Selling your stocks is the most important thing in investing.
Knowing when to sell your stocks is probably more important than buying, but very few people ever talk about it.
There is a lot of really bad advice out there about when you should sell your stock.
Some people say you should hold onto your stocks no matter what.
Others say you should sell when you get a specific percentage return or when some trading pattern occurs.
The truth is both much simpler and harder at the same time.
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Knowing when to sell your stocks is probably more important than buying, but very few people ever talk about it.
There is a lot of really bad advice out there about when you should sell your stock.
Some people say you should hold onto your stocks no matter what.
Others say you should sell when you get a specific percentage return or when some trading pattern occurs.
The truth is both much simpler and harder at the same time.
💵 GREAT INVESTING APPS I USE
GET A FREE SHARE WORTH UP TO $150 WITH STAKE (UK, Australia, NZ)
https://hellostake.pxf.io/qnA3xq
You will get a free share if you sign up using this link and deposit a minimum of £50.
GET A FREE SHARE WORTH UP TO £200 WITH FREETRADE (UK ONLY)
https://magic.freetrade.io/join/sasha-yanshin
You need to sign up and make any deposit to get the free share.
SIGN UP FOR ETORO (Global)
https://med.etoro.com/B15358_A95689_TClick_SSasha.aspx
67% of retail investor accounts lose money when trading CFDs with this provider. Your capital is at risk. Other fees may apply.
👍 SUBSCRIBE TO MY CHANNEL
https://www.youtube.com/c/SashaYanshin?sub_confirmation=1
DISCLAIMER: Some of these links may be affiliate links. If you purchase a product or service using one of these links, I will receive a small commission from the seller. There will be no additional charge for you.
DISCLAIMER: I am not a financial advisor and this is not a financial advice channel. All information is provided strictly for educational purposes. It does not take into account anybody's specific circumstances or situation. If you are making investment or other financial management decisions and require advice, please consult a suitably qualified licensed professional.
Hey guys, it's sasha, we all know the most important things when it comes to investing having a solid strategy. Picking your stocks doing due diligence and company valuations, doing qualitative analysis and buying the right stocks at the right time. We've got all of that covered right. Well, there's one really important thing that people tend to not pay any attention to in the realm of investing, and this might be the most important bit more important than all of those other things i just mentioned, and the secrets to making money investing is knowing when To sell so that's exactly what i'm going to talk about in this video knowing when you should sell your stocks because, let's face it, it's not just the most important skill.
It is also probably the most difficult because when it might be time to sell psychologically, a lot of people just won't pull the trigger. Here are some common scenarios. First, the good scenario you go and buy a stock and the price goes up by 60. You are sitting on a massive winner with huge green numbers in your investing portfolio.
Should you sell well i'll explain when you should sell a little later on in this scenario, but even if you do know that you should, it is really hard to get rid of your big winner. What if it keeps going up? You love the stock. You love the company, it has earned you so much money already and you almost feel guilty for selling it. The next scenario is the opposite: you bought a stock and things have changed since you bought it.
The economy went bad. The company changed course updated information made. You change your mind, things slowed down and the stock price is now down. 10.
If you sell now, you are pocketing a loss and the old saying goes that you only lose money investing when you sell. Why not keep hold of the stock, hoping for some kind of bounce back, maybe just keep in staying invested for a little longer and then there's everything in between the stock has been trading sideways and it's been a year. If you sell now, the next year might be the big breakout year right, you'll sell for nothing yourself and no gain and then it'll go 80 as soon as you get out, so you can see how selling becomes much more difficult when you are in the moment When it's just you and your investing app and you're sitting there looking at it, you have to make that decision and it feels very different to when just talking about a hypothetical scenario, all right. So let's talk about when you should sell a stock and for me there are just three main cases.
