2G·

Hedging of well-performing securities

Since my $SAP (-0,88%) - Distaster, I have always been concerned with the question of how to deal with solid shares that have done well and how to secure profits if you actually believe in the company and therefore do not sell and pursue a buy and hold strategy.

I was at +120% with SAP and then didn't sell at 280 because it was doing so well. After the setback to €240, I thought, I won't sell now either, it will go up again. And now we are at 140 euros :-(

What do you do with stocks that have done well and that you actually believe in and want to keep? For example, I have $ALV (+0,03%) + 90% and I don't want to sell it because it's a solid share. But who knows, maybe something unforeseen will happen and then the profit will be gone. For example $NOVO B (+0,43%) many people probably missed the exit and are now at 25% of the peak price.

Do you have any ideas? I don't have the time to check and evaluate every report on every share every day, or I would certainly make the wrong decision. Simply selling via S/L can of course also mean selling in the event of a short-term fall, which may even be made up for intraday. And of course the question of where to set the S/L?

Thank you very much for your help!

26 Commenti

JP512@JP512

That's exactly why I only invest in ETFs because you either get out too early or too late...

•

BeachPlease@BeachPlease

@JP512 That's nice for you, but it misses the point 😋

••

Pascal@Pacco93

@BeachPlease Please learn to read and understand. Since he has no solution for this, he has decided to save in ETFs

••

BeachPlease@BeachPlease

@Pacco93 Learn to read...pff 🤣
Just doesn't help the OP who wants to know how to hedge a position he wants to hold because he is convinced of the company. Simply leaving it and saving in ETFs is not really a proposed solution, but a completely different strategy.
That really shouldn't be that difficult to understand, should it?

•

JP512@JP512

@BeachPlease everyone can do as they like, but it's definitely more relaxed and according to the statistics, most underperform the market precisely because of this👍

•

BeachPlease@BeachPlease

@JP512 Ok, maybe an analogy: OP wants to work full-time and wonders how he can reconcile this with the household and children. You suggest that he should just work part-time, which would definitely be more relaxed. Huh? 🤣

•

Pascal@Pacco93

@BeachPlease Maybe he wanted to make the person think so that they have different perspectives on the situation? Just because you're narrow-minded doesn't mean others have to be too 😕

•

Pascal@Pacco93

@BeachPlease and with this apples and oranges comparison you can directly recognize people who cannot accept a second opinion

••

Pascal@Pacco93

@JP512 don't bother, some people don't understand that, they are so dissatisfied with their lives that they can't look beyond their small plate 😂

••

BeachPlease@BeachPlease

@Pacco93 🤪😘😂

••

JP512@JP512

@Pacco93 oh, all good. But I think that's exactly why very few people write anything under the posts... It often ends in a discussion😅

•

Tom@tom_finance

Trailing stop losses that automatically move x% below the highest price are common practice.

Otherwise you can hardly protect yourself from short-term news-driven crashes.

You would determine what a stop is before buying. Otherwise, always re-evaluate the investment case for the quarterly lines. Position sizing is also already a protection so that the effect of individual stocks is not so great.

Otherwise, just as you set yourself a stop%, also determine at which overvaluation you want to make partial sales and in what amount

In general, emotions are the main issue in my opinion. Rules must be set BEFORE the investment, not in the middle of it. If you see 120%, as with your SAP, this releases greed. If you then fall to 240, loss aversion sets in. Both make the decision worse. If you don't have any predefined rules, you make decisions emotionally - always.

If you are feeling this psychological pressure with ALV right now, just sell a part ;-)

•

Chris@IronEagle

@tom_finance How much would you set the trailing S/L below the current price if, for example, it is currently ATH? Always 10% or individually?

•

Chris@Multibagger

@IronEagle I always set them individually, depending on the volatility of the share.

•

Kai@Dividenden-Sammler

With a buy and hold strategy, the price should be of secondary importance as you want to hold the shares for the long term/permanently anyway. In the event of a setback, a subsequent purchase is more likely as long as you are still convinced of the buy and hold position. If you are looking to maximize profits from the outset, I would say that the classic buy and hold strategy does not suit you.
If you already set an exit price with the purchase (as @tom_finance said) you will certainly agree with me that buy and hold is not right.
Ask yourself whether you are really pursuing b&h or rather bh&c (buy, hold and check). I would advise you to set a target date for when you want to get out and then check at certain intervals whether this is the case. Stop prices could be a way of doing this. It may have the problem that the sale triggers and then the price rises again and you enter again more expensively with less capital because additional taxes have been incurred.

