An investor should ask this question before making any purchases since it helps them determine their risk tolerance and time horizons for investments. However, you’re in a better position to answer this question if you’ve made substantial wins rather than substantial losses thus far in your trading career.
Some investors insist on making a purchase and holding it for the long term, no matter what. However, other investors like to be more strategic when it comes to collecting gains or selling their losses.
Many cryptocurrency supporters have opted to purchase and keep for the long haul. Tesla also has a large number of loyal shareholders. As long as you’re ready to put up with occasional bone-crushing volatility, this method is just fine.
Others lack the stamina to persevere through eternity. If that’s the case, you’ll need some form of exit plan or, at the very least, some rules of thumb to guide your actions and assist you in realising when to sell all or a portion of your holdings.
Do you have another use for the money?
With Bitcoin revenues, several individuals say they were able to pay off their mortgages. What if they lose out on even more cryptocurrency earnings in the future? That is entirely conceivable.
The opportunity cost of paying off a mortgage has never been a factor in anyone’s decision to do so, though. When it comes to taking on debt, some people’s risk thresholds are greater than others. It’s hard for some people to deal with the idea of owing money to someone else and paying interest on that debt.
There’s nothing wrong with selling your victories to alleviate financial strain in another area of your life if the earnings can help you achieve that aim. Or if you think you can put it somewhere else for new investment, that also works too, but you need to plan ahead.
Can you invest elsewhere?
You were keeping yourself honest as an investor may be as easy as considering how you would invest your wealth if you had to start over with nothing but today’s cash.
Does your current investment strategy still make sense for your long-term goals? Do you have any ideas for improvement? Exactly what would be the same?
For tax reasons, you can’t do this every day in a cost-effective way, but the objective here is to test your own investment views so that you can see your portfolio through a new set of lenses. Publications like BitiQ’s in-depth research, could ease your choice while trying to find your ideal trading platform.
What do you think of your investment plan?
A portfolio and a strategy are two very different things. Simply put, an investment portfolio is a collection of stocks, mutual funds, ETFs, and other types of securities that you have purchased. When it comes to managing your portfolio, you need an investment strategy to guide your activities.
No matter which direction the markets move, portfolio management requires self-control and the ability to think ahead. You’ll be left holding the bag if you keep purchasing things in the hopes that their value will rise without following any guidelines for selling or rebalancing your portfolio.
Only a select few people are capable of making wise financial decisions that only result in steady gains over time.
Position size is a personal decision; however, this is a method for methodically buying and selling at reduced prices over time. You’ll have more opportunities to purchase at a lower price with more volatile assets.
Is there anything to regret?
When you invest, you’re minimising the amount of regret you will feel. You’re saving money now so that you may spend it on something else in the future when you have more money.
Crash survival isn’t an equal opportunity for all investors. Risk management strategies that minimise volatility, even if that reduction in risk comes at the cost of lower long-term predicted returns, are more suited for certain investors than others.
For investors, it is important to consider what they would regret more if they were to miss out on future gains in their portfolios: (1) selling too early and losing out on further profits, or (2) holding on to their gains for too long and seeing them go.
The key to minimising regret is to know yourself as an investor and which emotions will be the most difficult for you to overcome.