I have a bonus one at the end, but let's talk about the three main ones, because they are actually pretty straightforward. The first case is when you have capitalized on your potential upside. The second case is when you have adjusted the evaluation and the third one is when you have adjusted your time horizon. Let me explain each of these in turn, so the first case is the good kind of selling you have invested in a stock and has grown by let's say: 48. You sell and you bank, that 48 you just made some money. But how do you know when to pull the trigger? Should you have sold when it was up at 40 percent, or could you have waited until it was at 50 percent and made even more money then well? The answer for me here is actually very simple. I make my decisions to sell in exactly the same way as i make my decisions to buy a stock. So as time passes, i will simply update my valuation model and my target price.
I will use newer, better data and i will reassess the company from a quantitative and a qualitative perspective. So let's say i invest in a company where i think there is a 60 upside on the share price. Now, if that share price then goes on and climbs by 50 percent, i may go and review my valuation and see if there's any material reason to update my target price. So let's say my target price stays at the same level, because nothing much has changed.
I then only have another 10 percent left in the upside, because i've already collected 50 percent and because the stock has already gone up by 50 percent that themselves only actually seven percent of the current value of that stock. At that point, would i invest my money in a stock if i only saw a seven percent upside in valuation? No, i would not. So in that scenario the decision is pretty much made for me. I do not continue seeing an upside in my evaluation, so i am out.
Does that mean the stock won't continue going up? No, if there is momentum, the stock may well continue going up and go past. My target share price, but on balance i want my money sitting in investments that have a large potential upside based on data based on numbers, rather than trading momentum, or some kind of gut feel. The objective of your investing portfolio is not to catch every single peak right at the top. The objective is to make robust and consistent average returns, and so i actually don't really care if the stock continues going up after i sell out very often it does.
I've recently sold out of adobe nvidia positions that i held, and they are both about eight to nine percent up, since when i sold my positions, that will happen a lot when you sell that will happen, probably half the time and some investors will get frustrated or Think they've made the wrong choice, but that's just a weird manifestation of a sort of fomo type effect. I base my decisions on numbers and when the numbers say that there isn't a mathematical upside for me, i sell every time. The second scenario is the case. When you have to adjust your valuation, this one can actually work both ways.
Let's say you had that 60 upside in your stock and the share price is gon na buy 30. Since when you bought it, you then go and reevaluate that stock and for whatever reason you now think that there is only another 10 upside remaining. So instead of that 60 versus when you bought, you know, i think there was only a 40 actual upside there. So your valuation has effectively reduced and just like with the first example, this is a trigger to sell for me because there is not enough upside, but here's the really important bit that trigger also applies equally to a loss making position. Let's say you have an investment that is 20 down from when you bought it, but some important data comes along or something else happens which makes you reassess your valuation. And now your target price is only 85 of what the original share price was, or maybe it is even a lower than the share price is right. Now the outcome in both cases is the same. If there is no upside or the upside is too low or if my model says the stock is currently overvalued, i will sell the position immediately, regardless of whether i am up or down on that share price.
Overall, it makes no difference to me, and the third scenario is when your timeline has shifted now this one doesn't happen as often and usually when the time frame for your investment changes. So will your valuation, but sometimes you roughly, have the same outlook on the company's perspectives. You just think it might take a little bit longer to get there, but there may be a big economic downturn that disproportionately affects that particular industry or the company may be suffering a setback which you think may delay their schedule by two years, for example, and suddenly That 40 upside, that you were maybe expecting to come somewhat soon, is not as exciting, because you now think it's gon na take you too long to see that upside materialize, and that is a less scientific reason to sell, because it is pretty much impossible to really Gauge when the share price will actually move relative to company performance, because the markets do weird and wonderful things, but it really is an important factor to consider, and there is one more reason why you might sell a stock. This one is the bonus reason.
The interesting thing is that this one actually has nothing to do with the stock itself. Sometimes an opportunity comes along when a particular company's share price drops sharply because of something that is not material or doesn't affect your long-term view on that company or you suddenly come across a really strong, really good investment opportunity or something else like that, and you don't Have the cash to put into that new investment? You just don't have the money sitting around. You know it's already all invested in those cases. I will go and assess the rest of my holdings and i'll pull out some of the value out of those investments with lower upsides, to shift that money across to this new stock.
