One of the reasons I don’t have a financial Advisor is because I could not find one that would address the question of when we would get out of a non-performing investment.
There were all sorts of criteria given as to when we should buy an investment but none for when to sell. When asked how to manage risk the usual answer was diversification.
Most have some criteria for buying an investment. Very few have any criteria for selling either on the upside or the downside.
Here are the reasons for not selling.
Don't panic.
Market timing doesn’t work.
you might be sorry you sold if you miss those few important whopper days in the market that make up the lions share of a recovery.
And then if the markets recovered at that point, I would have looked awful dumb.
If you are getting out now because things are bad, the only way you can get back in, at lower prices, is if you are willing to buy back when things are a lot worse. Why else would prices be lower than they are today, if things were not worse.(Snip). Therefore, they are destined to buy back at higher prices. Plain and simple. I would suspect that you have lost too much money already, to lose more in this way, but that is entirely up to you.
but if you have greater than 10 years to think about it then it is not a pressing concern.
A buy and holder who has a low cost base doesn't want to take the massive tax hit,
I'm not ever going to pay taxes on it. It's a hold forever while I spend the dividend.
I am too far into the decline to even consider crystallizing equity losses. I am of the opinion the odds of gains (a recovery) going forward are far greater than the odds of more losses. I will simply tap into the FI component of my withdrawal needs until an equity recovery takes place.
Now the way I understand it a Buy and Hold investor might sell at a loss to harvest a tax loss.The problem I have is I really like my stocks
I constantly have to remind myself of the value I believe is in my stock holdings
Warren Buffet holds forever.
the world economy will come back eventually and stocks will rise again
Equities only represents a portion of my portfolio. That's why I diversify.
Are there any other reasons why else one might sell?