I would give my idea of selling a position, which according to me is based on the timeframe for the investment.
- Long term Investment(More than 3 yrs): Only when you need the money- This is the investment type that is to bought and kept for as long as possible, only liquidating it when in dire need of money. By keeping your portfolio intact, you are increasing the possibility of having one stock that gives you 30% CAGR for 20 years period.
- Medium term investment (0-3 yrs): Profit booking on reaching a set target- For medium term the approach should to have some set targets (e.g. 3x times change in index during the same period) to initiate the profit booking. If using index returns to set the profit targets, use appropriate sectoral indices or indices based on market cap of the share.
- Intraday trading: Maximise the hold time- Initiate the trade as soon as possible and square off as late as possible.
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