So you might sell shares in a company, even though there is absolutely nothing wrong with it and that's okay, you have to continuously optimize the return on your investment. You are putting your money to work and you want to get the best return on that work. If you think there is a better place for your money to sit, it can be a smart decision to switch, even if there is nothing wrong with where the money is currently set. People can be very reluctant to do this, but these types of calls can really help sustain growth in your portfolio over time, as you continue to find better opportunities and gradually pull money out of less lucrative stocks and into higher prospect investments. Now i hope you guys found this useful if you have please go and smash that like button for the youtube algorithm. Thank you so much for watching. I really really appreciate it and, as always i'll see you guys later, you.
As of now i am trying virtual amounts, I bought crypto currency when its value was increasing, but it shows loss in portfolio, right away after i buy it,what does it mean .
Hi Sasha, I’m fairly new to investment world. I listened to your videos for a while now and invested in LCID stock. It is now up by 50%, would you sell that and then repurchase at a later stage? I’m long term investor in this company
Hi Sasha, I liked your videos and sorry if I missed it, but have you covered spread betting. You mentioned that one of the reasons to sell would be to re-invest in something else. If you use spread betting, and only investing 1/4 of the total cash, would you not be making good use of leverage while de-risking the market movement and maximising return. It would be great if you could upload some videos regarding spread betting beyond the videos explaining the risk of leverage and best platforms to use if we decide to go down this route. Thanks a lot
Hi Sasha
What do you think of Sofi at the moment ?
Would love to hear your thoughts
Kindest
Evan
I'm currently looking at a £120 return after investing £1300. I've never seen such a high return before and im really tempted to sell, this video has come at the perfect time
Up 12 % on FVRR thanks to Sasha- planning to hold until next earnings but I wonder if I should at least lock on to profits of 1/2 of my shares before earnings or not. Wondering if the fellow viewers has thoughts on this?
Maybe you can make a video explaining how you work out the upside of a stock? I'd argue that many of us buy a stock when it drops, just hoping for the best.
I start trading first time in October last year with almost zero knowledge but thanks to people like you on you tube and other social media platforms I learnt quite a bit. Now I feel more confident to buy and sell. Thanks for sharing your knowledge and experiences.
Love the clarity of your videos Sasha. Quick question: Is it OK to sell the profit of a stock, reinvest that profit elsewhere and still hold your original stock value to grow again? Cheers buddy 😉
This is why I hold many of the stocks you do Sasha. Because hopefully you will let us know when you sell so I can do the same. Seriously I need to learn how to exit stocks myself, in my mind they will just keep moving up endlessly but its not the case often times =)
i rather keep my stock and wait for Dividend. This sell and buy is too stressful lol i just want to know which stock gives divident
A great video and for every 1M videos on when to buy or what to buy there is one or two on when to sell. Personally, I like investing with a Warren Buffett approach that is to say I buy and HOLD.. with a never sell attitude because as an investor I really just became apart of the board.. However, when it is time to sell, I first decipher if I am selling because there is a far better opportunity or if I am panicking based on the market noise.. If I truly do need to sell.. it is only after a year to ensure I don't get hit with short term capital gains tax. Unless the biz is really tanking financially, I again do not like to sell..
Great video once again! I'm in this situation right now and could do with a bit of advice…
I'm currently 220% up on a stock that I planned on selling when it was up 100%. But with the worry of me missing out on more growth, I didn't sell (thankfully its working out). But now I have no idea what to do with the stock. I am very confident in the future of this company, but I didn't expect this level of return this quick. Any advice would be really appreciated!
For me, that just doesn't make sense as a strategy. Ok, sold your stocks and have money in your pocket. Now what? Will you start spending that money without making it work for you again?