•

Tom@tom_finance

@Dividenden-Sammler Valid addition - just so there is no confusion I don't do any of this, neither trailing stop nor exit prices :D Just listed what is theoretically done.

But I also think that as a buy & hold investor (a matter of definition) you shouldn't hold on to companies indefinitely. The check part is essential - an investment case should also exist^^

••

BeachPlease@BeachPlease

Your watchlist is probably too small :) I have about 300 assets generally under observation and currently about 40 entry scenarios, whereby the effort is limited to about half an hour a day.
In my view, the key is to plan the exit BEFORE entering, i.e. to set a specific take profit, e.g. using Fibonacci extensions or mid-price targets. And then just let it run, no more fiddling around.
And another thing: It's always about probabilities and taking profits is never wrong if you see alternatives. Could there have been more return? Screw that... - Your cash is already in an asset whose uptrend is more likely.
If you want to hodl, I would short the asset in case of doubt in order to stabilize the position.

•

emppsb@emppsb

@BeachPlease you helped me a ton with my asml position couple months ago, same advice. thanks mate

•

BeachPlease@BeachPlease

@emppsb I don't remember, but you're welcome buddy 😄

•

emppsb@emppsb

Don’t be afraid to take profits. I was in the same situation with $ASML I sold half of my position and let the other half run. Taking profits is always a good decision in my opinion, even when there’s a chance of further upside. At the end of the day, you need to feel comfortable with your position.

•

Dividendenopi👴@Dividendenopi

If you have positions that have performed very well and you are thinking about exiting, sell part of them and remove the stake, including taxes. You simply let the remaining profits run. They may be reduced if the share price falls significantly, but would only be gone if the company goes bust. This would be an option with Allianz. If you have a good alternative or addition, then you can invest the free capital there. But don't be annoyed afterwards if Allianz goes through the roof. That's almost as bad as SAP

•

imarkation@imarkation

I now see $SAP and $NOVO B as two different concepts:

$SAP as an established company is also viewed positively in the long term due to its widespread use in the economy, even if the sale of software relating to AI is currently having a negative impact. After my
bought again at 140 after my entry at 170 euros. I would not recommend a stoploss here.

$NOVO B I don't have a stoploss myself, my example would be $IRE. I was up 80% here in October and am now up 20% again.
Subsequently, I would have set a dynamic stoploss here due to the volatility so that I would have sold automatically after a 10% loss, for example.

In other words, there is no universal recipe here and I have also questioned the rule of limiting losses/letting profits run. If you believe in the company in the long term and it is already established, it makes sense to let it run.
In the case of hype stocks with high volatility, however, you should be aware that things can also turn very negative once the hype is over.

You can set a stoploss with your broker either directly when you buy, like a limit order or market. Or with Saxo I can edit the
I am currently doing this with my limit order for silver, which I have now set at 50 sFr.

So much for my opinion, best wishes and continued success!

•

Susanne@Isus01

I use the position size in the portfolio as a guide. If a price has risen sharply and exceeds a certain size, I reduce the position. There was once a nice article by @Liebesspieler on the subject of position sizes and also one on profit-taking

•

Smudo@Smudeo

Small 1:1 of the speculative investment:
Let profits run. Raise a 10% stop every year.
Limit losses to -30%
No emotional thoughts.
It's your money - others want it too.
But I can comfort you - it happens to everyone, more often at first and less often later.

•

Chris@IronEagle

Many thanks for your assessments! It's always difficult to say over the years when you want/should get out. In the case of Bayer, for example, I no longer saw any chance and exited at 24 euros with heavy losses - we are now at 40 euros. The question is always how long you should be patient. But I will work a little with partial sales or trailing S/L. Of course, you never know whether you will invest the proceeds of a partial sale in a worse share. I'll be buying fewer shares anyway and more ETFs, where I shouldn't have the problem (except for themed ETFs, as we saw with gold mining ETFs after the start of the war. It would not have been a bad idea to sell them and then buy more cheaply.

••

fund_navigator_elshq@fund_navigator_elshq

Let profits run. Or go directly to $IWDA and forget about the stock market.

••