcha, so if you have a stock or index fund that has outperformed for a quarter, and by all research looks to continue its outperformance into your next time block, you’ll still reinvest less or sell and reallocate to another asset?
Posted on 8/4/25 at 11:01 am to CharleyLake
Do you end up beating yourself up if you sell something that continues to run after you’ve sold it? Or after the sale and you’re happy with your trade, is it “out of sight out of mind” and it doesn’t bother you to look up in a couple of months/years and see it’s far above the price when you owned it?
Posted on 8/4/25 at 11:02 am to bayoubengals88
quote:In other words, would you buy more or even start a position at that level? This is the ultimate question.
Conviction, with a target market cap in mind. Revise up or down as needed.
It takes some studying to do it right.
Posted on 8/4/25 at 11:15 am to LP2OP
quote:I reallocate between a stock ETF and a total bond market fund. I do not spend any time researching during the quarter because I'm in index funds. I have a growth expectation given the fund's historical growth. I don't care what is happening in the world (war, tariffs, pandemic), I expect a fixed growth percentage between quarters. I predominantly use a leveraged fund (TQQQ) and a bond fund (BND) to do this. My CAGR over the last 8 years is over 35% for that particular fund.
Gotcha, so if you have a stock or index fund that has outperformed for a quarter, and by all research looks to continue its outperformance into your next time block, you’ll still reinvest less or sell and reallocate to another asset?
This method is not for everyone. If you can't stomach losing a third of your money in a single day, then you should pass on TQQQ. However, you can choose unleveraged and less volatile funds (but also with a lower growth expectation).
Posted on 8/4/25 at 11:26 am to LP2OP
If you didn't hold a single share of the equity, would you buy it today at today's price?
If yes, hold. If no, sell.
If yes, hold. If no, sell.
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