If you buy a share of a company is because you either 1) believe it's a solid company that will pay you dividends and/or 2) you believe that it has the potential for growth in the long term. Having a portfolio with 50% of each type of company is the best strategy. You will see your money grow and will also receive dividends. You just need to establish how much % of risk you want from a company on your portfolio.
"Oh, but the majority of people don't have enough money to receive significant dividends" – Yes! That is true, but investments are a seed that you plant today and will see the results in the future. Think of a person who sold their stocks from Google in 2017 because this person thinks it's the "target price".
All companies one day will become dividend companies. The best strategy is to find the best companies, buy stocks every month and hold until all your portfolio pays you dividends.
I agree with all of this. It is what i consider my plan to be. But i enjoyed the video.
The reason i keep coming back to this channel is to reinforce good investing behaviour rather than listen to day traders and buying the dip because of fomo.
I find it really interesting and surprising that you sell when there is not enough upside. It makes sense now you explained it but my assumption was the goal is to squeeze every last drop.
My fiver shares are doing pretty well, I Invested after watching your video. Just wondering if you think they might have a huge sell off soon or if it's worth leaving it longer?
Great video…. I have watched your other videos on valuation of stocks like TSLA, AMD, NVDA and FVRR …. Great learning for me 🙌🏼
Im purely a dividend investor so my rules are a bit different compared with a more typical growth stock.
Essentially if you regularly review your dividend yield, whatever this % is you multiply by 3, giving you are best guess return for approximately the next 3 years. If the share has grown this much or more then i will exit. For me a 3 year window for the stock to drop back to a price i would wish to re-enter at is good enough.
example
Avg share price = £1.50
Dividend yield = 5% (multiplied by number of years for re-entry for me this is 3 gives 1.15 or 15%)
so, 1.50 x 1.15 = 1.725
£1.725 is my exit point.
* Disclaimer – lots of DD required for this to work consistently (more than 50%)
Also sometimes common sense must prevail i.e TSCO buy at 227 should have been sold a few weeks or so ago but sometimes the greed monster can get the better of us all.
Valuable video Sasha, thank you!
Question:
Do you have a video or plans for one on how to valuate the potential upside of an investment? If not a video, comment
New to this and have mostly used your videos to learn
I never sell when i make a loss. I double down even harder. If you buy a good company you don't need to sell it when you make a loss. My problem is selling it too early. Selling it when it goes up 30% when I could have sold it at 100%+.
This is what I love about index investing. All you do is buy. The only reason to sell is in retirement when you stop earning and need money. Nevertheless, I enjoy this channel for educational purposes and even track the picks that are shared
Again Sasha, Great video. The very last point was an important one: Can you make more $ by selling one stock for a better investment elsewhere. Quick question for a "lazy investor:" Where would suggest one look when needing a target price, without going through the whole DCF process?
Your last point about pulling investments from less profitable stocks was comforting. I withdrew a chunk of my S+P500 holdings and chucked it into Fiverr when it was on the dip and you were highlighting them. Paid off.
Question for you: I have a small holding (£500) in Micron technology but it's really lagging right now and my evaluation of the stock means it wont reach much higher in the future. Do you think it's wise to take the hit on this and optimise my money in more profitable ventures? I'm happy to sit on it to wait and see but i've been doing that for months.
Ive been investing since January and I have never sold anything.. yet haha. Informative video, GME to the moon!!
Whether you’re up or down, you need to ask one question: is this investment still the best place for my money right now?
Done pretty much all of the above. Half the times I regret selling… probably more than I regret holding.
Good video 👍
You mention consistently re-evaluating your stocks and target prices. I think this is why people don't sell or mess with their holdings, as the time investment to research is large if they have a 9 to 5 and family etc.
So a lot of people will just hold or set it and forget it if they feel the company is safe for long term investment.
Maybe this could be a future video, time management of research or how to research price targets and holding in less steps or less time invested.